MYRTLE BEACH, S.C. - Santee Cooper wants to promise public money to a North Carolina firm so land can be sold at the former Myrtle Beach Air Force Base.
The state-owned utility and economic developer took over base land after failed developer Timberland Properties Inc. failed to build a $500 million theme park and golf resort at the site and declared bank.
But Santee Cooper also inherited a $850,000 loan from TPI when it reclaimed 422 acres of base land in May. Raleigh, N.C.-based High Point Capital, the venture capital firm that gave TPI the loan, says Santee Cooper should have to pay the loan since the utility now owns the land.
Santee Cooper claims it isn't responsible for the loan, because its contract with TPI prohibited any debts against the base property.
A court case to decide the matter is pending. But High Point Capital has filed a second mortgage against the land, making it difficult for Santee Cooper to sell the property.
So Santee Cooper filed court papers this week asking permission to substitute cash or a letter of credit for the land as collateral for the loan while the court case is pending.
If Santee Cooper loses the court case, the money would go to High Point Capital. If Santee Cooper wins, it gets the money back. Meanwhile, Santee Cooper would be free to sell the land.
Another $125,000 claim was filed against the property by a Conway engineering firm that TPI owes, but Santee Cooper doesn't have to go to court to post a bond to clear that debt.
High Point Capital also has filed a claim against the estate of Gene Lawrimore, TPI's attorney who died of cancer in April. High Point Capital claims it gave TPI the $850,000 based on Lawrimore's legal opinion that the loan wouldn't violate the company's contract with Santee Cooper.
TPI President Robert Blackburn, who signed for the High Point Capital loan, did not return telephone calls to his Murrells Inlet home this week.
State Attorney General Charlie Condon is investigating the deal between Santee Cooper and TPI, officials said Friday. Solicitor Ralph Wilson also is investigating allegations that TPI executives defrauded investors who lost more than $5 million in the venture.
In its June bankruptcy filing, TPI claimed just $28,000 in assets and more than $7.3 million in unpaid bills. The bankruptcy left more than 100 stockholders and other creditors out of more than $7.5 million.
TPI President Robert Blackburn and Meehan paid themselves salaries of more than $200,000 a year. The only assets TPI claimed was about $28,000 in office furniture.
Former Gov. Carroll Campbell had given the company first rights to developing about 1,000 acres of public land there.