State Sen. Dick Elliott and Atlantic Beach Mayor Irene Armstrong have financial interests in land that is in the path of the North Myrtle Beach connector, and Armstrong is fighting state officials over how much money they must pay for the property.

The S.C. Department of Transportation in September offered $1,500 for a 0.072-acre slice of Armstrong's 3.7-acre parcel, which is at the intersection of Fire Tower and Sandridge roads, just west of the Intracoastal Waterway.

Armstrong, who was re-elected to a third term as mayor of Atlantic Beach in November, called the state's offer "highly insulting" and said she will go to court to ask for more money.

No court date has been set.

"They don't know who they are dealing with," Armstrong said, referring to the DOT.

Elliott, D-North Myrtle Beach, is tied to the property by a $6,000 mortgage he gave to Armstrong in June 2003.

Elliott said he was not aware the property was in the path of the North Myrtle Beach connector "until months, maybe a year" after he gave the loan to Armstrong. He said he has not tried to influence the DOT or other state officials to fund the road or route it through Armstrong's property.

"I haven't talked to anybody about this property," Elliott said.

Armstrong said she used her land to secure a loan from Elliott so she could pay some political expenses related to last year's mayoral campaign.

Elliott said he gave Armstrong the money because her family was having difficult financial times.

"She came to me and said, 'I need some help,'" he said.

Elliott said he has given hundreds of similar loans, many of them unsecured, to people over the years. He said he has no other loans, business or real estate dealings with Armstrong.

Elliott also said he has no interests in any other property along the North Myrtle Beach connector corridor.

Armstrong, a sales agent in Elliott's real estate firm, said she hopes to pay off the loan by next spring.

Elliott, like most state legislators, does not list personal business and real estate deals on his Statement of Economic Interests form. State law requires legislators to file that form every year with details of their business and financial dealings.

The only income Elliott, a developer and founder of Elliott Realty, listed on this year's form was $31,000 in salary and expenses he received as senator.

Among the things state law requires legislators to disclose is any real estate transaction "that could be viewed as a conflict of interest with your public position."

Elliott's district includes the area where the North Myrtle Beach connector is being built, and he is a member of the state Senate Transportation Committee.

Phil Land, a spokesman for the state Senate Ethics Committee, said legislators are given wide lattitude about what they report on their economic disclosure forms and that it is left up to legislators to determine for themselves whether a business deal poses a conflict of interest.

Elliott said he is not required to include any business dealings except those he has with the state government.

"My private business is my private business," he said. "It's not any of the state's business."

The portion of Armstrong's land that the state needs to build the North Myrtle Beach connector is about 2 percent of the 3.7-acre parcel. The state's offer amounts to more than $20,000 an acre.

Horry County records show Armstrong's property has an assessed value of $60,700. That amounts to about $16,405 an acre.

The DOT compensates property owners according to the value of the land when it is taken, not its potential or future value.

Developers say Armstrong's property is among the best spots for commercial development along the North Myrtle Beach connector because it is near the base of a bridge that will span the Intracoastal Waterway.

Armstrong said she has not determined a fair price for the piece of property the state needs for its highway.

"It is certainly far greater than $1,500," she said.

DOT officials declined to discuss Armstrong's property.

They said they do not talk about individual property acquisition cases.

The state is negotiating with dozens of property owners along the North Myrtle Beach connector route and estimates right-of-way acquisition will cost $28 million, or more than half of the project's $52 million estimated cost.

Whatever money Armstrong gets for the property could be reduced by outstanding liens and judgements she owes, according to court records.

For example, Brunswick Community Hospital got a $2,366.43 judgment against Armstrong in October 2002 for unpaid medical bills. The DOT has notified the hospital of its plans to acquire Armstrong's land.

Horry County records also show there are unpaid property-tax bills of $85.96 for 2003 and $86.72 for 2004. The property is scheduled for sale at auction in December because of the delinquent 2003 tax bill.

Armstrong's husband, William Armstrong, purchased the property for $14,500 in November 1989 and sold it for $3,000 in May 1994 to Charley Ray. Irene Armstrong then bought the land back from Ray for $5,500 in July 1996.

Armstrong said her husband mistakenly sold the land to Ray in 1994.

"[William Armstrong] didn't realize he was selling the property," she said.

Ray, who owns Ray Realty Inc. in Conway, said William Armstrong "knew what he was doing" when he sold the property in 1994.

"It was very clear that he was selling the property," Ray said. "Then, a couple of years later, it became very important to them that they get the property back. So they offered me a little profit, and we made the trade."

Armstrong said she planned to subdivide the property into eight or nine lots for single-family homes, "but I'm holding off on that now because it's not clear to me exactly what impact the road is going to have."