News Column

Port Royal eyes countywide sales tax to fund port purchase

May 4, 2014

By Erin Moody, The Island Packet (Hilton Head Island, S.C.)



May 04--With no conventional financing options available allowing Port Royal to purchase the state port property in town, officials are looking for other ways to raise capital.

And that includes a proposed 1 percent capital-projects sales tax that would be applied countywide.

Town manager Van Willis said the shuttered Port of Port Royal, last appraised at $22.5 million, is being added to the list of projects that will be presented to the county's Capital Project Sales Tax Commission.

"Hopefully, they'll see the worthiness of what we're presenting," he said.

The five-member commission is considering projects for a list that could be funded by a temporary sales tax.

For Port Royal to receive a portion of the proceeds to finance a port purchase, the commission would first have to add it to the list.

Beaufort County Council would then have to approve that list.

Finally, the tax would have to be approved by voters in a referendum, possibly in the November general election.

The port has been vacant since 2004, when the S.C. Ports Authority deemed it too expensive to continue operating. The authority has been ordered to sell the land, but three attempts since 2006 by developers to purchase it have fallen through.

The authority is in talks with the town to sell it, but Port Royal has a borrowing limit of about $2.1 million, according to state law. Authority chairman Bill Stern has said the authority might consider seller financing or an installment purchase.

"The town of Port Royal believes this is important, and we as the county believe we want to support the town," county administrator Gary Kubic said.

Even if Port Royal's plan clears all hurdles, it remains unclear how such a deal would be structured, Kubic said. The county could buy the land and transfer the deed to Port Royal, or it could transfer the money to the town for the purchase.

"What we don't have, and I can't answer, is: Who would sign the check?" Kubic said.

Willis said the purchase price of the property is likely to be between $15 million and $20 million. The town would then seek to sell it, likely in parcels, a process he thinks would take a year or two.

Proceeds could be used to retire the remaining debt on the property, which would free sales-tax collections to be used for other projects on the countywide list, Kubic said.

"The idea itself is the most important feature of this project, because that property has been available for at least a decade and this creates a financing mechanism, which is the key, and the most important part for the voters to consider," he said.

Follow reporter Erin Moody at twitter.com/IPBG_Erin.

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(c)2014 The Island Packet (Hilton Head, S.C.)

Visit The Island Packet (Hilton Head, S.C.) at www.islandpacket.com

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Source: Island Packet (Hilton Head, SC)


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