Beaufort News

City of Beaufort paid Chamber of Commerce $150k to end festival dispute, documents show

The city of Beaufort paid the Beaufort Regional Chamber of Commerce $150,000 as part of a secret agreement to end a legal dispute over ownership of popular area festivals.

The chamber sued the city last year over claims that it was wrongfully denied the chance to operate two popular downtown festivals — Taste of Beaufort and Beaufort Shrimp Festival — and that the city had falsely represented ownership of the events when it filed to trademark the names with the state in 2017.

City officials said they had registered the events amid uncertainty about the festivals’ future to prevent them from being taken over by a private company and the events moved out of Beaufort.

Along with the Beaufort Water Festival and Gullah Festival, the Shrimp Festival and Taste of Beaufort are long-running events in the city known as “Heritage Festivals” that bring thousands of visitors downtown each year for food, music and road races in Henry C. Chambers Waterfront Park.

Shrimp Festival spans two days in October and has been held since 1995. Taste of Beaufort is a foodie event in May held the past 20 years.

The Chamber of Commerce says it operated the events until Main Street Beaufort took them over from 2009 until 2016, when Main Street merged with the chamber. Operation of future festivals was in question as Main Street folded, and the city said it registered the names of the two festivals to keep them from being bought and moved out of the city.

The sequence eventually led to the lawsuit in September 2018, and the case was dismissed in June.

The confidential settlement agreement was provided to The Beaufort Gazette and The Island Packet newspapers this week after a request through the Freedom of Information Act. Money will be paid through the city’s insurance.

In providing the document, City Attorney Bill Harvey said city and chamber officials are still bound by the confidential agreement and can’t comment beyond a joint statement released when the case was dismissed.

In the statement, the sides said they had “amicably resolved” the legal dispute, that the city would return the festival names it registered with the state and the chamber would return to operating the events. Neither side admitted to wrongdoing in agreeing to dismiss the case.

The $150,000 payment covered in part damages and revenue the chamber lost when the city operated the 2018 Beaufort Shrimp Festival and from the Taste of Beaufort this past spring while the court case was ongoing, according to the agreement.

The settlement will be paid by the state Insurance Reserve Fund, which provides liability coverage for state and local governments, public agencies and nonprofit medical facilities.

An individual claim will generally not affect a city’s insurance costs, said Delbert Singleton, a spokesman for the State Fiscal Accountability Authority. The Insurance Reserve Fund periodically adjusts premiums across the board, he said.

The fund paid for legal costs for Anderson, Reynolds & Stephens, the Charleston firm that, with Harvey, defended the city in the suit, Harvey said.

The city was responsible for Harvey’s fees. Harvey and city officials couldn’t immediately say how much was spent defending the case.

As part of the agreement, in addition to the payment:

  • Beaufort agreed to give back trademarked names it registered with the state for the events and that the Chamber has the right to operate the festivals.
  • The chamber won’t move the festivals outside the city. If they do, the city will have the chance to buy the events, including the names and operating rights, for $1.
  • The city will have the first chance to buy the festivals if the chamber decides to sell. The city can also buy the rights to the events for $1 if chamber officials don’t apply for permits by established deadlines or decide not to plan and organize the festivals.

  • City officials and chamber leaders won’t criticize each other.

Stephen Fastenau covers northern Beaufort County as a reporter for The Beaufort Gazette and The Island Packet, where he has worked since 2010 and been recognized with state and national awards. He studied journalism and political science at the University of South Carolina in Columbia and lives in Beaufort.
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