Port of Port Royal developers have until December to get project on track, town says
A group working to redevelop a long-vacant waterfront property in Port Royal has until mid-December to get caught up on agreed-upon milestones or risk defaulting, the town has told developers.
Town officials say Grey Ghost Properties is behind on a five-year development agreement, failing to begin setting aside required open space, build parks or otherwise develop the property as imagined in the 2017 document. In a response sent to the town Friday, the development group says it is not in breach of its agreement with the town, that the timeline was always intended to be fluid as the market allows, and that the COVID-19 pandemic has hindered communication and progress.
The Port of Port Royal is a former state port terminal on Battery Creek on the southern and western sides of the town’s Old Village area. After a tense decade or more as the property sat on the market, Grey Ghost bought the land from the state for $9 million in 2017.
Building out the land to add a mix of homes, restaurants, a marina and hotel to tax rolls has been anticipated as a welcome boost to town coffers and a chance for an aesthetic overhaul to the landscape of vacant industrial buildings and fenceline.
To date, the property has a new restaurant, a boat storage and sales operation and a residential neighborhood set to break ground. A portion of the rail trail planned through the property has been built.
But several factors have worked to complicate the larger process, including lingering effects from a fire that destroyed a seafood market five years ago and left a trail of difficult decisions in its wake. There’s also a town dock in disrepair and questions about the future of the seafood industry. A special tax district established for the port lost much of its ability to generate money for necessary infrastructure projects with a sale at a fraction of the initial appraised price.
Two previous letters from Port Royal — in June 2019 and this past August — detailed concerns over delays with the development, the town said in its most recent letter.
“Absent formal notice of a breach under the development agreement, you can continue to provide excuses and remain non-compliant,” the Oct. 16 letter from town manager Van Willis said. “The time has long since passed for your team to voluntarily abide by the terms of the development agreement.”
In the letter to Grey Ghost Properties, naming representatives Chris Butler and Whit Suber, the town said Grey Ghost was in breach of a 2017 agreement by failing to create required open spaces and to create parks and a waterfront promenade that were to be built and turned over to the town by September but haven’t been started. The document also says delinquent tax bills from 2018 and 2019 are also grounds for a breach, though it notes the 2018 bill was paid with late penalties and there was a since-resolved dispute with the county over the 2019 bill that caused the property to be placed on the delinquent tax list.
The letter also referenced unresolved provisions for relocating the seafood market and for the adjacent fuel facility and dock.
The town says overall development is behind a schedule calling for half the work being completed by 2022, and no master plan for the project has been submitted and approved as required. The letter notes the “abject failure” of Grey Ghost to develop or maintain the property except for Fishcamp on 11th Street restaurant and a drystack boat storage building operated by Butler’s business, Butler Marine. The letter called the boat facility “a use that created minimal value and is aesthetically lacking.”
To avoid defaulting on the agreement, the town says developers will have to pay 2020 property taxes. commit to cleaning up the property, resolve issues with conveying the seafood market and dock to the town, develop and receive approval for a master plan and provide a list of buildings in disrepair and a schedule for tearing them down, among other provisions.
Willis said last week the requests are reasonable enough for Grey Ghost to be up to speed within the 60 days required under the letter.
The developers said in their response from attorney David Tedder that both sides acknowledged when the agreements were last updated that firm timetables would be difficult based on numerous variables and that an extension could be necessary. Tedder said he isn’t aware of any development agreements with the town or Beaufort County in which projects were completed under the initial timeframe of a development agreement without an extension.
Tedder pointed to language in the development agreement that says the schedule is for planning purposes and “shall not be interpreted as mandating the development pace.”
“The Town seems to give too little weight to the major obstacles that have occurred since Grey Ghost acquired the property, nor any weight to any successes,” Tedder wrote. “None of the successes or resolutions of important issues are acknowledged.”
Talks with town officials about relocating the town seafood processing operation after the current property was sold for a new restaurant had been ongoing, and the COVID-19 pandemic is more to blame for delays than lack of trying, Tedder said.
Grey Ghost said communication between the developers and town officials could be better and asked the town to withdraw its default notice in favor of a work session with Town Council to make necessary decisions before plans can move forward.
