The S.C. State Ports Authority has started breaking some of the leases it holds with businesses operating on Port Royal property eyed for an expensive redevelopment project.

The Port Royal businesses sit on land that, under legislation signed by Gov. Mark Sanford two years ago, will be sold to a private developer, leading to the construction of new shops, homes, parks and hotels on the town's waterfront.

The state has been working to break its leases with Port Royal Cement, Port Royal Drystack and fertilizer company Yari North America for more than two years, Ports Authority spokesman Byron Miller said Tuesday.

Although Miller wouldn't comment on the status of those talks or any potential closing dates for the three businesses, a letter sent out by Bobby Glover, owner of Port Royal Drystack, says that the facility's lease with the state ends Aug. 31.

"All boats must be moved by Aug. 31, 2006," the letter states. "... We apologize for any inconvenience, but we have no choice in the matter as this decision was made by the Governor of South Carolina."

At least five businesses operate on the state land in Port Royal, but Miller wouldn't confirm how many hold leases with the state.

"We are working to end the leases with the owners, but this process takes time," Miller said of the three businesses with which the Ports Authority is negotiating. "This isn't easy. We entered into an agreement on good terms with the owners, and now we are trying to find a solution that is good for everyone involved."

According to lease agreements obtained by The Gazette last year, the Ports Authority can end its lease with the marina at any time by giving a year's notice. If the lease is terminated, the Ports Authority will buy the marina at appraised market value less the market value of the land.

The marina cost Glover more than $1.2 million to build, according to reports published in 2003.

Ports Authority officials would not provide the contracts with Port Royal Cement or Yari North America on Monday.

Other businesses on the state land, such as Dockside Restaurant, which signed a 36-year lease in 1996, and Port Royal Seafood, which signed a seven-year lease with automatic extensions in 1994, haven't been contacted by the state, Miller said.

William Gay, who owns Port Royal Seafood, said he hasn't been contacted by Ports Authority officials about ending his lease.

"I don't have any idea of what they are going to do," he said. "I haven't heard anything. I just know I have a business."

Port Royal Town Councilman Joe Lee said he was encouraged to know that the Ports Authority is moving forward with the sale of the port property, which under state legislation has to occur by the end of the year.

"I think it is a positive sign," he said. "We haven't seen anything for several weeks. I'm really pleased to see it is moving forward."