The Federal Aviation Administration will investigate the disputed sale of campground land between South Kings Highway and the Atlantic Ocean, known to tourists and residents as the Pirateland Camping Resort and the Lakewood Camping Resort, according to Horry County officials.
Horry County attorneys requested the FAA intervene in the case because they say the federal government has a say over what happens with the 145 acres of campground in question. County attorneys, in a filing, have asked the FAA to assess what legal rules and past agreements the land is subject to, and advise on how the sale should proceed.
Because the FAA has agreed to investigate the matter, county attorneys dropped a previous case in South Carolina state court, where they tried to prevent the City of Myrtle Beach from selling the land.
Late last year, Myrtle Beach leaders announced they intended to sell the land to the two campgrounds currently using it and use the proceeds for city business. Horry County leaders disputed that move, and argued the city owes any proceeds from the sale to the airport.
Myrtle Beach spokesperson Mark Kruea said the city had no comment in response to the news of the FAA agreeing to investigate.
An arrangement for the land currently requires proceeds from the property to support airport functions at the Myrtle Beach International Airport. Because Myrtle Beach rents the land to the two campgrounds, that means Horry County receives about $2.7 million annually to help fund the airport, which funnels hundreds of thousands of tourists to and from the Grand Strand each year.
Horry County and Myrtle Beach began clashing over the land last year when the city announced it intended to sell the land and keep the proceeds. County attorneys contend that money belongs to the airport.
But the dispute over the property used for popular tourist destinations dates back to World War II, and involves stipulations the federal government has made for the land. The government can still take control of the land, even though Myrtle Beach currently holds the title to the property.
The dispute also comes as Horry County and Myrtle Beach emerge from the COVID-19 pandemic and assess their respective financial positions. Both have experienced significant revenue losses, so both are currently working to recover.
Horry County officials said at a Thursday budget hearing that the county is in a better-than-expected financial position post-pandemic, but is still working to recover losses. A loss of revenue to the airport would complicate those efforts.
Johnny Gardner, the Horry County Council chairman, said Thursday that the money from renting the campground property — or even selling the property — needs to stay with the airport.
“That airport benefits Horry County, but guess who it benefits the most? Myrtle Beach, because it’s right there, that’s where the tourism is,” he said. “If I was trying to do something with that money I would want it to go to the airport. That’s tourism, that’s the economic engine that drives everything here. Why would you want to take away from that?”
A long history of disputes
As World War II was entering its final stages, the federal government sought to offload land and other property it did not need, doing so through the Surplus Property Act in 1944. Several years later, in 1948, the City of Myrtle Beach acquired the campgrounds — known as the Seascape Properties — through the act. The property was formerly used by the military as part of a U.S. Army air base.
When the federal government granted the city the land, it included a requirement that the land be used for a public airport. The city later decided not to build an airport on the land, and the federal government agreed that it could be used for other purposes, provided that revenue from the property be used to support a public airport.
The county eventually took over the Myrtle Beach International Airport in the late 1970s, and the city and county clashed over the campground property throughout the 1980s. In 1990, Myrtle Beach began leasing the land to the two campground operators who use it today.
By 1995, Myrtle Beach established the Airport Trust Fund, meant to hold the revenue generated from its leasing of campgrounds. Horry County soon disputed how the city was spending the money in that trust fund, asking the State Law Enforcement Division (SLED) to investigate in 2001. SLED found no wrongdoing in its review.
By 2004, Myrtle Beach and Horry County agreed to settle their back-and-forth disputes about the property and devised a revenue sharing scheme. Under that agreement, Horry County receives 75% of the revenue generated from the properties, and Myrtle Beach receives 25%.
The most recent battle
But then Myrtle Beach said it wanted to sell the property.
Late last year, Myrtle Beach City Council voted to sell the land to the two campground operators at a reduced price and said they intended to use the money for city purposes. The land was appraised at $76.2 million but the city agreed to sell it for $60 million.
That sale would mean a loss of $2.7 million per year to the airport. When the city announced the sale, county leaders were incensed.
“They have to live within their d--- budget,” County Council member Gary Loftus said in December. “Why we have so darn many airlines coming in here is our landing fees are reasonable, in addition to tourists and so forth, we have reasonable landing fees. What do they want us to do? How are we going to absorb $2.5 to $3 million dollars in airport operations? Are they going to pay for that? If they want to pay it, we don’t care.”
A county attorney said Thursday that the city’s announcement in December didn’t give the county enough time to involve the FAA, so the county filed a lawsuit in state court instead.
In January, S.C. Circuit Court Judge Benjamin Culbertson ruled against an injunction the county had asked for, and said the city could move forward with the land sale. In his opinion, Culbertson chided the county for trying to stop the sale.
“This case is not about property. The county does not access, use, or possess the Seascape Properties,” Culbertson wrote. “Instead, this case is really all about who gets how much money — be it lease proceeds or sale proceeds from the Seascape Properties.”
Culbertson cited the 2004 agreement between the city and county in his opinion, saying that agreement superseded all past agreements involving the land, and that because that agreement didn’t require Myrtle Beach to share sale proceeds with the county, the county couldn’t stop the sale.
“The City has no obligation to pay the County any portion of the sale proceeds under the 2004 Agreement,” Culbertson wrote. “Any lingering obligation to use future proceeds from the Seascape Properties for airport purposes ... was extinguished with the County’s consent and agreement in 2004. The County cannot change its mind 16 years later.”
County attorneys disagree, and believe that federal law stipulates how revenue from the sale is used, not the 2004 agreement.
Since Culbertson’s ruling, the FAA has agreed to take up the matter for the county, and the county has dropped its case in state court.
County attorneys expect the FAA to rule in their favor, and direct Myrtle Beach to put the revenue from the sale toward the airport, in part because the FAA has sided with the county in the past.
Myrtle Beach will have a chance to make its case before the FAA.
“The Seascape Properties, it’s clear in my mind that...the revenue generated from the property was intended for the airport from its very conception,” Gardner said. “And that’s where it needs to go. If it’s going to be sold, if we can’t stop it from being sold, then we can’t stop it. But the proceeds need to go to the airport.”