It would be understandable if town of Port Royal officials and residents were dejected last week when a deal to sell 52 acres of state-owned land in the town fell through for the third time in the past six years.
They've taken all the right actions and made all the right commitments. Unfortunately, the development group eyeing the Port of Port Royal, owned by the S.C. State Ports Authority, failed to find a lender willing to risk enough money to underwrite a $17 million land purchase and jump-start its redevelopment.
Principals for the Port Royal Redevelopment group have indicated they still are interested in the property, and we hope that it bears fruit. They have local ties, which is a good starting point for community-minded development.
However, they must go back to the drawing board if they're to pull off this purchase.
The good news for the town is that it does not have to start all over again.
The state Ports Authority has promised to update a property appraisal and work with the town to ensure a quick turnaround and sale. Also, development agreements and plans created by the town to convert the property to residential and commercial space can be used for future suitors, the town manager says.
Perhaps most comforting is that the town has not yet borrowed a nickel, although it had pledged $4.5 million to improve roads, sewers, parks and other public facilities in and near the port. A special tax district to pay for those improvements is still in place, however, and could be used if a new purchaser emerges.
Also encouraging are national indicators reported in recent days that suggest U.S. property values are on the rise, along with builder confidence.
Unfortunately, the indicator that matters most in this case is lender confidence. When will banks and others with capital to invest feel safe enough to risk it on a mid-sized development such as this?
That could be a while longer, so supreme patience is in order, which you don't have to tell anyone in Port Royal. So long as the status quo holds, the property is only likely to sell to a group better-heeled than the Port Royal Redevelopment group -- one that can afford to develop the property without much financing beyond the purchase price, or at least one that can sit on the property until the logjam in construction lending breaks.
Not many such groups are left standing in this economy, however.
Until one emerges, the Ports Authority should be a good neighbor and spruce up the place a bit. That probably won't make the property any more attractive to developers, who can see shopping malls, rows of houses and dollar signs in the most desolate of landscapes. However, a kempt parcel could enhance the property values and businesses of those within sight of the old port. Those folks must get on with the show, sale or no sale.
As for the town, officials there should be vigilant in holding the Ports Authority to its promises, including aggressive marketing of the property. Port Royal should insist on an aggressive asking price to match.
The town can pitch the property to prospective buyers on its own, as well, though it should resist temptation to offer public money or tax breaks up front in hopes of striking a quick deal.
After all, short-term inertia is frustrating, but a deal that gives away the farm could inflict long-term damage.