In October 2012, the City of Beaufort spent $2.5 million of taxpayers’ money (in today’s dollars) to purchase approximately 209 acres of land, naming it the City Commerce Park. Billy Keyserling, Beaufort’s mayor at the time, was the main proponent of the purchase, asserting that the commerce park would help create “well-paying” jobs for the city. However, since its acquisition, the park has largely languished with little to no activity and no creation of well-paying jobs.
The property, located beyond Laurel Bay and west of the Marine Corps Air Station, is in an area not commonly associated with city property. The city purchased this land from what is now South State Bank, which had foreclosed on the property’s former owner, the Beaufort-Hilton Head Economic Development Partnership, Inc. This partnership went bankrupt while trying to develop the commerce park.
Since 2012, the city has invested an additional $340,000 in infrastructure improvements and hundreds of thousands more in maintenance and upkeep, bringing the total taxpayer cost to over $3 million. To put this in perspective, $3 million amounts to almost one-third of the city’s property tax levy per year.
For its $3 million investment, the City of Beaufort has sold only two parcels totaling 11 acres for $165,000. The investment return over 12 years represents a mere 0.45% per annum. In contrast, a no-risk government bond fund currently yields 4.5% per annum, and the cumulative return for the S&P 500, with dividends reinvested since October 2012, would have yielded a 364% return, growing a hypothetical $3 million into $10.9 million—20% more than the city’s total property tax levy.
Currently, the city has 24 parcels for sale at the commerce park. It has also engaged the Beaufort County Economic Development Corporation (BCEDC)—the 2017 reconstitution of the bankrupt Beaufort-Hilton Head Economic Development Partnership, Inc.—to help resolve this investment debacle. To date, the BCEDC has allocated almost $2 million of additional taxpayer money to achieve the sale of 8 total acres for a contracted value of $120,000.
This costly venture raises questions about the management and foresight of city investments, especially in terms of generating expected returns and providing value to the taxpayers of Beaufort.
Beaufort Insider will continue to report on the Beaufort Commerce Park.
