The State Port Authority and Norfolk Southern have come to a $250 million impasse near the foot of Market Street.
Last week, the railroad fired back at the maritime agency’s efforts to sell Union Pier Terminal to a developer.
Norfolk Southern formally responded Aug. 26 to a lawsuit the S.C. State Ports Authority filed filed last month to determine whether 14 acres of the prime 67-acre site can be sold based on a legal restriction included in a 1957 real estate document.
The company also countersued the SPA to prevent a transfer of the land, alleging it will suffer undisclosed damages if the property changes hands.
Norfolk Southern is asking for a jury trial that could bog down the dispute in the state court system.
The deed restriction isn’t an 11th-hour rabbit the company is pulling out of its hat. It was first reported by The Post and Courier about two years ago. It calls for the 14 acres near the downtown waterfront to be forever used "for exclusively public purposes." The document was prepared and filed by Southern Railway Co., a predecessor to Norfolk Southern.
At the time, the freight-train operator had given the state of South Carolina seven parcels between Society and Calhoun streets that became part of Union Pier, now mostly used by visiting cruise ships. In return, the railroad required that the land never be sold or transferred to private buyers.
The SPA has claimed the restriction was "extinguished" when it took ownership to the 14 acres from the state, Norfolk Southern said in its written response this week.
The railroad disagreed, noting that the SPA acknowledged the validity of the 1957 deed terms in 2014, when the port asked for permission to sell one of the seven parcels for a private development.
In that instance, Norfolk Southern said it agreed to the sale on the condition that the restriction on the other six tracts "remains in full effect and is unchanged in all respects.” A senior executive from the port signed the document, which was recorded with the Charleston County Register of Deeds.
The SPA plans to sell its underutilized waterfront property near the historic City Market to a company formed by local hospitality investor Ben Navarro, who's completing work on a luxury hotel next door on the site of the authority's former Concord Street headquarters.
Navarro’s Marti Holdings LLC plans to redevelop Union Pier into a mix of real estate uses and public spaces, though specific details have not been released. The $250 million land sale was announced about two years ago and is scheduled to close in 2027.
The SPA began to address the deed wrinkle last month, when it sued Norfolk Southern to answer what it called "a legal question of property rights of the state and intent for future use that requires resolution by the courts based on the South Carolina Constitution and other state property law."
The ports authority added that it was looking "forward to a quick decision on this issue."
Navarro’s company said last month that it’s been "aware of this issue for some time. We look forward to closing on the Union Pier property and making this special property accessible to the Charleston community.”
In its lawsuit, the SPA pointed to a July 2024 opinion from S.C. Attorney General Alan Wilson, who found the former Southern Railway land could be sold based on state law but that the deal would need to be approved by legislators.
"Based on our analysis ... we do not believe the language included in the 1957 deed, restricting the use of the property 'for exclusively public purposes,' prohibits the Ports Authority from disposing of the property," he wrote.
Norfolk Southern’s attorneys shrugged off Wilson's opinion Tuesday, saying it’s "not binding and is of no legal effect" on either the company or the court that will hear the dispute.
The SPA’s lawsuit was transferred last month to the Charleston County Master in Equity, which deals with foreclosures and other real estate legal matters.
Norfolk Southern on Tuesday asked that that the litigation be moved back to state court for a jury trial.