BILOXI -- Developer Chris Ferrara said he never would have built Boardwalk Marina in Biloxi had he known there was a chance that Harbor Landing boat storage in Ocean Springs Harbor would remain in business.

The two businesses would be in competition, being located so close together across Biloxi Bay.

Ferrara invested $11 million in Boardwalk Marina on Eighth Street after the state Department of Marine Resources bought the 168-boat storage and land in Ocean Springs in 2010 with the intent to tear it down.

More recently, there's been a proposal that would allow DMR to trade the property at Ocean Spring Harbor for undeveloped waterfront land east of Lee Street on Biloxi's Back Bay.

Under the land swap, Steven Carter and Gutierrez LLC would get the Harbor Landing boat storage building, 11 boat slips at the Ocean Springs Harbor and a defunct restaurant. Carter, who has experience in the shrimp boat and seafood business, said he would use the restaurant building for a boat store.

The DMR confirmed that their attorneys are looking at the proposal. It's not known what impact a State Auditor's investigation into DMR practices will have on the process.

Carter said he approached DMR with the idea in the spring. He proposes swapping 3.5 acres, which is less than half of his property on Back Bay, in exchange for the Ocean Springs business

and 1.5 acres.

Carter told the Sun Herald on Monday: "We're not selling to anyone. We're trading."

But Ferrara said Carter emailed him on Sept. 10, with an offer to sell all 8.37 acres of his property for $2.5 million.

Carter said his email to Ferrara didn't say he would sell for $2.5 million. "I really wasn't telling him for sure that I would."

The email to Ferrara said: "If interested, I'm [sic] will sell you my property on Back Bay 8.37 acres for $2,500,000. Has recent appraisal for $6,600,000. Steven Carter."

The current appraisal shows the value of his land in Biloxi is high enough to do an equal land swap for less than the whole acreage, Carter said. Including the Tidelands lease, the property exchange would be 4.48 acres, which Carter said is an equal trade to the facilities and land in Ocean Springs.

DMR bought Harbor Landing for $3.65 million from David Harris in December 2010 and allowed Harris to continue to operate the boat storage for 18 months until this summer.

The Coastal Impact Assistance Grant used for the purchase is designed to conserve coastal areas and wetlands.

Carter said Harbor Landing is a paved area with a road running through it, while the Biloxi property is a natural habitat and adjoins a meandering bayou.

Ferrara, one of the largest landowners in the city, also owns 40 acres adjacent to Carter's site and said the bayou is actually on his land.

Before Hurricane Katrina, Ferrara proposed building a casino on his site. Since then, he offered to give 10 acres of the property as the site of Ocean Expo. That free offer was turned down in favor of building the aquarium along Interstate 10 in D'Iberville.

Carter said he began the process to sell his land to Ferrara several times, but it never went to a closing.

Instead Carter planned to build a restaurant and marina that was bigger and closer than Harbor Landing, he said.

Knowing that, Ferrara built his marina with storage for 300 boats and wet slips for 100 more. He recently built and opened Hook Up restaurant next to the marina on Eighth Street.

Carter said before a land swap would be approved, it would have to go through CIAP protocol.

Penny Bartnicki, chief of the CIAP program for the U.S. Fish and Wildlife Service, said that as the federal oversight agency, "We would need to approve the transactions to ensure that the exchange property has at least equal market value as well as at least equal CIAP-eligible, coastal preservation, restoration and/or conservation benefits as approved in the MS State CIAP Plan." She said an environmental assessment may also be required.

Ocean Springs Mayor Connie Moran favors keeping open the business that would be operated by Carter.

Jackson County supervisors want the buildings demolished to make more room for parking for the boat launches and pier at the harbor.