Physical Therapy near Kiawah Island, SC

The South Carolina House of Representatives slipped funding for a $32 million legal settlement into the 2026-2027 budget – despite failing to even discuss the controversial payout during the committee process.

The appropriation would end decades of litigation, appeals, and mediation over on Kiawah Island – an exclusive barrier island located approximately 25 miles southwest of Charleston, S.C.

The settlement involves the Conservancy of the Sea Islands, the Town of Kiawah Island, the Kiawah Island Community Association, Kiawah Partners and the State of South Carolina. If it makes its way into the final version of the spending plan, it would compensate developers for lost income from a land parcel that extends from Beachwalker Park to the Kiawah River after the state compelled developers not to construct housing there due to ecological concerns.

Under the agreement, the land would be placed into a conservation easement held by the Conservancy of the Sea Islands. This easement would eliminate future residential development rights and preserve the land in its natural state. The spit is one of the few remaining undeveloped native habitats for multiple Palmetto State native species, including sea turtles and migratory birds.

If the deal goes into effect, the Town of Kiawah Island would acquire ownership of Beachwalker Park ensuring public access to the beach, while the state would take ownership of the remaining land, with portions potentially designated as a Heritage Trust Preserve under the auspices of the S.C. Department of Natural Resources (SCDNR).

Skeptics of the appropriation agree the land should be preserved, but insist developers were forewarned that their speculative investments would be valueless at the time they decided to buy the land, and are therefore unlikely to prevail in legal challenges demanding the state compensate them for lost potential revenue.

Opponents of the settlement argued during the budget debate on Tuesday evening (March 10, 2026) that regardless of the validity of the deal, it is unfair to ask lawmakers to approve a multi-million dollar expenditure that wasn’t discussed as the budget made its way through the committee process.

S.C. Freedom Caucus’ chairman Jordan Pace protested the line item – opposition unexpectedly buttressed by representative Gil Gatch, who pointed out during the floor debate that the developers have already struck out repeatedly in state courts.

Gatch, a lawyer-legislator, also claimed federal case law in support of the plaintiff’s case was shaky at best.

“Why would the attorney general settle with the developers in Kiawah when the developers don’t have a legal theory to win,” Gatch asked, questioning why attorney general Alan Wilson would “give a handout to the developers.”

Wilson’s office declined to comment on the settlement citing it’s inability to speak about pending litigation.

“I wanted to amend (the budget) to take ninety days to do due diligence to make sure that what we’re doing makes sense,” state representative Joe White told FITSNews in an interview conducted the day after the House approved funding for the settlement in the budget. “The ramifications for the future of South Carolina are that once you settle one of these out of court without litigating, every developer in South Carolina can claim ‘you cheated me out of something, and now the state owes me something.'”

White warned the case “could alter for the future what we can defend in South Carolina.”

After having conversations with attorneys familiar with this type of litigation, White said he wanted more due diligence done on the recommendation from the attorney general’s office that the state settle the case.

“I talked to administrative law judges here in South Carolina that said we would win this lawsuit if we pushed it forward,” White said.

White likened the deal to the General Assembly’s decision to ramrod Scout Motor’s economic development deal, which was also was also expeditiously funded with astonishingly little public input or oversight.

“This is similar to the Scout Motor deal which I voted against three years ago,” he said. “We did no due diligence on that, we did no due diligence on this. It never went to subcommittee or committee in the House. It just appeared in the budget, and most of the legislators knew nothing about it until last night.”

White lamented their approval of the expenditure, but added the process has run its course in the House.

“We approved it,” he said. “It’s done.”

Opponents of the appropriation must now rely on the S.C. Senate to remove it from the state’s spending plan, as governor Henry McMaster – who included the expenditure in his executive budget – is obviously not going to veto the money in the event it makes it to his desk.

(Via: Travis Bell)

Dylan Nolan is the director of special projects at FITSNews. He graduated from the Darla Moore school of business in 2021 with an accounting degree. Got a tip or story idea for Dylan? Email him here. You can also engage him socially @DNolan2000.

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