With the Lowcountry Economic Network dissolving as its lenders foreclose on the Beaufort Commerce Park, several of the network's backers -- and some of its staff -- are joining a related organization to continue recruiting business to the region.
The Lowcountry Economic Alliance, created by Beaufort and Jasper counties in 2008, recently hired Lowcountry Consulting, a company run by former network executive director Kim Statler, to work with prospective businesses, oversee a study analyzing which industries to target and perhaps supervise lobbying efforts in Columbia.
The alliance also is receiving pledges of support from former network members.
Some Beaufort County Council members have said they're concerned an organization with many of the same players but organized under a different name might still be deemed liable for the network's debt. However, alliance officials say they aren't worried about that happening.
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The alliance is designed to be more regional in scope than the network, a 10-year-old group that has primarily focused on and been funded by Beaufort County, Statler said.
ALLIANCE HIRES FORMER NETWORK STAFFERS
The alliance's contract with Lowcountry Consulting, signed July 5, calls for the group to pay the company monthly fees of $15,566.40 plus mileage until either party terminates the deal.
Statler said she started the company about five years ago and described it as a "shell" left from previous consulting work.
She said the company will employ Jessica Bridges, formerly the Lowcountry Economic Network's director of business development, and set up shop in an office building near S.C. 170 and U.S. 278.
Citing the recent announcements that two manufacturers will open plants in Jasper County, Statler said it's important the region not lose touch with prospective businesses as the network shuts down.
"Right now, there's too many critical things happening in the region that are creating jobs for us not to do everything we can to keep an economic development presence in the community," she said.
NETWORK MEMBERS JOINING ALLIANCE
In addition to hiring Statler's company, the Lowcountry Economic Alliance recently received resolutions of support from the city of Beaufort and town of Port Royal.
Both resolved to join the alliance and invest in it the resources they once devoted to the network.
Those resolutions say Bluffton and Hilton Head Island also are considering throwing their weight -- and money -- behind the alliance.
Beaufort, Bluffton and Hilton Head each paid $15,000 a year to be members of the network, and Port Royal paid $7,500, according to the network's website.
Beaufort Mayor Billy Keyserling said he asked Beaufort City Council to support the resolution, which passed unanimously June 28, to publicly express the city's desire to continue seeking a more diverse economy.
"I simply felt it was important we put a positive step forward -- and quickly," Keyserling said. "... I don't want anyone to think we're giving up on the economic diversity game."
Keyserling said he suggested mayors of the other three municipalities join him in bringing similar resolutions to their respective councils.
Port Royal passed an almost identical resolution Wednesday.
Bluffton town manager Anthony Barrett said he and Mayor Lisa Sulka will discuss placing such a resolution, a draft of which has been sent to council members, on an upcoming Town Council agenda.
Hilton Head town manager Steve Riley said the island's Town Council could consider such a resolution after discussing economic development later this year.
Jasper County, which had contributed $20,000 a year to the network, will give that amount to the alliance this year, according to county manager and alliance board member Andy Fulghum.
It is unclear if Beaufort County will follow the other local governments' lead. Beaufort County contributed about $270,000 a year to the network before the commerce park brought the network to its knees earlier this year.
The network bought the commerce park in 2006 but can no longer afford payments on it.
Beaufort County, which rebuffed the network's request to pay $2.5 million to save the park from foreclosure, has since appointed a task force of business leaders to study the county's approach to economic development.
SAFE LEGAL GROUND?
Some County Council members earlier this year expressed doubt the county could start a new economic-development group under similar terms but with a different name, saying lenders could continue to pursue such an organization for its predecessor's debt.
One of those council members, Jerry Stewart, said this week he thinks the alliance remains separate enough from the network that it could not be pursued by the network's lenders.
"I hope we're on safe legal grounds here," said Stewart, also the network's chairman and an alliance board member.
Alliance chairman Gregg Malphrus agreed. When asked about similarities between the alliance and network, Malphrus said he's "not concerned about it" but declined to elaborate.
Others weren't as sure as Malphrus.
When told of the latest developments and asked whether the alliance was morphing into the network, County Councilman Rick Caporale said: "It sure sounds like it."
A representative of the lenders could not be reached for comment.
Caporale said he won't vote to give the alliance any money this year because council members already have ideas about how to use the $150,000 they've budgeted for economic development.
He also said he wants to see the results of the task force study before setting a new course, even though he worries it will not bring forward new ideas beyond "a rehash of what we've heard in the past."
"Before (the alliance gets) any money from County Council, we would have to have a much clearer vision of what we want to do," he said.
ABOUT THE ALLIANCE
The alliance was created "to enhance the opportunities for grant funding, planning and marketing" of the Beaufort and Jasper counties, according to their councils' resolutions.
The alliance previously staffed itself by contracting with the network, but that contract has been terminated because of the network's impending demise, Malphrus said.
The alliance is governed by a seven-member board -- although only six of those seats are filled because Statler resigned from a seat reserved for the network's executive director, according to Fulghum.
Along with Malphrus, Stewart, Moss and Fulghum, other board members are CareCore National CEO Don Ryan and Jasper County Councilman Marty Sauls.
That board recently approved a preliminary alliance budget of $369,543 for the 2011-12 fiscal year.
The alliance raised $35,000 in private contributions in its first year but has since received only state money, Statler said.
She said the alliance received $150,000 from the state two years ago, $450,000 last year and has been allotted $600,000 this year.
The $150,000 allocation mostly was spent on marketing materials, visits to trade shows and a website and GIS system, she said.
Much of the $450,000 allocation remains because it has been tapped only to fund the target market study, she said.
To receive its state allocations, the alliance must recruit private partners to match each dollar, Statler said.
The alliance previously was able to use utility tax credits and network members' contributions to do so, but the latter will no longer be possible because of the network's impending demise, she said.
Tax credits will cover only about half of this year's $600,000 allocation, so the alliance will have to find another way to match the rest or it won't receive that money, she said.
Follow reporter Josh McCann at twitter.com/LowCoBiz.