Clarification: A story on April 27 and an editorial on April 28 about the sale of the State Ports Authority headquarters and adjacent property need clarification. The Post and Courier contends it is entitled under the S.C. Freedom of Information Act to review all 12 purchase offers after the sale is finalized, not before.
As it looks to sell its prime waterfront headquarters in downtown Charleston, the State Ports Authority said it will not disclose any information about the dozen offers it has received from prospective buyers.
A key deadline in the deal is Wednesday, when the winning, undisclosed bidder is required to pay an additional $750,000 in earnest money. That's the next step in the sale of the SPA office building and neighboring Fleet Landing restaurant property, both on Concord Street and with unobstructed views of the ocean and Charleston Harbor. Fleet Landing would continue to operate through 2024 under its current lease.
The office property could be redeveloped into a 225-room hotel, under current zoning.
The SPA's board picked its winning bidder last week, after stating in documents sent to all prospective buyers that their bids “may be subject to disclosure under the provisions of the (state's) Freedom of Information Act.”
Agency spokeswoman Erin Dhand said the authority “will not disclose copies of the bids” to the public. The SPA denied The Post and Courier's request for copies under the state's open-records law Tuesday.
Jay Bender, a Columbia lawyer and FOIA expert, said the agency has a legal obligation to release the documents and an obligation to the public to ensure the transaction is above-board.
“The reason for having a bidding process is so everyone can see the award has been made properly,” Bender said. “The ports authority isn't exempt from FOIA, even though they've tried to act like they are in the past.
Any time you are a public institution you have an obligation with the public to act in accordance with the law.”
Neil Robinson, a real estate attorney who is handling the sale process for the SPA, said the bids are “specifically exempt from the FOIA requirements for good reason.”
Robinson cited a section of the act that allows “confidential proprietary information provided to a public body for economic development or contract negotiations” to remain exempt from disclosure.
The law also states “contractual arrangements and documents of and ... incidental to proposed sales or purchases of property” are exempt, though only until a contract is entered into or the property is sold.
Bender said he knows of no exemption that would allow the SPA to keep the bids private.
In documents sent to bidders, the SPA said: “Although the ... submissions will be treated as confidential, they may be considered public information under some provisions of the FOIA.”
South Carolina's procurement code states that the name of each bidder and amount of each bid “shall be open to public inspection” when the bids are opened. Also, other bid information is private only until a government body announces its intention to award a contract, which the SPA's board did last week.
Robinson said Tuesday “this was not a bid procedure.” Instead, the SPA is referring to the proposals from developers as “offers.”
The SPA typically provides the names and dollar amounts for winning and losing bidders competing for its projects. For example, last month it announced all bidders for a $121 million site-preparation contract, and explained during an open meeting why the winner was chosen.
Jack O'Toole, spokesman for the city of Charleston, said the city keeps bids private while they are being reviewed by staff.
“Once the issue is ready to go to (City) Council for action, all the bids would be made public, including the losing bids,” he said.
Redevelopment of the SPA's waterfront property has drawn criticism from historic and environmental preservation groups because of the potential impact on the adjacent Historic District. Mayor John Tecklenburg twice issued guidelines for redevelopment, at first stating support for a hotel with up to 150 rooms and then removing the reference to a room limit after meeting with port management.
Dana Beach of the Coastal Conservation League has said residents should have been involved in the redevelopment talks from the start. O'Toole said the permitting process for any proposed reuse of the site will include opportunities for public input.
The winning bidder will be under a tight deadline to finalize its contract with the SPA. Once the additional earnest money is paid, the winner will have 120 days to inspect the property and make sure the redevelopment plans are possible under city guidelines. The total $1 million in earnest money — including a $250,000 initial bid deposit — becomes nonrefundable at the end of the 120-day period. Closing on the property must take place within 30 days of the end of the inspection period.
In addition, the developer must agree to lease the office space back to the SPA for up to two years while the maritime agency builds its new headquarters.
The SPA has operated from 176 Concord St. — between the Union Pier Terminal and Waterfront Park — since the early 1970s. It plans to relocate its headquarters to Wando Welch Terminal in Mount Pleasant.
Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_