Daniel Island residents want to turn 1,300 acres of mostly pudding-like land once described as "black mayonnaise" into recreational space, but the State Ports Authority said the $25 million bid doesn't cut the mustard.
After two years of tossing around ideas, the Daniel Island Property Owners Association sent a four-page letter of intent to the SPA on Friday.
The residents' arguments for a sale of the south end of Daniel Island include the struggling real estate market and the limited development potential for the land.
They also said the ports authority could continue to remove fill dirt from and dump dredged material on the tract as part of the construction of a new container terminal in North Charleston.
The SPA rejected the offer Monday in a one-page response.
"We are in the process of updating our appraisal on the property, but we do not anticipate that it will have declined and certainly not to the point where your offer would approach the value of the property," wrote David Posek, the agency's chairman.
Bernard S. Groseclose Jr., the ports authority's chief executive officer, said the land was appraised last year but that the figure is confidential. He would say only that the $25 million offer is "nowhere near the appraised value."
He and Posek said the SPA would be required by its bondholders and bond underwriters to sell the property for no less than fair market value.
Groseclose said the SPA's time-consuming and ultimately unsuccessful efforts to sell its Port Royal property took priority over the Daniel Island deal. Now, he said, "it is something of interest to the board to move ahead on."
For some Daniel Island residents, uncertainty over the land's future has been worrisome.
The SPA acquired the land in the early 1990s and intended to turn it into a massive container terminal known as the Global Gateway. The SPA spent about $20 million dollars to acquire the 1,300 acre site, including the cost of developing an interchange for the island. SPA officials estimate their agency and the state have invested a total of $50 million in pursuing the Global Gateway project, including land purchases, the interchange, surveys and studies.
Staunch opposition, mainly from Daniel Island residents, led lawmakers to steer the expansion to the former Charleston Naval Base in North Charleston.
"That group of residents doesn't need any reminder of how unsettling life on the island can be," said Jimmy Bailey Jr., who is spearheading the proposal in his role as vice president of community services for the property owners association.
The ports authority introduced a development proposal in 2006 under a plan to sell the site, leaving about 40 percent to parks, preserves and open space. Gov. Mark Sanford suggested instead that the land be left largely untouched so it could become the Lowcountry's version of Central Park.
Later that year, after 18 developers expressed interest in buying the tract, the SPA took it off the market to re-evaluate the site and its options.
Bailey and a steering committee made up of Daniel Island residents began organizing a bid two years ago. He said he doesn't view the ports authority's response this week as the end of the negotiations.
"We took it as an acknowledgment they received our letter of intent and not much more than that," he said. Bailey added that he could not discuss the possibility of submitting a higher bid before seeing an updated appraisal.
"Through future conversations, we hope we can demonstrate to them that our offer is a fair price," Bailey said.
While SPA officials do not expect the real estate slump to significantly affect the previously appraised value of the land, they also invited the property owners group to submit another offer when the tract goes back on the market.
The property owners association has proposed to pay for the purchase over 30 years by assessing each household about $275 a year, with the island's primary developer, the Daniel Island Co., paying for any unbuilt or unsold home sites.
The land would be owned by a new nonprofit group run by members of various island organizations.
The group said it would buy the property only if the majority of voting members approve the deal. Residents were to be notified about the plan by first-class mail Wednesday.
The association's proposal calls for parks and nature preserves that could include a 36-hole golf course, hiking and biking trails and a bird-watching tower. It also shows limited but unspecified development on the Cooper River side of the island.
Ray Passailaigue, a Daniel Island builder and member of the association's steering committee, informally polled his neighbors while planning the proposal.
"Everybody's opinion was basically the same," he said: "Wouldn't it be nice for the tri-county area to have this?"