SOUTHPORT — A proposed land deal at Southport’s former waste treatment plant split the city’s Board of Aldermen Saturday.
The real estate deal includes the potential for a public water access point to Cottage Creek. Southport Marina and the City of Southport are working out an offer to sell the city’s land that has not yet been finalized.
Related: Residents oppose public-private partnership over rebuilding Southport’s city dock
At the board’s annual retreat, a resolution to consider the offer passed 4-3. The offer must undergo a 10-day upset period — starting Friday — before the city votes to finalize the agreement.
The deal
Southport’s 2.5-acre parcel, zoned in the highway commercial district, hasn’t been used since 2011. That’s when the city’s former waste treatment plant was decommissioned and Southport joined Brunswick County’s West Brunswick Regional Wastewater Partnership.
Since then, the tax-exempt property has not generated revenue. Its neighbor, Southport Marina, is offering to purchase the land at 901 W. West Street for $650,000.
In 2017, the property was commercially appraised at $450,000, as is, according to Southport’s manager. (Brunswick County’s tax value shows the land dropped in value in 2015, from $1.2 million the year prior to $777,730.)
Leftover waste treatment equipment still sits on site and would cost over $350,000 to demolish and manage environmental cleanup costs, according to the appraisal cited by Southport’s manager. Southport Marina’s offer includes taking on demolition costs itself.
So, according to the city’s manager Bruce Oakley, Southport’s getting a deal. “What they’re planning to do there, would be good for the city financially,” Oakley said.
At 2.5-acres total, only 1.38 acres are actually usable because of the site’s wetlands, Oakley said. In the offer, Southport Marina offered to give the city 0.11 acres to keep as open space or build public facilities. In addition to the 0.11-acre easement, the marina has also offered a 10-foot easement on the north side of the same lot, with access to Cottage Creek. A skiff could likely navigate the winding creek at high tide, Oakley said.
The 10-foot easement could be turned into a kayak launch, Oakley said. At a maximum of $25,000, Southport Marina has offered to pay 50 percent of the total cost of the city’s future use of the 10-foot easement.
Revenue generator
Southport Marina’s general manager, Thad Moore, said the long-running marina hopes to give something back to the city’s residents with the proposal.
“We have a lot of expenses to go to make this property part of our business model,” Moore said. “We wanted to give the city a fair offer.”
If the offer is approved, Moore said the marina would use the land to expand its dry storage operations. Moore estimates the property, once developed for Southport Marina’s uses, would generate between $40,000 and $60,000 in annual tax revenue for the city.
“So that’s a huge benefit to turn the piece of land into something that’s providing consistent revenue to the city,” he said.
This offer comes months after the marina pulled out of a proposed private-public partnership. In the fall, Southport Marina backed out of plans to help finance the city’s public dock rebuilding project. Southport’s public dock was damaged during Hurricane Mathew in 2016. But the city couldn’t rebuild and expand the dock without partnering with the marina, Oakley said.
“Anything that we would do to expand would have violated their riparian rights,” he said. “Only way we could do it was with their partnership.”
In that failed agreement, the marina would have functioned as a lender. It agreed to pay $256,000 to rebuild the city dock, which the city would have paid back over time with interest. The marina agreed to manage the dock and collect boat slip fees, to be later split with the city once the loan was paid back.
The project generated public outcry. Oakley said most of the opposition concerned changing the character of the yacht basin. “They decided that they were ready pull out,” he said about the marina’s fall 2018 decision.
Part of Oakley’s reasoning for pursuing public-private deals is Southport’s financial health. Since Hurricane Florence, the city’s fund balance is hurting, Oakley said. With an unknown timeline on state and federal reimbursements, he said the deal could help.
“This would help in the meantime until we’re reimbursed to provide some cushion in our fund balance,” he said.
Split board, limited public comment
Saturday was the first time the land deal was introduced as an actual agenda item. Though it had been discussed at December’s regular board meeting, Oakley said some people took issue with the perceived lack of public input.
The retreat offered a limited public comment period, he said.
Aldermen Robert Tucker, Lora Sharkey, James Powell and Mayor Jerry Dove voted in favor of the resolution to consider the offer. Aldermen Karen Mosteller, Marc Spencer and Rick Pukenas turned down the offer, creating a 4-3 split. Inquiries to Mosteller, who opposed the project altogether, were not immediately returned.
Oakley said Pukenas voiced the need for more public input, Spencer hoped to postpone the discussion further and that Mosteller said the city was giving away an asset. Many residents were also under the impression the site could be turned into a public park.
But Oakley said selling the site would get rid of a depreciating asset. “It’s one less liability in disrepair,” he said.
After the upset period, if no offers meet or exceed $682,500 — a five percent increase — the city must vote again to finalize the agreement. According to a public notice of the offer provided by Southport’s clerk, upset offers will be accepted until 5 p.m. on Feb. 18.
“Personally, I think its great. I think it’s a win-win,” Oakley said. “We get this property cleaned up.”
Oakley assumes there will be a special hearing to finalize the agreement. Though the topic is not slated to appear on the boards’ upcoming Feb. 14 regular meeting, he said it will likely come up during the public comment period.
“I think these board members were elected to make these decisions,” Oakley said. “This is one that was to me, I thought they were completely in the right.”
As for Southport Marina, Moore hopes the deal will go through. “We didn’t want controversy on this,” he said. “We wanted this to be a fair deal on both sides.”
Southport’s upcoming Feb. 14 meeting will be held at the Southport Community Building at 6 p.m.
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