Port Royal property back on market
Developer cites credit, real estate turmoil
The Port of Port Royal is back up for grabs.
A proposed buyer of the waterfront site in Beaufort County pulled out of a $26 million deal to acquire the land for a real estate development, the State Ports Authority said Tuesday.
Port Royal Harbour LLC blamed the move on the real estate downturn and turmoil in the financial and credit markets. The SPA said the 50-acre tract, not including marshland, is back on the market, and the agency is actively seeking a new buyer.
Brad Nettles
The Post and Courier/File
The Elbia delivers a load of cement to the SPA's Port Royal terminal in 2003.
In a statement, the SPA said it believes "there's interest in the land and we look forward to advancing the sale."
Tom Gardo, a spokesman for Port Royal Harbour, said the decision to pull back boiled down to finances. In the current lending climate, banks "are not stepping up to a deal of this magnitude" and the buyers were not able to secure the funding, he said.
The company was disappointed, but it had exhausted all of its resources and could not meet the established deadlines, he said. "They worked for several months on this," Gardo said.
The setback marks the latest twist in a drawn-out bid to sell the former industrial site.
The 50-year-old port near Beaufort was put up for sale in late 2005. After initial efforts by the SPA failed to attract bids that met the assessed value, the agency brought in outside help to sell the site.
A marketing effort by real estate firm NAI Avant of Columbia resulted in a high bid by Main Street Realty, headed by David Staley of Hilton Head Island, and Global Asset Alternatives of Atlanta, under their Port Royal Harbour partnership.
The deal became embroiled in state politics when it was revealed last month that Gov. Mark Sanford relayed damaging rumors he had been told about Staley. Sanford said he was obligated to check out the developer's track record, given the importance of the land deal. Some lawmakers have called for an investigation, but Sanford supporters said he was only looking out for South Carolina's best interests.
Town of Port Royal officials had hoped the deal would help jump-start the town's economic development.
Under an agreement between the town and the SPA, the site was divided into three parcels that included a marina, residential and commercial space, and a hotel.
Town manager Van Willis said Tuesday that he and other local officials were disappointed but acknowledged it is a "tough time in the financial markets." The town hopes it can take something from the last four months, he said, such as using information it gleaned to benefit a future buyer.
"We certainly don't want to start the process again," Willis said.
On Tuesday, the governor also said he was disappointed the deal fell through because the SPA board has to start over. But Sanford said the cautions he raised earlier about the developer were realized.
"The very thing that surfaced when I did my due diligence was some limitations on his level of expertise," said Sanford, who has experience as a real estate investor. "If you've done a hundred of these projects, it's easy to get financing."
Sanford had spoken repeatedly about the project with Jim Chaffin, whose Chaffin/Light Associates is known for upscale development projects. Chaffin, a Sanford campaign donor, had submitted a bid for the port land, but his offer was well below the estimated property value and was rejected.
William Bethea, Chaffin's lawyer, said Tuesday the assumption was that there would be no other opportunity to bid on the project. He said finding a buyer in the current financial market "is going to be no small task."
The Associated Press contributed to this report. Reach Peter Hull at 937-5594 or phull@postandcourier.com.
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