Port Royal strips $42K from economic corp. ‘How many projects do you have in the works?’
The town of Port Royal is planning to withhold its usual $42,000 annual contribution to the taxpayer-funded Beaufort Economic Development Corp. (BCEDC) while the county plans on doing an independent audit of the organization’s finances.
Port Royal officials say the town with the slogan of being, “cool, coastal and far from ordinary” has unique needs on the business development front. They also are questioning how many projects the BCEDC has lined up in the town in recent years.
That’s why they are proposing to spend their own money this year on efforts to boost business within the town’s borders rather than contributing to the regional economic development agency.
Contributions to the BCEDC from Port Royal and other municipalities are important because they provide most of its annual funding — $11.9 million since 2018. Beaufort County has contributed the most over that span, $10.8 million, with Hilton Head, Bluffton, Beaufort and Port Royal collectively chipping in about $1 million.
A disappointed BCEDC Executive Director John O’Toole made an 11th-hour plea to the Town Council to reverse the decision Wednesday. Town Council members held firm on the decision to keep the economic dollars in house.
“This is just one budget,” Mayor Kevin Phillips said, “for one year.”
What the BCEDC does
The BCEDC was formed in 2016 to diversify the economy by attracting businesses with well-paying jobs in key industries such as aerospace, defense and healthcare.
For example, BCEDC has provided cash incentives to builders of new buildings in the Beaufort Commerce Park that are then occupied by new businesses.
Its website states that the not-for-profit has had a hand in 75 projects that have created more than 2,000 jobs.
Its board of directors includes many area elected officials such as Hilton Head Mayor Alan Perry, Bluffton Mayor Larry Toomer, Port Royal’s Phillips, Beaufort Mayor Phil Cromer, School District Superintendent Frank Rodriguez and Beaufort County Council member Paula Brown.
Audit requested
While Port Royal is proposing taking a pass on funding the BCEDC this year, Beaufort County, which provides the most funding to the organization, is proposing to fund BCEDC’s operations budget at $393,750 in 2026, a 5% increase.
But Beaufort County also is proposing to reduce funding for the BCEDC’s “job and site” fund from $3.5 million to about $900,000. That fund is tapped to purchase and prepare sites for development.
But the job and site funding is being reduced because a large economic development project that the BCEDC had been anticipating did not come to fruition, said Pinky Harriott, Beaufort County’s chief financial officer. Therefore, the extra funding the BCEDC had asked for was no longer needed.
Harriott also has requested an independent audit of the BCEDC but she added that the review was not unusual for an agency that receives county funds.
What’s right for Port Royal?
While Phillips expressed his love for what he described as a “noble” cause, the BCDEC’s focus on larger industrial and manufacturing projects in places like commerce parks doesn’t fit with the town’s immediate goals, which include attracting restaurants and retail stores to its old village area.
Port Royal officials first raised the idea of spending the annual allocation for the BCEDC on their own economic development efforts at a May 14 budget workshop.
At that meeting, Phillips said he envisioned the town using that $42,000 possibly as seed money for standing up Port Royal’s own economic development corporation that will focus on the town’s unique needs or maybe hiring a consultant.
“What they are going after,” said Phillips, referring to the BCEDC, “is not specifically what we’re looking for in Port Royal.”
Investment in restaurants and retail outlets is especially critical at this time because redevelopment of the town’s waterfront on Battery Creek is expected to begin soon, Phillips added.
The Town Council will vote on its 2026 budget June 11. A line item in that budget will include $42,000 for local economic development efforts.
Move disappoints BCEDC
The BCEDC was caught off guard by the decision of Port Royal to go it alone on economic development efforts in the coming year.
“While I’m disappointed with your decision not to fund — not to communicate really with us — I think we can improve that if you can have a board representative who can be with us month after month to make sure you know what we are working on,” O’Toole said. “I probably own half of that communication gap as well. But we’ve been working very hard for Port Royal. If you can see your way fit to contribute some amount that would be great. If you can’t we will certainly continue to serve you as a municipality for Port Royal. Let’s just talk more.”
O’Toole cited the millions in investments and thousands of jobs that the agency has had a hand in creating over the years including a few in Port Royal.
The BCEDC, he clarified, isn’t just involved in attracting large industrial projects.
Questions about projects
But Councilman Jerry Ashmore pressed O’Toole about what the BCEDC was specifically doing in Port Royal.
“I don’t know how many projects you have in the works now and how many are earmarked for Port Royal,” Ashmore said. “Do you have a list?”
The BCEDC, O’Toole said, has asked for a list from the town of sites it would like to see redeveloped but hasn’t received one. The potential redevelopment of the Naval Hospital property and the possible construction by the Navy of a new health clinic in the area as Port Royal projects that are on BCEDC’s radar, he added.
The BCEDC, O’Toole said, is helpful to communities because it is plugged into a wide network of economic development and “site selector” contacts that can help leverage local efforts to attract businesses.
“We’re damn good at it,” O’Toole said.
The town will continue to invest in economic development, Ashmore responded. It’s just planning to take a different approach this year.
This story was originally published June 6, 2025 at 12:00 AM.
