OCEAN SPRINGS -- Lawyers at the state Department of Marine Resources are looking at a proposal to swap land and businesses the DMR owns at the Ocean Springs Harbor for acreage in Biloxi.

A DMR spokeswoman has confirmed legal discussions are taking place and that Director Bill Walker "should be able to comment further in a week or so."

The state Commission on Marine Resources hasn't taken up the issue, but people opposed to the proposal have been commenting at monthly CMR meetings. Thursday, one of the Biloxi landowners spoke up.

The move would enable a 168-boat storage shed and restaurant at the harbor to continue as businesses, under private ownership, and give the DMR 3.5 acres along Back Bay to preserve.

The other alternative is what the DMR said it would do when it bought the harbor businesses almost two years ago -- tear down the boat storage and return the 1.7 acres at the harbor to green space, possibly creating parking and adding about 10 boat slips.

Ocean Springs leaders favor trying to save the boat-storage business. They want the 168-boat storage capacity to remain in the city; the commercial taxes it would create; and the boat-supply sales the city might lose to Biloxi and other areas.

Jackson County supervisors favor the plan that nixes the boat storage and creates much-needed parking around the boat launches and community pier at the harbor, which the county manages.

Keeping the boat storage would mean the county needs to re-enforce Harbor Drive to handle the wear and tear the business would create.

Either way, county Supervisor Troy Ross, who represents the harbor area, said he hopes a decision will come soon, because the county is finishing harbor improvements and needs to know what to do with the road.

A group of more than 50 residents who live around the harbor has fought for years to get rid of the restaurant and boat storage. It says they violate city zoning. The proposal for a land swap comes at a time when residents thought they had finally won. The state Court of Appeals ruled in their favor on issues related to the restaurant and zoning, and it had closed, attorney Amanda Kennerly said.

Then the DMR bought the businesses from David Harris in December 2010 and allowed him to continue running the boat storage for 18 months. That time was up this summer and it was emptied.

Steven Carter with Gutierrez LLC -- owners of the acreage in Biloxi that would be swapped -- said Thursday he is very interested in owning and reviving the boat-storage business.

He said he was not interested in running a restaurant. Instead, he said he would consider opening the restaurant building, which is elevated to meet federal standards, as a boating-supply business to complement the boat storage.

Kennerly and members of the neighborhood group, Friends of the Ocean Springs Harbor, have expressed their opposition at the state commission meetings. The DMR bought the harbor businesses with $3.65 million in federal CIAP funds, money each state gets to compensate for the impact of oil and gas drilling offshore.

Kennerly said she believes use of CIAP money alone could keep the swap from happening, because of the federal guidelines for how the money can be used and the strict way the deed is written.

But there's also the issue of conservation easements or covenants and whether those can be transferred from one property to another.

The acreage in Biloxi is along Back Bay, between Bayview Avenue and Back Bay Boulevard, east of Lee Street.

In its proposal to the DMR, Carter and Gutierrez LLC make a case that "there are greater benefits to be gained by the conservation of the Biloxi property" than the more urban land at the harbor.

"It would be a net gain for conservationists," Ocean Springs Mayor Connie Moran said. "The value of what would be preserved in Biloxi would be much better than tearing down a boat storage in a working harbor."

Carter said in his proposal the DMR would acquire delineated wetlands and waterfront property, which hold the greatest value for wetlands conservation, mitigation and hurricane storm surge protection in a low-income, storm-prone community.

"The wetlands portion of the property south of Bayview Avenue that abuts a natural bayou that is surrounded by a larger marsh and wetland habitat would also be included," according to the proposal.

"Harbor Landing (the boat storage) is primarily a paved area with a road running through it … no significant natural habitat," he said in the proposal.

The Biloxi acreage is larger and more ecologically diverse, he said. It adjoins a bayou that feeds into the Back Bay, so conserving it would expand a habitat range on the Biloxi peninsula.

Carter said he thinks a decision could be made early in 2013.

Bruce Duckett, a retired engineer with Friends, said the group has been very aware for some time the DMR is considering the swap.

"Their attorneys are looking at it," he said. "We don't exactly know where it is … .The whole thing is kind of floating along here, under the radar."

Swap opponents want the huge boat-storage shed removed and the land returned to its natural state. The group is urging supporters to write their legislators, local leaders and federal agencies to oppose the swap.

"We want to make sure this thing doesn't slide under the table," Duckett said. "Our effort is to stop the thing politically and if that fails, we'll take it to court."

Others say in order to give the state-owned harbor buildings to private individuals in the exchange, the DMR would have to declare the businesses surplus property.

Moran said the U.S. Fish and Wildlife Service, which oversees CIAP money, also would need a request from the DMR to consider it.

The DMR is trying to make sure there's no legal liability, she said.

Jackson County owns and runs the harbor with the help of an appointed commission. But, Supervisor Ross said, this is a state and federal issue.

"The county and city don't really have a say," he said.