Spirit tall ship for sale
The Palmetto State's namesake tall ship is headed for the auction block.
The South Carolina Maritime Foundation plans to try to sell the Spirit of South Carolina to pay off its mounting debts, including more than $2 million in loans from a local bank, the organization said Monday.
Robert E. "Teddy" Turner IV, chairman of the foundation's board of directors, said the nonprofit has struggled to raise money in the sour economy while trying to pay off the "significant costs" of building and operating the Spirit. At the same time, the organization's focus has shifted more toward shore-based programs aimed at at-risk children, he said.
Turner's announcement came after word surfaced that a bank and the foundation's former landlord are suing the organization, alleging the foundation defaulted on more than $2 million in loans and owes thousands of dollars in back rent.
"Given the financial strain of the ship's operation and our shift in mission, the board has made a decision to attempt to sell the Spirit of South Carolina and find a suitable home for the ship in the coming months," Turner said. "We hope to avoid dissolution of the organization and to be in a position to move forward with our broader mission of curbing the dropout rate in South Carolina."
Even that, however, seems in jeopardy. Turner said that without "significant financial help," the foundation will not be able to continue its programs for youth beyond the current academic year. The foundation has already let go the ship's crew and has trimmed its staff from 25 two years ago to about a half-dozen. Still, the group's programs are "a half-million to a million short of where we need to be," he said.
The heart of the operation has always been the Spirit of South Carolina, which took several years and about $4.5 million to build. The 140-foot-long wooden ship is modeled on the 19th-century, Charleston-built schooner Frances Elizabeth. Since its first season of educational programming in 2007, more than 9,500 students have participated in activities on the tall ship -- a successful, but costly, endeavor.
A recent lawsuit filed in Charleston alleges that the foundation has failed to repay two loans worth $2.25 million issued by Carolina First Bank in April 2009. The foundation still owes more than $2 million in principal, and the lender -- now known as TD Bank -- is seeking to recoup that money, plus interest and attorneys' fees.
Named as defendants in the lawsuit are the maritime foundation and three of its board members who pledged to guarantee the loan -- Turner, John "Hank" Hofford and Pierre Manigault. Manigault is also chairman of the board of the Evening Post Publishing Co., parent company of The Post and Courier.
The bank's attorney, Christopher Ogiba, said the bank is not foreclosing on the ship itself and is only interested in recouping the money it is owed. He would not discuss any negotiations that might be under way in the case.
Manigault and Hofford have filed cross-claims stating that the bank has more than enough collateral in the ship to satisfy the debt should it seek to seize and sell the vessel. A September appraisal estimated that the value of the Spirit is $3.65 million.
Manigault said in court papers that he signed the guarantee "as an accommodation" to the foundation and was assured that the organization would hold him harmless from any legal claims arising from the loan. He has demanded that the foundation either immediately put the ship up for sale or transfer the title to TD Bank, court papers state.
Turner said the foundation has enlisted the aid of Maine-based boat brokers Cannell, Payne & Page to sell the Spirit. The board would love to see the ship stay local, if possible, but it will depend on what will likely be a limited market for a unique boat, he said.
"The great thing it has going for it is that we built the best possible ship, and we didn't cut corners on this thing," he said. "It's a beautiful boat that's been very active and remains in top condition."
The foundation also is being sued by its former landlord, Huguenot Square LLC, for allegedly failing to pay rent on its old offices at 480 East Bay St. The lawsuit states that the foundation abandoned the offices in July and moved to Lockwood Boulevard. The foundation owes $39,573 in unpaid rent, parking fees and utilities and is on the hook for an additional $123,200 in rent through 2014, when its lease expires, the lawsuit states.
Also named in that suit is the foundation's former director, Brad Van Liew, who allegedly signed documents in June 2008 guaranteeing that the rent would be paid. Van Liew left in 2009 to return to solo ocean racing. He said Monday he's had nothing to do with the foundation since that time.
In addition to owning and operating the Spirit of South Carolina, the foundation participates in local maritime events to help fund its educational programs, including Charleston Race Week, Charleston Harborfest, Spirit Ball and Captain's Cup Golf Tournament. The foundation also is involved in summer enrichment and after-school programs, and this year it took over operations of the former Boys & Girls Clubs on Mary Street, renaming it the Shaw Community Center.
Turner said the organization will try its best to finish the programs in place for the remainder of the school year, even though there currently isn't enough funding to do so.
"We have a responsibility to get them as far as we can," he said.
Reach Glenn Smith at 937-5556 or Twitter.com/glennsmith5.