SC Supreme Court Upholds City of Myrtle Beach Zoning Overlay District

This post was authored by Maria Lambros, Jacob D. Fuchsberg Touro Law Center

The City of Myrtle Beach’s (“the City”) heavily relies on tourism for its economic support and funding. In 2011, the City adopted a comprehensive plan, with the objection of increasing tourism and city revenue. In order to obtain this goal, the City determined it was necessary to encourage a “family beach image” within the City to further advance tourism. Based on feedback by tourists and residents over various concerns, the city council of Myrtle Beach adopted Ordinance 1807 (“the ordinance”).

The ordinance created a zoning overlay district, the Ocean Boulevard Entertainment Overlay Distrct (OBEOD), which encompassed the historic downtown city area of Myrtle Beach; its intent was to encourage family tourism and discourage things that ‘repulse[ed]” families. The ordinance prohibited four types of retail businesses from operating within the OBEOD, including (1) smoke shops and tobacco shops; (2) the sale of tobacco paraphernalia and CBD products; (3) excessive sale of tobacco products (10% of more of a stores inventory); and (4) and sale of sexually explicit materials. On August 14, 2018, upon the passage of the ordinance, retail businesses that were prohibited under the ordinance were declared to be nonconforming. However, an amortization period of December 31, 2018 was provided for any affected businesses.

Appellants are nine out of 25 stores effected by the ordinance. They brought their suit in federal court on December 19, 2018, seeking inductive relief, damages, and a declaration that the ordinance is unconstitutional. They raise 5 issues:

First, Appellants argue the ordinance is defective as a matter of law because the first and second reading of the ordinance that were introduced were very different than one another, and therefore a third reading was required under S.C. Code Ann. § 5-7-270 (2004). The court held that appellants are statutorily barred from raising this issue because they did not raise it within 60 days of the ordinance’s adoption. The court noted, that should they overlook the timeliness of the challenge, appellants’ argument still fails because the final version only helped better define the terms in the original version, and the prohibited uses listed in both were identical.

Second, Appellants argue the ordinance violates the Equal Protection Clause of the Fourteenth Amendment by treating them differently from similarly situated stores that continue selling similar merchandise in other areas within the City. They claim that this differentiation is arbitrary and capricious, and evidenced by three specific concerns:

(1) The OBEOD was reverse spot zoned; The court explained that spot zoning can occur in two ways: traditional spot zoning, where a small parcel is zoned differently from its surroundings for private gain, and reverse spot zoning, where a property is restricted while its neighbors are not. In this case, the creation of the OBEOD was not reverse spot zoning because it resulted from an affirmative legislative act and didn’t form an isolated zoning “island.” Further, the court determined that even if it were spot zoning, it is legally permissible because it aligns with the city’s comprehensive plan, promotes public welfare, and doesn’t cause clear injustice to the Appellants. Therefore, the court rejected this equal protection challenge based on impermissible spot zoning.

(2) The irregular boundaries of the OBEOD; The court applied rational basis review and ruled that the OBEOD boundaries were rational and constitutional, and that appellants failed to demonstrate that the boundaries were arbitrary or capricious. The court found that the city council’s decision to create the boundaries was based on plausible considerations, such as pedestrian traffic patterns, family friendly attractions, and historical uses in the area.

(3) The lack of evidence that the prohibited retail uses pose a threat to public safety. The court dismissed this argument, stating that the city was not obligated to prove the accuracy of its policy decision, and that appellants had the burden of proof, of which they failed to provide evidence showing that the city’s decision was based on incorrect information relating to public safety.

Third, Appellants raise two due process arguments. First, that the ordinance does not provide a hearing process for vendors to challenge the zoning administrator’s determination regarding merchandise fitting the definition of sexually oriented merchandise. The court rejected this argument, pointing out that the South Carolina Code explicitly allows for appeals to the Board of Zoning Appeals (BZA) in such cases. In addition, appeals to a BZA determination can be brought to the circuit court or this state supreme court. Second, appellants argued that the ordinance imposed an arbitrary and unreasonable amortization period. The court found this argument moot because enforcement of the ordinance was delayed due to the appeal process, giving appellants almost five years to comply with the ordinance.

Fourth, Appellants argued that the ordinance constitutes a taking of their property without just compensation. The court disagreed, emphasizing that takings claims depend on specific circumstances and that the appellants failed to provide the necessary facts to support their claim, such as quantifying the economic impact of the ordinance on their properties.

In their last claim, Appellants argued that the ordinance conflicts with, and is preempted by, state law, by criminalizing the sale of legal consumer products. The court rejected this argument and explained that the ordinance doesn’t impose criminal penalties, but instead revokes or suspends business licenses for nonconforming businesses.

Ultimately, the court held that the ordinance is a valid exercise of police powers and affirmed the decision of the circuit court and the BZA.

Ani Creation, Inc. v. City of Myrtle Beach Bd. of Zoning Appeals, 440 S.C. 266, 890 S.E.2d 748 (2023).