Lawsuit: Sea Pines Resort meddled with this Harbour Town property deal

Sea Pines Resort had no legal right to buy Harbour Town property housing a surf shop after stopping the sale to a company that had been leasing the location, a lawsuit contends.

Bittmint LLC, which owns The Harbour Town Surf Shop on Mariners Way, said in its suit that Lynda H. Johnson and her brother, Charles S. Giannone, who owned two commercial condominium units where the shop is located, initially agreed to sell the property to Bittmint for $580,000. But the deal fell through after Sea Pines Resort claimed it had first right to buy the property, the suit alleges.

In early May, the suit said, Sea Pines Resort sent a letter to the property owners and Bittmint, which had been leasing the location since 2010, to inform them that the resort was “exercising its ‘right to purchase’” the property for the amount in the contract.

The suit contends that “the covenants and rights claimed by Sea Pines are vague, void, and unenforceable.” It claims that 30 days before the suit was filed, there were about 47 property transactions in Sea Pines, and the resort claimed its right to purchase only the Mariners Way property.

Simon Fraser, an attorney with the Hilton Head firm of Fraser & Allen, and who is not involved in the case, said a right of first refusal is common in the covenants of various communities on the island. That right requires a seller to notify the holder of the right when a property is up for sale, allowing the holder to buy the property before someone else, he said.

Michael Mogil, a Hilton Head attorney representing Bittmint, said the company owns the space next door to the two properties that the resort purchased. He said the lawsuit is “seeking to rescind Sea Pines’ exercise of its right of first refusal.”

Bittmint is seeking, among other things, damages for alleged breach of contract. The suit was filed May 26 in Beaufort County Circuit Court.

Steve Birdwell, president of Sea Pines Resort, said the resort’s right of first refusal has been in place for more than 40 years. But it hasn’t been used very often, he said, noting he could recall three such instances in about 20 years.

Before purchasing the Surf Shop property, the resort took a few days to study the contract, during which time no one raised concerns, he said.

“Sea Pines Resort owns most of commercial real estate in Harbour Town, and we’re interested in purchasing the Surf Shop and other commercial property to continue to make improvements,” Birdwell said. “We have a desire to improve the whole experience of Harbour Town, including retail shops.”

Birdwell said there are no immediate plans to change the Surf Shop, and the lease with the tenant will continue. The purchase is not directly related to a planned referendum on a proposal to add 90 rooms to The Inn & Club at Harbour Town, located nearby, he said.

Efforts to reach Johnson and Giannone, who are named as defendants in the suit along with the resort, were unsuccessful.

This story was originally published June 15, 2017 at 1:58 PM with the headline "Lawsuit: Sea Pines Resort meddled with this Harbour Town property deal."