S.C. tourism agency worked secretly for months to buy Ted Turner’s island

April 5, 2018

Investigative Reports

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By RICK BRUNDRETT

South Carolina’s tourism department for months kept secret from the public its plans to buy an island owned by billionaire Ted Turner for what the agency director touts will be a “premium experience” for tourists.

Beaufort County and school district officials joined in the secrecy surrounding the taxpayer-funded, approximately $5 million purchase of the 4,680-acre St. Phillips Island – owned for decades by the media mogul Turner and located along the county’s Atlantic coast, about a 15-minute boat ride from Hunting Island State Park.

In written responses  to The Nerve, Duane Parrish, director of the S.C. Department of Parks, Recreation and Tourism, said the agency initially plans to rent out, either on a yearly or seasonal basis, the six-bedroom, four-bathroom house used by Turner and a smaller caretaker’s house. He said PRT also will offer boat rides to the island – which consists mostly of marsh – for guided tours.

Parrish said he believes the boat-only accessibility is what, in part, “makes this island and its visitor experience special.”

In a December press release, PRT, which operates 47 state parks, described the purchase as “one of the most important conservation transactions in state history.” Parrish told The Nerve that the main reason for the purchase was to give PRT the “opportunity to bring public access to a largely pristine private island at an extremely discounted price.”

Many questions remain unanswered, however, including specifics about the short- and long-term costs of operating and maintaining the island, and how affordable it will be for typical tourists – questions that PRT for at least five months didn’t allow the public to ask as it was negotiating in secret.

A Turner representative told The Nerve on Monday that holding public hearings beforehand likely would not have killed the deal, which, according to Parrish, included a $4.9 million base price for the island, plus about $35,000 in closing costs paid by PRT.

Turner has publicly said he was “thrilled” to sell the island to the state, saying in a PRT press release issued four days before Christmas that he and his family “now look forward to others being able to experience and appreciate the unique beauty and tranquility that St. Phillips has provided us for many years.”

State records show that Turner wanted to sell the island by the end of last year to take advantage of a federal tax deduction.

Parrish defended his agency’s handling of the island purchase – the type of secret negotiations typically done when the state provides taxpayer-backed incentives to companies locating in South Carolina.

“There were public hearings in advance of the purchase of St. Phillips,” Parrish said in an email response last week to The Nerve when asked why no hearings were held, noting the matter was on the agendas of the Dec. 5 meeting of the state Joint Bond Review Committee (JBRC) and the Dec. 12 meeting of the State Fiscal Accountability Authority (SFAA).

But there was no citizen input on the proposed purchase at either of those meetings, held during regular business hours in separate buildings on the State House grounds in Columbia, minutes and video of the meetings show. Typically, citizens are not invited to speak at JBRC or SFAA meetings.

The JBRC – a 10-member legislative panel chaired by Senate president pro tempore Hugh Leatherman, R-Florence – and the SFAA  – a five-member, quasi-legislative, quasi-executive panel that includes Leatherman and is chaired by Republican Gov. Henry McMaster – each approved the island purchase, records show.

Under state law, the governor appoints the PRT director, who serves on the governor’s Cabinet.

Parrish said Turner representatives initially “reached out to SCPRT in late spring 2017” about buying the island, noting that it was “not a priority acquisition identified” by the agency. But state officials released no details publicly until Nov. 30 when the agenda of the Dec. 5 JBRC meeting was posted on the Legislature’s website.

The online link to the JBRC isn’t readily apparent on the Legislature’s home page. And the island-purchase request was buried on pages 91 and 92 of the 94-page agenda package.

Other secret discussions

PRT wasn’t the only government agency that kept details of the island purchase secret from the public.

The Beaufort County Council at its Nov. 13 meeting authorized interim county administrator Josh Gruber to “provide correspondence” to PRT “indicating that the County had no objection to the purchase of certain real property located within the County,” according to meeting minutes, though no details of the purchase were publicly released then.

In an email Monday to The Nerve, Gruber said the matter was discussed then by council members in a closed session “because of the nature of the negotiations that were occurring and the additional public approvals that were necessary to move forward with the purchase.”

Gruber said PRT first notified him about the proposed sale “two to three weeks” before the November council meeting.

“There were no discussions of conducting public hearings on the matter,” Gruber said, though he added that the county council was “very supportive of this project because of our existing mutually beneficial relationship with Hunting Island State Park and the extension of that Park that was created through this purchase.”

Jim Foster, spokesman for the Beaufort County School District, said Tuesday the school board unanimously approved the proposed deal at its Nov. 28 meeting. Meeting minutes show that the board agreed in open session to allow PRT to “proceed with its acquisition of the Beaufort County real property discussed in executive (closed) session for the purpose, in part, of creating additional recreational and educational opportunities for Beaufort County students.”

No details of the proposed purchase were publicly revealed during that meeting, according to meeting minutes. Foster in his email response said county officials first contacted the school district about the matter in mid-November, and that the district’s attorney exchanged several phone calls and emails with Parrish from Nov. 20-29.

Asked about the district’s position on the purchase, Foster said students will “now have research and field-trip opportunities that would not have been possible if the island had been sold to private interests.”

‘Bargain sale’

Parrish said the $4.9 million purchase price was about one-third of the appraised value of the island, which had been listed for sale through Plantation Services Inc., a real estate and land management company with offices in Georgia and Charleston, for about $23.8 million.

Asked why Turner, who bought the island in 1979, agreed to sell it to PRT at a large discounted price, Parrish referred The Nerve to a Turner Enterprises Inc. official in Atlanta.

In an email response Monday to that question, company spokesman Phillip Evans said, “Mr. Turner and his family decided to charitably transfer the island via a bargain sale as a way of giving back to the state of South Carolina”

Turner needed to complete the sale by Dec. 31 to “take advantage of (a) charitable contribution income tax deduction” allowed under federal law, according to JBRC records.

Evans said before last year, Turner had not approached the state or any local government agency about buying his island.

Asked whether Turner believed that the purchase would have been jeopardized had PRT held public hearings before the December meetings of the JBRC and SFAA, Evans in his email replied simply, “No.”

Funds for the purchase, according to Parrish, came from three sources:

  • $2.8 million in carryover funds from the Recreation Land Trust Fund, a state grant program for park land purchases that was discontinued in the Great Recession;
  • $1.4 million in carryover general funds from the previous fiscal year.; and
  • $700,000 from the Parks and Recreation Development Fund, which is allocated to state parks annually through a formula set by the Legislature.

PRT was flush with money going into this fiscal year, which started July 1: State comptroller general records show the agency carried over more than $30 million in general funds from last fiscal year.

A ‘premium experience’

Parrish said St. Phillips Island will not be a stand-alone state park, but rather will be part of Hunting Island State Park, which typically draws more than 1 million visitors annually.

“More specifically, St. Phillips Island will be a premium experience available to visitors to Hunting Island State Park,” he said.

Once the island is “fully operational,” PRT estimates annual visitation of “at least 10,000,” Parrish said.

Hunting Island has been hit hard in recent years by erosion, though Parrish told The Nerve, “SCPRT does not anticipate that St. Phillips Island will experience the same type of beach erosion conditions experienced by Hunting Island.”

St. Phillips Island consists of about 2,880 acres of tidal marsh, over 1,000 acres of upland, 590 acres of interior marsh and 70 acres of beach, according to JBRC records.

It features an approximately 5,000-square-foot main house used by Turner and his family, and a 2,400-square-foot “caretaker’s” house, JBRC records show. Parrish said both houses will “require some cosmetic updates and furnishings before they can be rented,” and that the agency also will “need to update” the island’s water and electrical systems.

Under an existing conservation easement with The Nature Conservancy, 10 more “residential dwellings” could be built on the island, according to the prior sales listing with Plantation Services Inc. Parrish said PRT estimates that the rental of “nine additional structures,” which have yet to be constructed and would be rented out on a weekly basis, would generate between $500,000 and $1.5 million in revenue after operating expenses.

Annual operating expenses are expected to run $250,000 to $300,000 in the first three years, which would be paid from “revenues generated on the property,” according to JBRC records.

Hunting Island already has a dock that can “service boat trips to St. Phillips,” Parrish said. The agency acquired three boats with the purchase of the island – two pleasure boats, 22 feet and 28 feet; and an approximately 80-foot former military personnel carrier that “essentially serves as a barge for vehicle and equipment transportation,” he said.

Parrish said PRT plans to offer guided tours of the island, adding the agency has been “approached by several concessionaire companies that have expressed interest in operating ferry services to and from St. Phillips.”

“Once SCPRT is able to generate revenue from both day visits and overnight accommodations, the agency anticipates that St. Phillips Island will generate sufficient revenue to not only pay for itself, but also provide revenue funds for Hunting Island State Park and other parks in the State Parks system as we continue to keep State Parks operationally self-sufficient,” he said.

Whether S.C. taxpayers ultimately will be on the financial hook for the newly acquired island remains to be seen, however.

Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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