Port of Port Royal sale falls through again

Another attempt to sell the Port of Port Royal has fallen through, sending the property to auction, the S.C. Ports Authority said in a statement Friday.

Palmetto Alliance Property Group, which held the current contract, was given until Friday to complete due diligence. The group would not have been able to close by the end of the year, the deadline for the sale imposed by state law last year, the Ports Authority's statement said.

Control of the property will be transferred from the Ports Authority to the state's General Services Division for auction. A new appraisal must be conducted, and the property must sell for 80 percent of that value, according to law.

The Ports Authority will still receive the proceeds from the sale but will no longer have control over the process, state Sen. Tom Davis said.

Palmetto Alliance, which included Columbia developer Steve McNair and actor Matt Battaglia, had offered $15.4 million for the property this summer. The developers originally had until the end of October to complete due diligence. That deadline was extended and the group was allowed to buy less than the whole property to help the deal close, Port Royal town manager Van Willis told town council last month.

Town staff and council have talked about ways Port Royal could gain control of the property to have a hand in who eventually develops the land. The 317-acre property, including more than 50 acres that can be developed, could be a boon for the town's tax rolls.

Palmetto Alliance had asked about the possibility of keeping an existing dry stack building and allowing buildings to go as high as 60 feet, both of which clashed with development agreements in place and would have required council approval.

The port was closed more than 10 years ago and its sale ordered by then-Gov. Mark Sanford.

Several attempts to sell all or part of the property have failed in the past decade. Potential buyers and council members have pointed to an unreasonable price -- especially for a residential portion known as the Bluff neighborhood -- as part of the problem.

Whit Suber, working as a consultant to Palmetto Alliance, said earlier this week the Ports Authority had declined to tell the potential buyers the terms of an insurance settlement after a July fire that burned the town's seafood market, which is on the port property. There are also questions about whether the Ports Authority intends to rebuild the market.

The town has operated the market out of a nearby warehouse and is in the process of getting insurance money for equipment lost in the fire.

Potential players in an upcoming auction could include the Furman Group, which had a contract on the property before it fell through in April. Local developer Dick Stewart, who has made offers on parts of the property in the past, has said he might be interested in the auction.

Follow reporter Stephen Fastenau at twitter.com/IPBG_Stephen.

This story was originally published December 11, 2015 at 7:33 PM with the headline "Port of Port Royal sale falls through again."