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The Beaufort City Council is backing away from a proposal to borrow almost twice as much as needed to purchase the $1.85 million Beaufort Commerce Park.
"Buying the commerce park is a bold move," Mayor Billy Keyserling said. "But borrowing money because it's cheap is not a smart move.''
The council discussed selling bonds to finance the purchase Tuesday, a week after finance director Kathy Todd suggested the city borrow $2.5 million to $3.5 million to buy the 209-acre park from S.C. Bank & Trust. She said interest rates are low and noted that the council had discussed completing other unspecified capital projects, potentially without raising taxes.
The council approved the purchase of the 167-acre park on April 3, and the city has 60 days from then to close the purchase. The property also was annexed into the city, which wants to use it to attract large businesses to create jobs.
Council members discussed the options and directed staff and the city's bond attorney to look into them, but did not take action Tuesday.
Councilman Mike Sutton, at first receptive to the idea, said Wednesday he would support issuing bonds for only $1.85 million.
"I'd love to have the $3 million, but there's costs that go along with that," he said.
The city has $1.033 million in a land-acquisition fund to put toward the purchase price, but Todd suggested the council hold onto the money. Keyserling said it could be used for debt payments and serve as a cushion if businesses do not buy land in the park.
If it issued $1.85 million in bonds, the city would pay about $219,000 annually for 10 years, city manager Scott Dadson estimated. Todd previously estimated payments on $2.5 million would be $293,000 a year over 10 years, and $3.5 million would cost $410,307 annually.
Keyserling, who was not present for Todd's presentation, said he heard from residents concerned about the plan to borrow more than the price of the park.
"We don't want to confuse anybody by borrowing more money just because it was cheap," he said.