Lowcountry Economic Network officials will meet with lenders in a last-ditch bid to avoid shutting down the organization, but its chairman says its chances for survival are slim.
After emerging from a closed session Wednesday, the network's board voted to dissolve, but it also formed a committee to respond to what it called a last-minute invitation from lenders to discuss ways to avoid foreclosure of the Beaufort Commerce Park.
The 10-year-old nonprofit group, which recruits business to the region and receives about $270,000 a year from Beaufort County, bought the park in 2006 but is almost out of money and can no longer afford payments on its $2.5 million park debt. The five banks that loaned the money have begun foreclosure proceedings.
Network chairman Jerry Stewart said he doubts the network will survive.
Sign Up and Save
Get six months of free digital access to The Island Packet
"I don't see that there's much hope," said Stewart, who is also a county councilman, after the meeting. "We're willing to listen, but it's up to the banks."
Stewart said the network plans to cease operations by month's end. The network, whose members have stopped paying dues, would then have only about $5,000, some of which might be needed for attorney fees, he said.
Unless the network's talks with the banks are fruitful, he said, the organization will dissolve, a process he estimated would take 30 to 45 days.
Board member Dick Stewart, who made Wednesday's series of motions, also said the network's survival appears unlikely.
He said the banks have not previously been open to alternatives, such as allowing the network to defer payments, but he said that might have changed. The network will investigate that possibility until the organization's dissolution is completed, he said.
J.M. Malinowski, executive vice president of Palmetto State Bank, said his bank and the other lenders would consider deferring payments or restructuring the network's loan -- as long as that leads to full repayment.
He said network officials haven't previously been open to such an arrangement.
"What was presented to us from Day 1 was, 'You take a loss,' " Malinowski said by phone after the meeting. "That's unsatisfactory to us."
He disputed the notion the banks' stance has recently shifted, saying the banks have always been willing to discuss the loan but expect to be fully repaid for the money they provided in an effort to help the community.
"We're just reiterating a position we have consistently taken," he said.
When told of Malinowski's comments, Stewart said he was surprised to hear the banks were willing to be so flexible.
"If they felt that way, don't you think somebody would've come forward?" he asked.
He said he is skeptical but hopeful the two sides can strike a last-minute deal, noting such negotiations often come down to the wire before reaching an amicable resolution.
"I'll be surprised if it happens in this case, but I hope I am," he said.
The board also voted Wednesday to form a committee to consider annexation of the commerce park into the city of Beaufort. Some network officials think the park would be more attractive to prospective businesses if it were in the city instead of unincorporated Beaufort County.
Board member Dean Moss also asked the board to express its appreciation to the network's staff for its work since the organization's inception. "I think they've done a fabulous job, and they deserve to be recognized for the job they've done," Moss said to a round of applause.