THE BEAUFORT GAZETTE – FEBRUARY 9, 2010

Deal nears on Port Royal land sale

With a signed letter of intent, hope has risen again that the idle port of Port Royal has found a buyer.

S.C. State Ports Authority chairman, Bill Stern, signed a letter of intent Friday to sell the approximately 51-acre port of Port Royal property to a prospective Charleston developer.

Although the sale is not final, the authority will take the property off the market while it finalizes a contract with the buyer, Stern said.

Officials would not release the name of that buyer nor the sale price, citing ongoing negotiations. NAI Avant, the broker listing the property, reduced the price tag from $27 million to $20.4 million last year.

A group of Hilton Head Island investors tried to get financing for the parcel in 2007, but the deal fell apart in 2008.

Stern and state Senator Tom Davis, R-Beaufort, who worked on the deal, said they are confident in the developer’s financial wherewithal and expertise to make the deal successful. Stern added that given the economy, he will remain “cautiously optimistic” until the sale closes.

Port Royal officials have “had extensive conversations” going over plans and potential costs with the prospective buyer based in Charleston, town manager Van Willis said.

“This is something that’s basically been ongoing with them for six months,” Willis said. “We’re obviously very excited. (The letter of intent) is a positive first step toward an eventual closing on the property.”

The two parties now have about 45 days to sign a purchase agreement, and from there, will establish a new timeline to close the deal, Stern said.

The process could take up to nine months, giving developers time to conduct environmental studies, work with Port Royal and do their “due diligence,” Davis said.

“I’m very encouraged and very impressed so far with the potential developers,” Stern said Friday. “There’s been good negotiations on both sides…We wouldn’t have even gotten to this point without all of the cooperation from Tom Davis and (state Rep.) Shannon Erickson (R-Beaufort).”

Friday’s announcement might signal the end of a five-year effort to sell the shuttered port property which runs along Battery Creek amid acres of marshland. In 2004, the state ordered the port closed and sold. At least one deal fell through in 2008 as the economy soured. The town already has development plan in place for the property that includes residential and commercial spaces, as well as public parks.

In June, legislators passed a law giving the ports authority until the end of 2009 to sell the property, threatening to transfer the port to the state Budget and Control Board if it did not meet the deadline. The property did change hands, although the authority stayed on as an “agent” to continue negotiations with the prospective buyer.

The law also established a ports authority review and oversight commission made up of state senators and representatives to oversee the authority’s operations. Davis, a former ports authority board member, was appointed to the oversight commission.

Port Royal has waited a “long time” for a suitable buyer to come along, Davis said. He’s seen the development plans and said the “scale, character and street grid looks like an extension of (the existing town).”

Davis also said he was also familiar with the developer’s previous work and considers them qualified to take on the weighty port development.

“In terms of size, a mix of retail and commercial and residential, absolutely,” Davis said. “I think they have excellent qualifications for that.”

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