The Lowcountry Economic Network and supporting Beaufort County Council members have not made their case for the county's paying $2.5 million to buy the Beaufort Commerce Park.
Even a lower price won't justify this move -- at least not until we know more specifically how the property would be marketed going forward and why we should expect results to be different from the past four decades, let alone the past five years.
The network has sold about 30 of the tract's 165 developable acres. It owes more than $2.4 million on its $2.9 million loan.
The public-private economic development group so far has largely failed at marketing this property. Which prompts the question: If the county buys the property, why turn to the network to do this work?
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We've heard from the network that it has been hamstrung by not being able to offer the property at a discount or give it away to business prospects; that certain credits and grants aren't available under the present arrangement. So why did the network buy this property in 2006? Has that much changed in the intervening five years? Losing it as an industrial site if it had gone to someone else in 2006 is not a strong reason, given that the county controls zoning.
It's much more likely that other factors are weighing against industrial and business development there. Education and work force quality in the Lowcountry are high on the disqualifying list for the types of industry we say we want to attract. Location of the tract itself, notwithstanding its proximity to Marine Corps Air Station Beaufort, could be a problem. Linking its prospects to the Boeing plant in North Charleston, Gulfstream near Savannah and Joint Strike Fighter squadrons at the air station is still just wishful thinking today.
County Council's first instinct was to offer less than the outstanding loan amount for the property. The banks rejected the $1.5 million offer, but that shouldn't be the end of trying to cut a deal.
The last appraisal, network officials say, came in at $3.75 million in 2009. Even with stormwater improvements that came after the appraisal, we suspect that today's market would result in a lower figure. County Council should not take a final vote to buy this property until it has a current appraisal performed by someone from outside this region.
The public also needs to know the specific terms of the loan. If the property goes into foreclosure, and the banks don't get what they are owed in a sale of the property, can they look to other assets of the network to recoup their money?
Kim Statler, the network's director, seems to indicate that when she says a foreclosure would cripple the network.
"I can't shield any of my accounts," she said. "You would basically be throwing away any progress that we've made in the last 10 years."
The county has been investing about $270,000 a year in this enterprise, so that's troubling. We should note that other public entities involved in the network include the towns of Hilton Head Island, Bluffton and Port Royal, the city of Beaufort, the Beaufort-Jasper Water & Sewer Authority, Beaufort Memorial Hospital, University of South Carolina Beaufort, Technical College of the Lowcountry, Jasper County and the State Ports Authority, according to the network's website.
Still, is it taxpayers' responsibility to bail out this public-private entity? How much money is at risk? Exactly whose money is at risk?
And if the banks are not guaranteed to get all the money owed them with a foreclosure, why should the county pay full price? Are we helping the banks, as well as the network?
There's nothing wrong with a public entity negotiating from a position of strength. But the county acts as if it has no choice.
There also is the issue of privately owned industrial property in the area. What impact will the county's purchase -- and a possible undercutting of market prices -- have on their prospects? Wouldn't a possible land giveaway undercut values as much or more than a foreclosure in the area?
In short, there are still many more questions than answers on this deal. Taxpayers deserve better before County Council acts.