PROPERTY TO BE UNLOADED AT LONG LAST …
Thirteen years after it was shuttered, a government-owned port property in the South Carolina Lowcountry is finally being sold – although it’s unlikely to fetch anywhere near what it could have years ago.
Not only that, the property appears to have been consistently and deliberately overvalued by a state agency for years in order to keep it from being sold – all so the agency could use it to borrow money at a more favorable rate.
The Port of Port Royal – a breakbulk cargo terminal formerly owned and operated by the woefully mismanaged S.C. State Ports Authority (SCSPA) – was shuttered in 2004 after former governor Mark Sanford identified it as a surplus state property that needed to be divested.
Sanford was right …
Unfortunately, the former governor got way too engaged in the sale and disposition of this property – which is located not far from his Lowcountry plantation. In fact he narrowly dodged a major scandal in 2008 when a developer he accused of being a “womanizer” (ironic, huh?) failed to come up with the money required to purchase it.
That was one of multiple deals for this property that failed to materialize.
In 2004, legislation was passed ordering the SCSPA to sell this closed terminal so that it could be redeveloped per a master plan approved by the town of Port Royal. The SCSPA failed to do so. In fact as deal after deal fell through, the agency refused to permit the public to see its appraisals – which many believed to be grossly inflated.
In 2012 – after a $17 million development deal collapsed – the SCSPA announced it was “immediately” preparing the property “for re-marketing.”
And another appraisal …
By 2014, lawmakers had finally had enough of the charade. They stripped the SCSPA of its ownership of this asset and instructed the S.C. Department of Administration (SCDOA) to move forward with a public appraisal and auction sale of the 317-acre property.
They have … in fact the winning bid from that auction should be announced any day now.
Initially valued at $26.6 million, SCDOA’s November 2016 appraisal indicated the Port of Port Royal was actually worth just shy of $7 million – roughly one-fourth the value of the SCSPA’s original estimate.
Why did the SCSPA inflate the value of the property? According to our sources, port officials may have wanted to keep this grossly inflated asset on the agency’s books so they could improve their bonding capacity – a.k.a. their ability to borrow money for capital projects like this one.
That’s disappointing. And, if true, dishonest. It’s also yet another reminder of what happens when government gets involved in spheres where it has absolutely no business – like the management of port infrastructure assets.
We’ve said all along that the public has a compelling interest in the ownership of such infrastructure assets. But at this point, it is abundantly clear that politicians and their appointees have absolutely no business whatsoever trying to manage these assets.
Seriously … just look at the results. Or the latest political drama at the SCSPA, which currently finds itself neck deep in the corruption scandal involving the neo-Confederate political empire of embattled “Republican” consultant Richard Quinn.
We’ve said it before, we’ll say it again: It is past time lawmakers removed the politics from port management and privatized this function.
Oh, we would also advise anyone lending money to the SCSPA to take a good hard look at its financials. Some of its assets may not be worth what the agency is saying they are.
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