Beaufort sells 32 acres but kills $1M earmark for economic agency. Here’s why
The city of Beaufort has agreed to sell 32 acres in its Commerce Park to Clarendon Farms for $2.3 million.
But City Council members won’t turn over $1 million of the proceeds to an economic development group that helped arrange the deal as originally intended.
The change came after concerns were raised about the city not having enough control over how the Beaufort County Economic Development Corp. (BCEDC) would spend its proceeds from the land sale. BCEDC’s role in the deal sparked debate when it was first discussed by the City Council on a first reading in March.
To satisfy those concerns, city staff provided more information about the $1 million and BCEDC’s role, and placed that part of the sale in an agreement between the city and the BCEDC to be voted on separately by the City Council.
Ultimately, the council voted 3-1 Tuesday to sell the land, but also voted 3-1 against giving the $1 million to BCEDC.
The land in question is at 90 Schork Road in the 199-acre, city-owned Commerce Park. The owner is Clarendon Farms LLC, owned by Atlanta-based Cox Enterprises; City Manager Scott Marshall says the city has been told by Clarendon Farms that it plans to conserve the land.
Clarendon first contacted the BCEDC, which is funded by area local governments, about buying the property. The company owns Clarendon Farms, a stunning estate north of Beaufort known for undeveloped lands and riverfront. The 32-acre property it purchased from the city abuts the Commerce Park.
In March, Councilman Josh Scallate specifically called the $1 million allocation to the BCEDC a “kickback.” He also raised transparency concerns, because the $1 million BCEDC earmark was not publicly disclosed in city documents about the sale.
Mayor Phil Cromer voted to sell the property on a first reading in March, but recused himself this week after Mare Deckard, a resident of Port Royal, sent the mayor a letter noting he failed to disclose his role on the board overseeing the BCEDC.
The agreement voted down by council on Tuesday said the city planned to reinvest the $1 million into the Commerce Park for site readiness and economic development opportunities, and “BCEDC is uniquely positioned to implement these improvements and has agreed to administer the funds in accordance with strict conditions outlined in the Agreement.”
Scallate continued to raise concerns about $1 million of the sale proceeds going to a third party Tuesday, when he also said he was dissatisfied with the return on investment the city is getting in the Commerce Park.
Scallate said he did not have enough details on how the $1 million would be spent. Whether the BCEDC would be earning interest on the city funds, potentially for up to 15 years, was another question he posed.
It makes sense for the city to control the funding, he said, and benefit from any interest that could be earned on it.
“I think it’s a win for the taxpayers, to benefit from those funds,” Scallate said of the council’s decision to kill the $1 million to the BCEDC. “I think it’s win for the city to use those funds for our priorities.”
John O’Toole, BCEDC executive director, said the purchase price is far above market value and comes at a time when sales have been slow in the Commerce Park.
The $1 million would have been reinvested in the city’s Commerce Park, he said.
Scallate was joined by Mitch Mitchell and Mike McFee in voting against the agreement between the city and the BCEDC giving the $1 million to the agency. Neil Lipsitz voted for it.
Voting for the sale of the property to Clarendon were McFee, Mitchell and Lipsitz. Scallate voted no. Cromer recused himself from both votes because he serves on the BCEDC board.
While the BCEDC will not get the $1 million, it will be able to use a borrow pit located on the property now owned by Clarendon. The value is estimated to be $600,000.
