Historic Penn Center receives more than $800K for restoration despite ‘tax issues’
The site of one of the first schools for freed slaves in the South — a national monument dedicated to Beaufort County’s complicated Reconstruction-era history — will be getting a much-needed face lift.
On Monday night, Beaufort County Council approved $822,000 in accommodations tax money for repairs on historic buildings on the Penn Center campus on Saint Helena Island. The restoration plan is the first part of a two-phase renovation of the Penn Center designed by architecture firm Oceana Design LLC.
The money will go toward the restoration of five historic buildings built in the early to mid 20th century: Orchard Cottage, Cedar Cottage, Frisell Community House, Jasmine Cottage and the Retreat House.
“Many buildings at Penn Center are in dire need of maintenance,” according to county documents. “Penn has identified buildings which need work and which it believes are most likely to result in revenue-generating activities.”
The restorations are part of a three-pronged plan to make the Penn Center, a non-profit organization, economically stable. The plan by the center’s interim executive director, Marion Burns, includes finding outside donors and conducting a national search for a permanent director who “would run Penn Center like a business.”
“Our goal is to be true to our mission to promote and preserve the history and culture of the sea islands,” said Burns, who was appointed interim executive director in August 2018. “Penn Center is an important educational institution for black history and culture.”
Burns said the center needs about $1 million a year in funding to pay for overhead costs until the buildings are renovated. Although the council unanimously approved the money, one council member brought up concerns about the center’s apparent “tax issues.”
National monument
The Penn Center, founded in 1862 as Penn School, began as a school for 80 newly freed slaves and was a central component of the Port Royal Experiment. By 1930, the school had grown to 600 students. After the school closed more than 70 years ago, Penn Center became a community hub and a gathering place for civil rights leaders such as Martin Luther King Jr.
In 1990, the National Trust for Historic Preservation placed the center on its list of most endangered historic places.
On one of his final days as president in 2017, Barack Obama declared the center a Reconstruction Era National Monument.
The campus hosts numerous events throughout the year, including Heritage Days, a three-day celebration of Gullah Geechee history in November. Burns said last month’s event had the largest turnout ever.
Tax issues?
In March, Burns asked Beaufort County for $2.1 million in 3% ATAX funds to pay for renovations to 19 buildings on the Penn Center campus. The county asked Burns to present the proposal in phases, and the $822,000 request for phase 1 was conditionally approved by the county’s executive committee in October.
At the council’s October and November meetings, council member Chris Hervochon brought up concerns about the Penn Center’s tax returns and audited financial statements.
“I am fully in support of what Penn Center stands for, what it has stood for, and its continued mission,” Hervochon said in a Nov. 20 email to Burns, County Administrator Ashley Jacobs and council members Joe Passiment and York Glover. “However, as I have said, I have concerns about giving taxpayer dollars to an organization, any organization, with tax problems.”
In the email, Hervochon, a certified public accountant, said he had questions regarding the center’s IRS 990 forms, which had several accounting errors, and asked why the center’s 2017 independent audit report wasn’t included in its ATAX application.
Burns said the State Department of Revenue wrote the organization on Aug. 27 that the center’s decision to rent out a hotel and restaurant on its property disqualified both buildings’ tax-exempt status, but did not affect the status of the organization as a whole.
“We are challenging that based on case law, and we sent them a response a couple of weeks ago. We’re still waiting to hear back,” Burns said.
Hervochon said he was satisfied with Burns’ response.
According to the agreement, the tax money from the county will be paid to the Penn Center through invoices only after each part of the restoration plan is authorized by the architecture firm.
Burns said he expects to request about $900,000 from the county next year for the second phase of restorations.
“Some people had some concerns about the center’s perceived lack of transparency in the past,” Burns said. “I think the community ... believes we’re headed in the right direction. ... A lot of people can feel something in the air that’s very positive about Penn Center.”
This story has been updated to reflect that the S.C. Department of Revenue questioned the tax-exempt status of the hotel and restaurant on the Penn Center’s property, not the Penn Center itself.
This story was originally published December 11, 2019 at 4:45 AM.
