Lawmakers decide rail ownership, direct SPA to sell Daniel Island property

By Molly Parker
mparker@scbiznews.com
Published May 14, 2009

As lawmakers scramble to wrap up the current session, state senators sent the governor a massive state budget bill Wednesday that also transfers property rights of a controversial railroad line in North Charleston to a division of the S.C. Department of Commerce.

And in the House, lawmakers overwhelmingly gave key approval to a bill that would have far-reaching financial and governing implications on the S.C. State Ports Authority, forcing the agency to sell its valuable Daniel Island property by 2012, among other things.

Budget bill bequeaths railroad
The exchange of railroad ownership to Commerce from the Charleston Naval Complex Redevelopment Authority — the state entity created to divvy out the land when the Navy base closed — is called for in a one-paragraph amendment tucked inside the budget bill that stretches on for hundreds of pages.

The redevelopment authority is currently in a legal battle with the Noisette Co. over who has rights to the track and the land underneath it.

Noting it is a “very big budget bill,” Gov. Mark Sanford’s spokesman, Joel Sawyer, said the office is “not ready to weigh in on specific provisos yet.” The budget bill requires Sanford’s signature to become law.

Sanford has already promised swift veto action on budget items related to federal stimulus money, but he has yet to weigh in on this explosive regional debate about providing dual rail access to the Port of Charleston’s customers.

Commerce wants the rail line so that S.C. Public Railways has the option of operating an intermodal facility on the former Navy base property and running a rail line through the northern end of the former base — something Mayor Keith Summey opposes and promises to fight in the courts. S.C. Public Railways also says ownership is necessary because it uses the line currently to serve customers on the former base.

“Access from the north exists today,” said Jeff McWhorter, president of S.C. Public Railways. “This just provides ownership of the rail line to S.C. Public Railways of a line we’ve been operating on since the mid-’90s.”

North Charleston officials did not immediately return a call seeking comment.

Sen. Larry Grooms, R-Bonneau, sponsored the amendment. He said previously that the purpose is to preserve the state’s right to run rail out of the north, in case a compromise cannot be brokered allowing Norfolk Southern and CSX equitable access via rail lines to the south of the SPA’s new container terminal.

Meanwhile, lawmakers in the House voted 103-4 Wednesday to move a bill to the Senate that restructures the S.C. State Ports Authority board and mandates the SPA to sell property where it is not operating a terminal, among other things. As it stands, the bill is a drastic departure from the original version sponsored by Grooms, and passed earlier in the session by the Senate. The upper chamber would still be required to sign off on it before it moves to the governor.

The deadline was extended for passage of this bill beyond next week’s scheduled adjournment.

Among the key tenants in S. 351:

• Orders the S.C. State Ports Authority to have its Daniel Island property under contract by 2011 and to close a deal by 2012.
• Deeds the Daniel Island land to the state’s Conservation Land Bank or to Berkeley County — there are conflicting amendments — if the agency cannot sell the property by that year. The SPA owns 1,300 acres there where it had planned to build the Global Gateway terminal.
• Mandates that the SPA sell the now-defunct Port of Port Royal land in Beaufort County by December 2010.
• Requires the port to pay $800,000, or 10% of proceeds, whichever is greater, from the sale of the Port of Port Royal property for the construction of a public boat ramp on the northern end of Broad River in Beaufort County.
• Says that members of the General Assembly can require the SPA staff to turn over confidential materials related to the negotiation and sale of these properties and forbids lawmakers from sharing the information with the public.
• Sets the terms of all current board members to expire Jan. 15, 2011, though nothing prohibits the reappointment of a sitting member. A new governor will be in place by then and would have the authority to clear the entire board.
• Requires the governor to appoint one member to the board from each of six congressional districts, plus one at-large member.
• Establishes that the secretary of commerce and the secretary of transportation serve on the board as ex officio members.

The railroad amendment in the budget bill says:
“Any, track, spur, switch, terminal, terminal facility, road bed, right of way, bridge, station, railroad car, locomotive or other vehicle constructed for operation over railroad tracks … and all associated structures and equipment that was necessary for the operation of any railroad located on an applicable federal military installation … shall be transferred, and immediately vest, in fee simple absolute, to the Department of Commerce, in the Division of Public Railways.”