Patriots owes $9.2M in 2 years: Land sales an option if extended loan not paid

Much of the 367-acre state-owned Patriots Point is currently undeveloped, making the property a tempting potential revenue source for the cash-strapped tourist attraction.

COLUMBIA -- Patriots Point must figure out in the next two years how to repay the state $9.2 million, or powerful lawmakers may look to collect the debt by selling valuable waterfront property surrounding the naval and maritime museum.

Senate Majority Leader Harvey Peeler, R-Gaffney, said Wednesday the state has been patient enough, that Patriots Point exemplifies what is wrong with South Carolina government and that it's time to "fold this project."

"If history proves correct, we're not going to get the money back," Peeler told his fellow lawmakers on the Joint Bond Review Committee.

Despite Peeler's concerns, the committee agreed to give Patriots Point a two-year extension on the loan, which was due to be repaid in December. The agreement came with the promise that the museum would pay $500,000 now.

Patriots Point will be charged interest as its new management and restructured board develop a plan to shore up finances. The loan agreement is pending final approval by the state Budget and Control Board in coming weeks.

Senate President Pro Tem Glenn McConnell, R-Charleston, said Patriots Point officials understand the extension is not a bailout. He said the museum needs to create a master plan, pinpoint places to make money and get a handle on the maintenance of the vessels in its care, especially with regard to corrosion.

"It is the last chance to save Patriots Point," McConnell said.

Patriots Point accepted the state loan for emergency repairs to the destroyer Laffey in the summer of 2009, after the World War II ship sprang some 100 leaks and seemed poised to sink into Charleston Harbor if a major storm hit. The ship, now restored, remains docked at the Macalloy property, a 135-acre private industrial site in the Neck Area.

Patriots Point paid $125,000 for a mooring structure and continues to foot a $11,250-rent bill per month to Shipyard Creek Associates to house the ship. The agency must assess the costs, estimated at more than $2 million for work that includes moorings and dredging, to bring the Laffey home.

At the same time it faces $80 million to $100 million for maintenance and repair work on its main attraction, the aircraft carrier Yorktown. The agency continues its discussions of redeveloping its prime real estate to generate an income stream that would support its mission.

Patriots Point Development Authority Chairman Ray Chandler said after Wednesday's meeting the board wants South Carolinians to know that Patriots Point is a valuable asset when it is managed correctly.

"It is a responsibility that we take very seriously," Chandler said.

Chandler and Executive Director Mac Burdette said Patriots Point draws around 270,000 visitors a year and generates more than $3 million a year in sales tax for the state but does not receive any annual state appropriations. The museum's financial woes come from maintenance work that's been pushed off over the years. To make more money in the future, officials are considering running a day camp and expanding the gift shop, among other ideas.

Senate Finance Chairman Hugh Leatherman, R-Florence, said he has no question in his mind that the state will get its money back. Patriots Point either repays the loan, or the state ends up with valuable waterfront property, he said.

The Patriots Point Development Authority Board oversees more than 350 acres of property on Charleston Harbor, much of which is under lease for a golf course, a hotel and a collegiate athletic complex.

Rep. Chip Limehouse, R-Charleston, resisted any mention of the state selling the property. The land should be preserved, maintained and protected, not developed, he said.

"I want to give the new leadership at Patriots Point the opportunity to work through the myriad of financial problems that they've inherited," Limehouse said.

Staff writer Allyson Bird contributed to this story. Reach Yvonne Wenger at 803-926-7855, follow her at twitter.com/yvonnewenger and read her Political Briefings blog.