Steal or kickback? $2.2M land deal in Beaufort sparks debate over economic group’s role
Is it a steal or a kickback?
Members of the Beaufort City Council could not view a pending $2.27 million land sale in Beaufort’s city-owned Commerce Park more differently.
One council member is calling a $1 million set-aside for the economic group that brokered the deal a “kickback.” But the mayor says the overall amount of $2.27 million is generous and will give the city badly needed funds.
The dispute is over whether the city of Beaufort should sign off on the sale of 32 acres of land in its 199-acre industrial park to Clarendon Farms LLC, which is owned by Atlanta-based Cox Enterprises. Cox is a privately held conglomerate with over $20 billion in revenue, specializing in broadband, automotive and sustainability industries.
The industrial park has been marketed for years by the Beaufort County Economic Development Corporation, which, if the sale is approved, will receive $1 million.
The role of the BCEDC, whose finances have come under increasing scrutiny over the past year, has sparked a division on the council.
The details of the deal were previously discussed in executive session with council members and BCEDC executive director John O’Toole, but Councilman Josh Scallate said the BCEDC’s involvement should have been better disclosed in public meeting documents before the City Council voted last Tuesday.
The City Council approved the land sale on a first reading. One more vote is required to finalize it.
What is the property?
The Commerce Park, located north of Beaufort west of U.S. Highway 21 and the U.S. Marine Corps Air Station, is next to Clarendon Farms, a stunning estate known for undeveloped lands and riverfront.
Clarendon Farms is owned by the Cox family, and last week, Ducks Unlimited announced that Cox placed a conservation easement on 4,400 acres land it owns in the vicinity, a deal it says was worth hundreds of millions.
Cox Enterprises has not announced any plans for the property it would own in the Commerce Park. City officials presume the purchase of land on the edge of the industrial area would serve as a buffer to its recently protected lands. A spokesman for Cox Enterprises had not responded to messages seeking comment as of Monday morning.
Clarendon Farms LLC would buy 31.79 acres of city property at 90 Schork Road for $2.27 million. The land is appraised at $1.2 million, according to Beaufort County property records.
For years, the Beaufort County Economic Development Corp. has been trying to attract businesses to the park to boost the city’s tax base and generate jobs.
But many of the lots remain empty, and the role of the BCEDC, whose finances have come under scrutiny in the past year, has sparked a division among city officials.
In addition to the $1 million it would receive in a potential sale, the BCEDC will also be allowed to use fill materials from a borrow pit Clarendon will receive as part of the sale, a value of $600,000.
What do officials think?
Mayor Phil Cromer is supporting the sale. He says the city has spent more than $3 million on the Commerce Park over the years with limited returns. With this sale, the city will get almost double what the lots are worth, he said, based on the property appraisal.
“In the last 20 or 30 years or so — whatever it is — we’ve been only able to offload small-acreage sales throughout those years with limited revenue to date, so our return on investment is very, very low so far,” Cromer said. “So this sale really allows us to capture some funds we can use to repurpose in the park or wherever else its needed.”
But Scallate said the sale would remove land from potential industrial development, which generates jobs. That contradicts what the city is trying to accomplish, he said.
“I would question what happens to the property next,” Scallate said. “Does it become agricultural property and bring in almost nothing as far as the tax base goes?”
An even bigger concern for Scallate is the money BCEDC would make from the sale. Last June, Scallate unsuccessfully tried to strip $42,000 in funding earmarked in the city’s budget for the economic development agency, which is funded by area municipalities.
Council members knew about the $1 million the group would receive because it had been discussed with O’Toole in a previous closed session. The BCEDC’s involvement should have been publicly disclosed in the supporting documents and in the motion voted on by the City Council, Scallate said.
“I remember in our previous work session and Mr. O’Toole’s slides, there was a $1 million kickback to the EDC included in that $2.2 million purchase so essentially it would be a $2.2 million purchase, a million dollars back to the EDC, $1.2 million to the city and then the $600,000 borrow pit to EDC,” Scallate said. “I didn’t see any mention of that million in here, but I may have missed it.”
A tense exchange between O’Toole and Scallate followed the councilman’s comment about a kickback.
“I think in our line of work we should stay away from the word ‘kickback’ — on the lighter side,” O’Toole said after stepping to the podium. “But that’s not what’s intended here.”
O’Toole countered that he had provided the details about the proposed sale to the city and to council members in the closed-door briefing. They have the right to modify the agreement, O’Toole said, or vote against it. “I’m not trying to push this deal down your throat at all,” O’Toole said. “If it doesn’t sit well with you, I would decline it.”
Even if O’Toole provided details about the $1 million payment to the BCEDC in a previous executive session, Scallate said, eventually the details need to be made public.
“I would think, as we’re talking about this contract, that part of the deal would also be included in the details of this report,” Scallate said.
O’Toole said the $1 million will, in fact, be invested back into the city’s Commerce Park where it will assist a new developer who is interested in building a new spec building. A spec building is a commercial property constructed by a developer or builder without a contracted tenant.
O’Toole said some properties have been difficult to market because of hydrostatic pressure that saturates soils with water.
If the spec building project proceeds, it would be the first spec building constructed in the park in five years, O’Toole said.
Councilman Neil Lipsitz thanked O’Toole “for all the hard work getting this deal together.”
Scallate also raised the question of what would happen to the BCEDC’s $1 million from the sale of the city property, and the $600,000 borrow pit agreement with Clarendon, “in the event, say, the county decides to dissolve the BCEDC?”
A recent independent audit of the BCEDC, a nonprofit that relies almost entirely on taxpayer funding from local governments, found the organization had a “material weakness.” A material weakness is serious flaw in internal financial controls.
The audit, requested by Beaufort County, which contributes the most public funds to the BCEDC, was conducted for the 2024-25 fiscal year.
O’Toole previously told the Beaufort Gazette and The Island Packet the issue found by the audit was caused by an outside accounting firm and the error was corrected.
Last year, the town of Port Royal and Beaufort County scaled back funding to the BCEDC. A local nonprofit has filed a transparency lawsuit seeking records that show how public money moves into and out of the BCEDC.
Despute his objections, Scallate ended up voting for the deal, which passed 5-0. He called for amendments that would clarify the $1 million contribution to the BCEDC and its use of the Clarendon borrow pit.
Despite his vote in favor, Scallate said he isn’t likely to support the measure in the final vote.
This story was originally published March 16, 2026 at 1:14 PM.
