Beaufort News

Lowcountry Economic Network might surrender deed to banks

The Lowcountry Economic Network signaled Friday it is willing to surrender the deed to the Beaufort Commerce Park to lenders, a move that could help resolve County Council's debate about the mostly empty industrial property in danger of foreclosure.

County councilman and network board chairman Jerry Stewart said he hopes such a move would enable the network to broker a deal between Beaufort County and the lenders, whopreviously rejected the county's bid to buy the park for $1.5 million, about $1 million less than the network owes.

Such a compromise would allow the public to control the park -- which network officials say is important for future economic development -- without paying the banks the full balance of the network's loan.

"I'm confident we're all going to sit down now and realize we have to work together to come up with a reasonable compromise," Stewart said after the meeting.

The network, a public-private nonprofit organization that formed 10 years ago to recruit business to the region, has asked the county to buy the park to save it from foreclosure.

The lenders balked when county administrator Gary Kubic previously sought to negotiate a price of as much as $1.5 million, but the County Council is reluctant to pay more.

After the council voted twice to buy the park for $2.5 million, it voted Feb. 14 to postpone a final decision for 60 days so it could appraise the property and review the county's approach to economic development.

The network's unanimous vote Friday authorized its executive committee to negotiate a "deed in lieu of foreclosure" agreement with the lenders. The network would return the park's deed to the lenders; in exchange, the lenders would forgive the network's debt.

The lenders are unlikely to accept the deed and forgive the debt, however, unless they think a private group will pay them what they are owed for it, Stewart said.

If the lenders accept the deed, the public would lose control of the property, which the network says is the county's best hope for attracting high-paying jobs, particularly those associated with the Joint Strike Fighter, the next-generation military jet coming to the nearby Marine Corps Air Station Beaufort.

If the lenders reject the deed, that would indicate they don't think a private entity is willing to buy the park at full price. In that case, the lenders might be willing to negotiate a lower price, Stewart said.

Attempts Friday afternoon to reach officials at South Carolina Bank and Trust, the leader of a group of five banks that loaned the network $2.9 million to buy the park in 2006, were unsuccessful.

Don Ryan, a network board member and CEO of CareCore National of Bluffton, explained the network's latest strategy in sporting terms.

The network, he said, "needs to take affirmative action and push the ball back into the bank's hands."

Several board members said the network, which bought the property with an interest-only loan but can no longer get such favorable financing, has no choice but to quickly seek to separate itself from the park. Otherwise, they said, the park's struggles could drag down the network, hobbling its efforts to recruit new business.

Network staff said the banks have offered the network a 60-day extension at an interest rate of 6.5 percent, but treasurer Jane Upshaw said the network can no longer afford to make such payments.

"We don't have the money to hold off the banks anymore," said Upshaw, chancellor of the University of South Carolina Beaufort. "We have to do something drastic about this property in order to save the network."

In related developments:

  • The network board voted to express "enthusiastic support" of the county's plan to review its economic development approach and suggested several issues to include in that review.
  • County Council Chairman Weston Newton said he no longer plans to name any council members to the task force he has proposed to do the review. He named five business leaders to the task force Thursday.
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