Patriots Point has been given approval by State lawmakers on a plan to go ahead with a major land deal to help pay off $8.2 million owed the state for repairs to the destroyer ship Laffey. Patriot’s Point failed to repay the loan in 2015 when the ship-repair loan was due, and has been facing warnings from auditors about its viability to continue to exist ever since that time. Patriots Point borrowed $9.2 million from the state in 2009 for emergency hull repairs to the Laffey. It has since paid only $1 million back to the state, and consequently lawmakers have been pressuring the state-owned naval maritime museum to establish a formal repayment schedule.
In June, Patriots Point requested that the South Carolina Joint Bond Review Committee allow it to lease about 61 acres of waterfront land in Mount Pleasant to private developer Bennett Hospitality. The committee, led by chair Hugh Leatherman, R-Florence, made repayment of the $8.2 million balance by 2028 a condition of approval of the leasing agreement with the developer. The long term lease is expected to generate $3 million a year in rental income for Patriot’s Point, and will help the naval museum to maintain its aging ships and invest in other attractions.
The developer has plans to complete the first phase of the development by 2021. The developer has outlined plans in the lease agreement to build three hotels with a total of 500 rooms, four office buildings with 135,000 square feet each, three retail spaces with 45,000 square feet for stores, two apartments each with 65 units, three parking garages each with 500 spaces and an amphitheater. Most of the land-based museums and attractions, such as the Vietnam War Experience, offices and parking for Patriots Point would be relocated.
Patriots Point will pay interest only on the debt for the first three years until the rental income starts coming in. In the event of a default, the state legislators and Patriots Point board of directors agreed that lenders will take over the project or the land will revert back to Patriots Point.
Source: Post & Courier, “State panel OKs Patriots Point plan to repay ship-repair loan,” August 15, 2017
Caldwell Commercial keeps abreast of global and local economic trends to best serve the needs of our clients. Contact us today at caldwellcommercial.com to learn more about our commercial real estate properties and services.