Ports Authority Chairman Could Receive About $7 Million for Farmers Market Property

June 21, 2013

Investigative Reports

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SC State Farmers MarketIf Gov. Nikki Haley agrees, the S.C. Department of Agriculture could purchase State Farmers Market property owned by state Ports Authority Chairman Bill Stern for about $7 million.

House and Senate negotiators on next fiscal year’s state budget allocated $7.06 million to the Department of Agriculture (SCDA) from the Capital Reserve Fund – a “rainy-day” fund typically raided by lawmakers – to purchase two of Stern’s parcels at the Lexington County market along Charleston Highway.

But any purchase would come with oversight from the state Attorney General’s Office, Joint Bond Review Committee (JRBC) and the Budget and Control Board (BCB), Rep. Gary Simrill, R-York, told The Nerve Wednesday.

The House and Senate on Wednesday approved a budget conference committee report for the 2013-14 state budget, which would total nearly $24.3 billion if $1.5 billion in “off-budget” federal food-stamp assistance payments, which the state Department of Social Services for the first time is not counting as part of the state budget, is included, as The Nerve previously reported. The total budget, made up of state, federal and “other” funds, includes more than $112 million in appropriations from the Capital Reserve Fund.

The new fiscal year starts July 1.

Stern did not return multiple calls this week from The Nerve seeking comment about his Farmers Market property. Last year, he told The Nerve that the SCDA’s proposal to purchase his parcels was more of an inquiry, not a finalized deal.

Under questioning Wednesday from House members about details of the House-Senate budget agreement, Simrill, who was one of the House budget conferees, said he maintained contact with Haley about the $7.06 million for the Farmers Market, with a focus on purchasing Lot 25 and the front gate house, both of which are owned by Stern.

Simrill said the proposed amount for Stern’s property was acceptable to Haley.

Haley spokesman Rob Godfrey did not respond to an email from The Nerve Thursday seeking confirmation of that. Haley has until Tuesday to make line-item vetoes to the budget; lawmakers plan to return to Columbia next week to override or sustain any vetoes.

The Nerve last year first reported that the S.C. Senate slipped in an additional $16.3 million in its version of this fiscal year’s state budget for an unspecified expansion project at the market. The Nerve later detailed state Agriculture Commissioner Hugh Weathers’ plan to spend millions in tax dollars to buy market property owned Stern.

Weathers did not make public Stern’s connection to the market until after The Nerve’s initial story. The proposed $16.3 million appropriation was later dropped.

Simrill said Lot 25 and the front gate house are key revenue generators for the Farmers Market, which is a public-private partnership, though he added some restrictions on Lot 25 hurt its profitability. The market has been running an annual shortfall of $300,000; lawmakers allocated $300,000 in the fiscal 2014 budget to cover that expected deficit, Simrill said.

“Let the Farmers Market work for the state, instead of against it,” Simrill said under questioning on the House floor Wednesday from Rep. Ralph Norman, R-York, who has been the chief critic of the market expansion plan.

The House made Lot 25 a priority in its budget recommendation in March, though in an unusual move, allocated $3 million for the Attorney General’s Office to negotiate the purchase of market property on behalf of the SCDA, as The Nerve reported. Meanwhile, the Senate allocated nearly $9.9 million to the Farmers Market before lawmakers compromised on $7.06 million.

Weathers earlier this year revealed that a second appraisal put the total value of property in the proposed expansion project at $14.4 million – $1.3 million less than the initial appraisal, though it was unclear whether both reviews covered the same area.

Lot 25, which is about 10 acres and appraised at more than $6 million, has a wholesale-vendor building and sheds with in-state and out-of-state vendors located there. The front gate house, which is appraised at $990,000, is where truckers pay fees to haul their produce primarily to the wholesale vendors in the market.

Simrill told colleagues Wednesday that House conferees insisted on budget proviso 44.12, which requires:

  • The SCDA, while negotiating the purchase of any property located at the Farmers Market, to work with the Attorney General’s Office to ensure that no new property acquisition will restrict the agency from selling products on any property SCDA owns;
  • The SCDA to provide copies of any recorded changes to the original Farmers Market development agreement, or the conditions and restrictions for the wholesalers section, to Senate Finance Committee Chairman Hugh Leatherman, R-Florence, and House Ways and Means Committee Chairman Brian White, R-Anderson; and
  • Any contract to acquire property at the Farmers Market is subject to approval of the JBRC and the BCB.

“Let’s have more expert eyes on it,” Simrill told The Nerve. “The AG is our chief legal officer.”

“Everybody wants the state to have a more favorable situation (to make a profit),” Aaron Wood, SCDA’s assistant commissioner for agency operations, told The Nerve when contacted Thursday.

Wood also said the SCDA has spent no money on Lot 25 or the front gate house in the past year “because we don’t own it.”

No one has accused either Stern or Weathers, who made the initial proposal to buy Stern’s property, of doing anything illegal.

But questions surrounding the plan that emerged one year ago compelled several lawmakers to request another audit of the SCDA’s handling of the relocation of the Farmers Market – this time to include a proposal to pay Stern for property he owns there, The Nerve reported last year.

Besides Norman and Simrill, those requesting the audit were Sen. Wes Hayes, R-York, and Reps.  Deborah Long, R-Lancaster; Dennis Moss, R-Cherokee; and Tommy Pope, R-York. Generally under state law, it takes five lawmakers to request that the Legislative Audit Council, the General Assembly’s investigative arm, conduct an audit.

Norman told The Nerve Wednesday that audit is not done, and he is uncertain how much good it will be at this point if Haley signs off on the expansion plan.

Norman also said the $7 million would be better spent on the purchase of more than 100 school buses rather than on property owned by one person.

“The taxpayers deserve better than this,” he said.  “I hate to see something like this happen.”

Olson can be reached at (803) 254-4411 or curt@thenerve.org. Follow him on Twitter @thenerve_curt and @olson_curt. Follow The Nerve on Facebook and on Twitter @thenervesc.