Port Royal’s $10M funding idea would launch waterfront redo. Not everybody’s on board
All has been quiet on the waterfront at Port Royal’s deep-water port for decades despite repeated efforts at redevelopment.
Then in 2025, Safe Harbor Marinas, which bought land in 2021, and the town negotiated a redevelopment plan for the pretty but underused seaport, putting the parties on the cusp of breaking ground this year after 22 years of uncertainty.
But there’s one final hurdle to clear before the town can write the next chapter for the Port of Port Royal. That’s a tiff over the possible use of an alternative means to finance the public improvements instead of a Tax Increment Financing (TIF) district.
TIF was originally the main means intended to generate the necessary millions in revenue needed to finance the public projects tied of the development -- like streets and parks and a promenade. But as a result of delays in implementing the project, the town’s TIF district is expiring.
Last week, town officials unveiled an alternative way to finance improvements they hope will finally kickstart the project. It’s called a multi-county industrial park, or MCIP.
The start of one of the region’s most anticipated developments depends on the substitute economic development financing mechanism. But the town needs Beaufort County’s support in creating the MCIP. And officials with Beaufort County public schools, which would contribute the most funding, are resisting and telling the town to ask developer Safer Harbor or residents to foot more of the bill.
Town officials took exception to the criticism. While acknowledging the financing strategy is novel and complicated, they argue a MCIP will simply allow them to access, via a different means, the very same funds previously obligated in the original TIF to get the ball rolling.
“Now we’re just finally at a place, let’s turn this thing on and get to work,” Mayor Kevin Phillips said.
Here are 10 things to know about the long-awaited waterfront project including the latest development involving the public infrastructure financing.
1. The site
The 320 acres overlooking Battery Creek serves as the town’s front porch and can be seen by thousands of motorists daily who cross the Bell Bridge. The picturesque property fronting the water, situated roughly between Sands Beach and Ribaut Road, has been the subject of development talks and public interest since The South Carolina State Ports Authority closed its terminal in 2004.
2. The history
Here’s the short version: Safe Harbor Marinas, which operates marinas across the country, acquired the former South Carolina State Ports Authority terminal in late 2021 for $20.5 million.
The South Carolina Ports Authority ran the Port of Port Royal marine terminal from 1959 to 2004. The state sold the property in 2017 to Grey Ghost Properties, which, in turn, sold the land to Safe Harbor.
3. The plans
In June 2025, after years of butting heads over a number of issues, the town and Safe Harbor finally endorsed a development agreement that would bring, over time, a “world-class” marina, shops, improved public access in the form of a new promenade and parks and residential housing to one of the most recognizable properties in northern Beaufort County.
4. Financing considered “game-changer”
When a TIF district is created, the current property tax revenue generated in that specific geographic area is frozen. As property values rise, the local government collects the surplus, known as the “increment,” to pay off the debt used for the upfront improvements such as roads, utilities and parks.
Port Royal created a TIF for the waterfront development in 2012, and it generated $400,000. But it is set to expire after the town missed a deadline to use it or lose it after the development failed to materialize.
The MCIP would replace the TIF and allow the town to access the untapped $400,000 in the expired TIF district, and raise $10 million over 20 years, said Lawrence Flynn, the town’s bond counsel.
Flynn and Town Mayor Kevin Phillips pitched the idea to the Beaufort County Council Finance, Administration and Economic Development Committee May 18.
Flynn called it a “game-changer” for the town and the project.
5. School district raises concerns
The expiring TIF district was previously approved by the county and the school district to support the redevelopment.
But School Board Chairman Carlton Dallas of Hilton Head and board member Dick Geier of Port Royal are raising concerns about a MCIP.
With the TIF, Geier said, the school district and Port Royal had a mutual agreement. In this case, the county has the sole discretion to create the MCIP. If the County Council approves a MCIP, Geier predicted other local municipalities will ask for one too, setting a precedent. “Are you prepared for the responsibilities and the blame?” he said.
A MCIP also raises an issue of taxpayer transparency because the fees would be hidden within the district’s millage rate, Geier said. The district needs to pay a great deal of attention to its budget to keep the trust of taxpayers who have passed two recent referendums, he said.
“As an individual board member, I have a great concern,” Geier said.
Dallas questioned leveraging funding from Jasper County and the school district.
A MCIP is a regional designation involving two or more counties.
Under the Port Royal MCIP, Beaufort County would partner with Jasper County, which would get 1% of the revenues. The rest would go to Beaufort County, which would distribute the funds to Port Royal per an agreement.
“This is an effort to actually leverage funding from entities which really, normally, would not have a fighter in this fight,” Dallas said.
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Dallas suggested the town look to the $6 billion Safe Harbor Marinas to contribute more.
“The partner owns a significant portion of that [property] and they have the financial wherewithal, if they are so inclined, to fund this almost immediately,” Dallas said.
The town could also look at ways to “monetize the asset,” Dallas said. One way would be charging “premier memberships” so residents could use the site and get access and rights the average person wouldn’t.
6. Port Royal responds to concerns
The idea of charging residents anything to access the area rubs Port Royal officials the wrong way.
They also take issue with the suggestion that the MPIC amounts to subsidizing Safe Harbor Marinas.
Creating more public access has always been a key part of the vision for the port redevelopment dating back to days when it still was owned by the state, long before Safe Harbor came along, they say. Two parks, a promenade and shrimp boat docks are in the plans.
“Every bit of this was public and was always intended to be public and we were directed by the governor and our own people to keep it public,” Willis, the town manager, said.
Town officials said they are asking the school district to contribute what it originally said it would when the TIF was in place, which was up to about $300,000 annually.
The port redevelopment has had its ups and downs, Mayor Phillips said, but last year the town approved the first master plan for the site and, at long last, is ready to move forward.
“Were literally discussing turning on the funding mechanism that, again, has been in placed since 2009,” Phillips said.
Port Royal officials note that a MCIP was previously approved in 2009 but never activated. The new MCIP being proposed is intended to update and consolidate prior redevelopment financing structures “into a single, modernized framework that reflects the current redevelopment plans for the property and anticipated future investment.”
7. How MPIC’s work
MCIP’s are special designations under South Carolina law that allow two or more counties to jointly designate land for industrial or commercial development to attract businesses. Despite the name, the park does not have to span multiple counties geographically.
Only industrial properties contribute, but they pay negotiated fees rather than taxes, which are redistributed for infrastructure and development.
MCIPs are attractive to local governments because they allow more flexibility in how the funds can be used. They are attractive to industry because they can receive job tax credits and lower tax rates.
But in this case, Port Royal officials emphasize, fees collected in the Port Royal MCIP would equal the amount that would have been collected in property taxes under the expiring TIF district.
8. Who would pay?
Based on current tax rates, over the 20 years, Beaufort County School District would contribute $5.5 million; Beaufort County, $2.025 million; and Port Royal, $2.45 million.
No one is using revenues now, Flynn said, and if the town were able to use them to begin building public projects it would be “game changing” for Port Royal.
A MCIP is a novel way to fund the work, Flynn said, but it involves the same revenue stream.
9. What would it be used for?
Revenue raised could be used for parks, recreational facilities, waterfront, trail, transportation and parking improvements, utility infrastructure, public access facilities, landscaping and other redevelopment-related infrastructure necessary to support the project.
The town would borrow money for the work, then pay it back with the fees collected in the business park.
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10. What’s next
The issue is expected to be discussed again by the County Council’s Finance, Administration and Economic Development Committee. County staff is recommending approval of the MCIP.
Flynn noted the town has “been waiting 20 years” to begin the port project and is eager to begin work this year.
“It’s getting more and more expensive by the day,” he said. “The hope would be to get this done by the fall. “
Safe Harbor Marinas is going to begin demolition of old buildings soon, Phillips said. He’s confident the School Board and County Council will work with the town “and then we can start working on the public assets.”
