Heritage golf tournament organizers have asked Beaufort County to release the $1 million it committed last year to save the 2011 event, and differences are emerging about how and when that loan should be repaid.
The Heritage Classic Foundation, which runs the PGA Tour tournament on Hilton Head Island, formally requested the money in a letter Tuesday.
Last year, the town and county councils each committed $1 million -- and the foundation pledged $4 million from its own reserves -- to secure a spot on this year's tour schedule even though the tournament lacks a title sponsor. Tour officials required the foundation to prove it had access to about $6 million before they would schedule a 43rd annual tournament at Harbour Town Golf Links.
The town's commitment came with no strings, but the county described its commitment as a loan.
Earlier this week, Hilton Head officials said the foundation has asked the town and county to split some of the TV advertising spots the foundation received, spots that normally would have gone to a title sponsor.
The foundation received 64 30-second ad spots: 32 on the Golf Channel and the other 32 on CBS.
The foundation has asked the town and county to split the Golf Channel spots. Sixteen of them probably are worth less than $1 million, according to town manager Steve Riley.
The foundation would retain the 32 CBS spots and try to sell them to replenish its reserves.
Town Council unanimously voted to accept its share of the spots and use them to try to attract prospective residents and businesses.County Council has yet to formally consider a similar offer, but some council members expressed mixed opinions in interviews this week.
Councilman Steve Baer, who represents part of Hilton Head Island, said he would have reservations if the foundation seeks to replenish its own reserves before fully repaying the county loan, which would come from revenues from the hospitality tax on prepared food and beverages.
As the "funders of last resort," the county should not have to tap its coffers unless the tournament absolutely needs the money, Baer said.
"The degree to which we should participate depends on how short they really are," he said.
He suggested he might oppose the plan if it comes before council.
"My obligation is to protect the Beaufort County taxpayer and not the Heritage reserves," Baer said. "If a vote is required, I'm going to be voting from that standpoint."
Foundation chairman Simon Fraser said the nonprofit organization needs to save cash, or it might not be able to operate after April's tournament.
"The only way we're going to put on a tournament moving forward is if we have some money," he said.
Councilman Stu Rodman and council's chairman, Weston Newton, said they would not necessarily object if the foundation doesn't immediately repay the loan.
Rodman said he's open to allowing the foundation to stockpile some money, so it won't go broke if a title sponsor doesn't emerge by April.
"I don't have a problem if (the loan) spans more than one year to make sure we have the Heritage for the long term," he said.
Newton also said it would be unwise for the county to immediately seek repayment, because doing so could endanger the tournament the county is trying to protect. He said council made retaining the Heritage one of its top priorities at its annual retreat Friday.
"We're all in partnership to keep this golf tournament in Beaufort County," Newton said. "It's not just ... 'How are we going to maximize the return on the $1 million?' "
Newton and Fraser both said the terms of the loan remain up for debate.
County Council, which authorized the loan Sept. 13, has three options to recoup its investment, according to its ordinance: lend the money with interest, sell ad spots to advertisers or use the TV time to promote the county.
County attorney Lad Howell said he has been instructed to "start thinking about how to craft a loan agreement" using those possibilities.
Newton said the issue is likely to be discussed during the county's next Finance Committee meeting March 21.