The wealthy family that once owned most of Bald Head Island announced a $67.7 million deal Tuesday to sell nearly all of its remaining island holdings, including the ferry system that represents the only way to and from the island.
The ferry and other property will go to a Raleigh private equity firm, likely putting an end to the state’s languishing bid to buy and run the ferry system itself. That effort ran aground last year after State Auditor Beth Wood questioned appraisals tied to the deal, blocking financing.
Deal supporters warned at the time that ferry users might see higher prices if a private company bought the boats instead.
The buyer, SharpVue Capital, said in a statement that it recognizes “the responsibility of operating critical infrastructure in a safe, reliable and cost-effective manner.” It promised to keep employees and current management in place, and to continue a “legacy of stewardship and high-quality service.”
Much of the island was once owned by billionaire George Mitchell, a pioneer in oil fracking. Mitchell’s heirs began divesting after his death in 2013 and will now sell “substantially all” of their remaining holdings to SharpVue, according to a new release from Bald Head Island Ltd., which held the family’s island property.
The deal includes $56 million for the ferry and tram system that runs people to and from the island out of Southport, as well as the freight barge operation and the ferry’s Southport parking facility, according to the release. the N.C. Utilities Commission has to sign off on the ferry and sale before it can be finalized, according to the release.
In 2017 the state General Assembly created the Bald Head Island Transportation Authority to buy the ferry operations. The authority negotiated a deal with the family for $47.75 million, which Authority Chair Susan Rabon said is comparable to the $56 million agreement announced Tuesday.
The authority’s deal needed sign off from the state’s Local Government Commission, which approves borrowing for government entities. Approval never came, largely because Wood questioned appraisals on the ferry system and port property. Among other things, she noted that the marina sits on land valued by the Brunswick County tax office at about $16 million, but it was appraised at $36 million.
A second appraisal put it at $33 million.
“I don’t care who gets the assets,” Wood said last year. “But they should not be borrowing more money than they’re worth.”
The matter was further complicated by a competing offer from the Village of Bald Head Island, whose 295 voters approved a referendum last year to borrow $53 million and run the ferry themselves. The Mitchell family, through Bald Head Island LLC, rejected that proposal, preferring to deal with the state-run authority.
Wood is a member of the Local Government Commission, and she said last year that moving forward on the deal without more due diligence would have violated state law. She declined comment on the newly announced deal Tuesday, saying she was not aware of the sale.
State Treasurer Dale Folwell, who chairs the Local Government Commission, said he hadn’t seen the transaction’s details, and that his only interest throughout the saga was bringing “low cost and certainty to the working people on the island.”
Folwell said he “can’t imagine what’s going to happen to them now,” but he also said that he didn’t regret “anything that attempted to put sunshine on this transaction.”
Rabon said the state missed a great opportunity, and that the authority would have raised fares “no faster than inflation.”
“Now … the price is higher,” Rabon said in a text message. “And, in addition, the system will be operated by a for-profit entity instead of a public authority.”
Bald Head Island Ltd.’s chief executive, Chad Paul, said in a statement announcing the sale that the ferry system was going to “a reputable and experienced owner and operator with deep ties to North Carolina.”
“Our team is committed to ensuring a smooth and seamless transition, for the benefit of islanders, employees, and the greater community,” he said.