Port Royal envisions new seafood facility with $1.8M insurance settlement, but questions remain
The insurance settlement from the seafood market fire had finally arrived, but the windfall brought questions about who controls the money and about plans to rebuild. The property is owned by the S.C. Ports Authority, but the town was required to hold insurance on the buildings through a licensing agreement.
The town is seeking answers about what it might be entitled to for costs incurred to establish a temporary seafood operation in an adjacent building. The money -- a check from the state Insurance Reserve Fund for damage to the market and an adjacent warehouse -- is currently in an escrow account.
Town manager Van Willis said the money would probably eventually be turned over to the Ports Authority.
The question would then turn to plans to rebuild.
According to a development agreement between the town and Ports Authority, the town will receive the seafood market in a property swap when the port property sells.
Willis said he has asked the town's attorney for advice on Port Royal's leverage in the matter.
Ports Authority spokeswoman Erin Dhand passed questions from The Beaufort Gazette/The Island Packet about the proceeds and buildings to agency attorneys, who had not immediately responded late Wednesday afternoon.
After a decade of failed dealings, sale of the port property was turned over this year to the Department of Administration's General Services division for auction.
The town wants answers as to which entity to talk to about the seafood market.
The large settlement and clean slate is a chance for the town to build a state-of-the art seafood processing facility, Willis said.
Port Royal has leased the docks and market operation from the Ports Authority. Operating the docks has been a financial drain for the town much of that time, a burden town officials say is necessary to maintain an iconic part of Port Royal's character and history.
"There is an opportunity there to create something special," Willis said.
EFFECT ON THE SALE
The most recent potential buyers said not knowing the amount of the insurance settlement played a part in not closing the deal.
Palmetto Alliance, the development group that made a $15.42 million bid on the property last summer, terminated its contract with the S.C. Ports Authority on Dec. 11, the deadline to complete due diligence.
At the time, Ports Authority attorney Neil Robinson said the sellers didn't know the settlement amount and would have turned over the rights to the money at closing.
The Ports Authority allowed the potential buyers to cut from the deal a residential area viewed as overpriced. That, with the $1.8 million insurance proceeds would have made closing a breeze, said Whit Suber, who worked as a consultant to the potential buyers on the deal. He said the group was within $300,000 of closing.
"It would be disingenuous for me to say if (the settlement) was $300 grand, we would have closed," Suber said. "But I can assure you, at 1.8 million, it would have no longer been a head-scratcher."
MOVING FORWARD
Willis said Wednesday that Gov. Nikki Haley's office has been responsive on the issue of the port sale, that the impending auction is on the radar and the process moving forward.
The town has asked to ensure the law is followed regarding a required new appraisal, that the appraiser have knowledge of closed industrial sites and the process account for environmental and structural concerns.
State law does not include a timetable for conducting the appraisal.
A lawsuit against the Ports Authority and town of Port Royal related to a former railroad line right-of-way could affect the schedule. Willis told town council he expects the town will be removed from the suit, that it doesn't own the property and has not signed any agreements related to the property.
When the topic of the port was raised Wednesday at a luncheon for the local legislative delegation and later during a town council workshop, the consensus was relief that the process was out of Ports Authority hands.
But when someone asked council whether the Ports Authority still had a hand in the sale, nobody affirmed.
"Nothing would surprise us," councilwoman Mary Beth Gray-Heyward said.
Related content:
- Going once, going twice: Port of Port Royal headed for auction, Dec. 19, 2015
- Port Royal, Ports Authority relationship all but over, Dec. 16, 2015
- Update: Potential Port of Port Royal buyers say high cost, insurance questions killed deal, Dec. 14, 2015
This story was originally published January 7, 2016 at 9:17 AM with the headline "Port Royal envisions new seafood facility with $1.8M insurance settlement, but questions remain."