County forgives interest on $1M Heritage Classic loan

cconley@islandpacket.comJuly 23, 2012 

Beaufort County Council voted Monday to forgive $30,750 in interest on a 2011 loan to the Heritage Classic Foundation.

Council also settled a naming dispute for a proposed 13-mile rail trail between Port Royal and Whale Branch, choosing to name the corridor the "Spanish Moss Rail Trail." Some residents favored calling the trail the "Magnolia Line Trail."

The Heritage Classic Foundation received a $1 million loan last year to offset the cost of running the PGA golf tournament on Hilton Head Island after its previous sponsor, Verizon, pulled out. The town of Hilton Head donated $1 million to the foundation, which also tapped reserves to put on that year's event.

Heritage officials repaid the remaining $750,000 to the county last month, roughly four years ahead of schedule, but council did not decide at the time whether the interest should be repaid. The rate on the loan -- which began accruing last August -- was 3.25 percent.

Councilman Stu Rodman, who represents part of Hilton Head, said Monday that the county gains plenty from the annual golf tournament through tourism and national exposure but loses little by forgoing the interest.

"If we had not loaned them the money over the same period that they borrowed it, we would have earned only $2,000 ... because interest rates are so low," he said.

That may be, Councilman Gerald Dawson said, but forgiving the interest was "not good financial practice."

"I don't know of any lending institution any of us can go to and borrow any amount of money, pay it off early, and then they waive the interest that accrued on it," he said.

Council voted 8-3 to waive the interest, with Councilmen Dawson, Herbert Glaze and Steve Baer opposed.

Royal Bank of Canada was title sponsor and Boeing Co. was presenting sponsor for this year's event, held April 9-15.

The decision to make "Spanish Moss Rail Trail" the official name of a Beaufort-area rail trail followed a lengthy public hearing that included comments from about a dozen people.

While most supported sticking with Spanish Moss Rail Trail, which has been the trail's de facto name for some time, others felt Magnolia Line Trail better captured the corridor's history. The Magnolia Line railroad ran from Augusta, Ga., to Port Royal for more than 100 years, partially along the proposed trail route.

David Tedder, with the Friends of the Spanish Moss Rail Trail group, argued that there will be opportunities to incorporate that history along the trail. Others suggested the Magnolia name could mark a section of the trail or a "spur" linking the trail to other destinations.

"We have tried to come up with a big-tent name," he said. "The Spanish Moss Trail allows for us to include all kinds of historical references along the way."

Council endorsed the "Spanish Moss" name unnaimously.

Trail construction is expected to begin this fall, largely through grants and assistance from Atlanta-based PATH Foundation and the James M. Cox Foundation.

In other action: Council awarded a $15 million construction contract to Cleland Site Prep, of Ridgeland, to widen a 4.5-mile stretch of S.C. 170 between U.S. 278 and S.C. 46 from two lanes to four lanes. Funding for the $25 million project, expected to begin this fall and last two years, came from local money and a grant from the S.C. Transportation Infrastructure Bank.

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