Charleston Hotel Industry Continues to Succeed

Great news for Charleston’s hotel industry! Thank you to the Charleston Visitors Bureau for sending us this report.

Rennaissance Charleston 2

Impressive Year-to-Date Hotel Numbers

August has historically seen visitation drop off noticeably around the middle of the month.  This decrease has generally coincided with school start dates across South Carolina and our adjacent states.  This year we did not see the decrease that we’ve come to expect, which resulted in a very strong August and equally impressive year-to-date numbers. In fact, Charleston County hotels sold approximately 18,500 more roomnights in August 2014 than in August 2013!

 

Every submarket saw increases in room nights sold, occupancy, ADR and RevPAR.  The county realized a 5.4% increase in room nights sold, which netted a 5.2% increase in occupancy of 76.4%.  The average daily rate increased by 8.9% to $134.10, while RevPAR increased an impressive 14.5% to $102.48.  The Charleston and North Charleston submarkets enjoyed double digit percentage growth in room nights sold, while East of the Cooper turned in a fourth consecutive month of double digit growth in ADR.

 

Year to date, countywide room nights sold are up 4.2%, occupancy is up 4.1% (76.9%) and the ADR is up 6.4% to $137.02.  This yielded an impressive 10.8% increase in RevPAR of $106.75.  Charleston County has now had year-over-year ADR increases for 44 consecutive months and RevPAR increases for 25 out of the last 26 months.

County chooses Neck area for skatepark

County settles on Neck area property for long-delayed skatepark

Aug 19 2014 6:47 pm

By Brenda Rindge, Post & Courier

After searching for five years for the perfect site for a skatepark in the Charleston Neck area, the county Park and Recreation Commission has settled on the location it wanted all along – a 25-acre property on Oceanic Street.

The long-delayed park could open sometime in 2015 at 1593 Oceanic Street, which has 3 1/2 acres of upland nestled between Interstate 26 and the Ashley River marsh.

“The one question everybody asks is, ‘When am I going to skate?'” said county parks Executive Director Tom O’Rourke. “The answer is, I don’t know. It’s going to take less than a couple years and a little more than a year.”

The commission has wanted to build the skatepark at the Oceanic Street property for several of years, but was deterred by the discovery of tons of concrete that had been dumped there and covered with dirt, O’Rourke said.

Parks revenue was sufficient to buy the land, which cost $800,000, he said, but building a skatepark there would not have been feasible because of the cost of removing the concrete, estimated at nearly $1 million.

“We just thought as an agency there’s no need to dump extra money into this site when we have 10,000 acres of park land all over the county,” O’Rourke said.

The commission decided Monday to go ahead with building the skatepark there after Charleston Mayor Joseph P. Riley Jr. said the city would pick up half the cost of removing the concrete debris. The $500,000 would be available because the property is located in a Tax Increment Financing District, a public financing method for redevelopment and community improvement projects.

“The commission found the Oceanic site which seemed to be – is – excellent because it is centrally located,” Riley said Tuesday. “That was by far the best site they considered and so … we worked to help identify funds. I sent a memo to every member of City Council and there has been no dissent. I’m confident that City Council will overwhelmingly support this.”

The issue will go before City Council in September.

In addition to the city funds, the Charleston-based nonprofit Speedwell Foundation donated about $400,000 to remove the debris and prepare the site for the skatepark.

Plans for the skatepark will be unveiled at a public meeting the commission expects will be held soon, O’Rourke said.

Removing concrete should take about three months, he said.

The planned park will be “regional quality,” O’Rourke said, meaning it will be 25,000 square feet or more so that it can host competitions.

“We’re moving as fast as we possibly can,” he said. “Our site selection process, after 5½ years, is finally over.”

 

Broker & mayoral candidate Tecklenburg garners great support

CC&T Broker and Charleston mayoral candidate John Tecklenburg recently announced he has received the endorsement of former U.S. Senator Fritz Hollings. We could not be prouder to support Tecklenburg in this election!

Check out the article from The Post & Courier about the race!

Hollings endorses Tecklenburg in Charleston mayor’s race

Aug 17 2014 12:01 am

John Tecklenburg

Former state Rep. Jimmy Bailey won’t throw his hat in the ring for the 2015 Charleston mayoral race because of the time it would take away from his family.

Bailey, who ran against Mayor Joe Riley in 2003, said in a letter he is concerned about a host of issues facing the city but, instead, will offer to support whoever becomes the city’s next mayor.

Bailey’s letter said he’d been giving the race a lot of thought but “it became clear to me that I really did not want to give up so many things, such as picking up my grandchildren on a regular basis and watching them grow.

“I remembered going through the same agonizing thoughts when I went on to the General Assembly and how much I missed out on with my children while I was in Columbia six months of the year.”

Meanwhile, the only announced candidate, Charleston businessman John Tecklenburg, continued to consolidate support from the Lowcountry’s Democratic base. He announced last week he has the endorsement of former U.S. Sen. Fritz Hollings.

For those in the know, this announcement is no surprise: Tecklenburg’s father Henry was one of Hollings’ close friends and advisors, and John Tecklenburg managed Hollings’ last re-election campaign in 1998.

Tecklenburg said he was honored by Hollings’ nod, adding, “Sen. Hollings is a true statesman, a model public servant and a role model of mine.”

A lot of names have been floated as possible mayor candidates, as Riley has said he won’t seek re-election to an 11th term. Some may wait until after this fall’s elections to declare their intentions.

 

Charleston City Council gives nod to tax-break extensions for hospital district, Neck Area projects

Diane KnichPost and Courier

Jun 17 2014 6:24 pm Jun 17 6:46 pm

Traffic flows through the Neck Area along Interstate 26, not far from downtown Charleston (top left). Charleston City Council on Tuesday gave initial approval to adding a decade to a tax incentives meant to help finance a redevelopment project in the area.

Charleston City Council Tuesday gave initial approval to adding a decade to a pair of tax incentives meant to help finance two large urban redevelopment projects, one in the downtown hospital district and the other in the Neck Area.

The plans call for extending tax increment financing districts, or TIFs. Under such plans, improvements – such as roads, sidewalks and parks – for the developments would be paid for by future tax revenue generated by the development.

One plan is the Horizon Redevelopment Project, aimed at creating new housing and a biotechnology research hub on 20 downtown Charleston acres, between Lockwood Drive and Hagood Avenue, from Spring Street to Fishburne Street.

The plan was set to expire in 2033, but will be extended to 2043.

Charleston County and the Charleston County School District previously voted to extend the TIF only for an additional five years.

The other project involves the potential redevelopment of land along the Ashley River in the Neck Area called Magnolia. The property previously was home to heavy industry and includes a Superfund environmental cleanup site.

That TIF was set to expire in 2029, but now will run through 2039.

Charleston County and the Charleston County School District also extended it for another 10 years.

City Council must vote on both extensions two more times before they are final. Dates have not yet been set for those votes.

Charleston Mayor Joe Riley said the Neck Area plan includes $500,000 for a community center in the Rosemont area. The money for the project was included at the request of Charleston County Councilman Teddie Pryor, Riley said.

But, he said, the city had been considering the project. “It’s an appropriate use of TIF funds,” Riley said. “It’s a public building that will enhance the neighborhood.”

Reach Diane Knich at 843-937-5491 or on Twitter at @dianeknich.

Link to article on Post and Courier website here.

Charleston peninsular projects could pump $1 billion into downtown economy

Close to a billion dollars.

That’s about how much money will pour into peninsular Charleston for construction projects underway or planned. To put it another way, that’s also the amount of money Boeing Co. will invest in North Charleston on new buildings and equipment by 2020.

Photo Gallery Downtown construction

With the renovation of the Gaillard Auditorium, rising hotels, a church renovation and new shops and restaurants, downtown Charleston is in the midst of a building boom.

Of the investment amounts known for some major and not-so-major peninsular projects, about $515 million in construction or renovation is either being built or in the design stage.

The values of nearly two dozen other projects large and small would push the amount closer to the $1 billion mark, money that would ripple through the economy to provide jobs and spread new development throughout downtown Charleston.

The economic impact is just starting to be felt, said Patrick Price of PrimeSouth Group, a real estate development company.

“It’s impressive to watch the transition,” Price said. “The level of buyers coming in is on a level I haven’t seen. People coming in and buying are very wealthy individuals or groups.”

Countywide property reassessment won’t occur until next year, but Price sees the new construction as expanding the tax base and causing property values to rise.

“The projects being done are quality. You can’t come into the city and build something that looks like junk,” he said. “It is positive development. It’s not like you are dropping in a bunch of projects nobody wants. The value of their assets is going up.”

The development and improvements are a welcome sight for city leaders.

“It’s wonderful we have such a demand on the peninsula in the central business district,” said Tim Keane, director of Planning, Preservation and Sustainability for the city of Charleston.

“As the region grows, we want to see the peninsula grow,” he said. “It’s hugely beneficial for the city to see the peninsula grow in this fashion.”

The overall city will be affected by all the new development, said Vic Mills, CEO of Blanchard and Calhoun Commercial of Augusta, which develops property throughout the Southeast. His firm’s $25 million Hilton Garden Inn on Lockwood Drive will check in its first guests in May.

“Restaurants are favorably impacted. Retail is favorably impacted. The city and county realize increased values from (property) taxes, hotel and motel taxes and sales taxes. All of those go into the coffers of the city and county. These are all positive things financially to the area,” Mills said.

The downside, he said, “is at what point do you reach the saturation with traffic and parking?”

The high-end development could affect property values to a point where some administrative offices could be forced out of downtown to cheaper locations, Mills said.

“There is probably an opportunity for the medical community’s offices to relocate from the peninsula,” he said. “It’s not rational for administrative duties such as accounting, finance, etc., to be adjacent to medical facilities when they can be in different areas and not pay for parking. Instead of paying $100 or $150 a month for parking, there is probably an opportunity to relocate some of the existing employment in suburban areas. We think that will probably happen. At some point, it will be too expensive to maintain administrative functions downtown when they can be done just as easily elsewhere.”

And construction hasn’t come without some headaches for nearby residents either.

Demolition, pile-driving and hammering are all part of the process that at times becomes a little too much for some people next to the project.

“The main problem is they are starting so early,” said Liz Aktar, an Ansonborough resident and downtown business owner who works from home. Her Laurens Street house backs up to the Gaillard project. “They are my alarm clock right now. A couple of weeks ago they were starting at 5:30 a.m. And throughout the day, it’s a constant beeping. There is no break all day.”

The neighborhood association has met to talk about the noise, and they are working with the city, which owns the property, to reduce complaints.

Aktar has learned to cope with it because she sees the end product of “having a beautiful performance hall.”

Added benefit

When construction is completed on all the downtown projects, jobs will be created. Probably hundreds of them. The Midtown project alone will bring 200 jobs in hotels, retail and offices, according to Stuart Coleman with CC&T real estate development company.

But while construction is going on, money trickles through the economy as well.

When Midtown broke ground last fall on its $80 million hotel and mixed-use complex at King and Spring streets, Kevin Murphy with DPR/Hardin Construction Co. of Atlanta moved with his wife and child to Charleston to help oversee the Upper King Street redevelopment project.

He stayed in a downtown hotel for a couple of months before moving into a house in Mount Pleasant.

His co-worker, Matt Waddell, moved to Charleston from Atlanta with his family as well. They now are living in West Ashley.

While working on the project, the two, along with up to 200 construction workers, often dine out for lunch, buy gasoline or stay in temporary quarters, pumping money into the local economy long before the twin 10-story Hyatt House and Hyatt Place hotels being built put their stamp on Charleston’s economy when they are finished. “We are big Dell’z Deli fans,” Murphy said. “When we first got here, we ate there about every day.”

Dell’z owner Dell Grayson can attest to that.

“I see more and more of them every week,” she said. “I see a lot of unusual faces now.”

Other nearby places he and the workers frequent include O’Malley’s and Bi-Lo for lunch and King Market convenience store for drinks and snacks.

“I see a lot of them, but they only have a little bit of time,” said Sherrie, a clerk at King Market who did not want to give her last name. “They are quick and fast.”

Over at Bi-Lo, store manager Jared Lott said the construction work, not only from Midtown, but other projects as well, brings a steady line of hard hats to the hot-food counter. He also saw an upturn in business while the new Elan Midtown apartments were being built on the next block at Meeting and Spring streets.

“A lot of them eat lunch here every day,” Lott said.

He’ll probably see more when Evening Post Industries starts construction on its first phase of mixed-used development valued at $85 million at Meeting and Columbus streets. Work should start by late this year or early next year, according to Ron Owens, chief financial officer for Evening Post, which owns The Post and Courier. That and other projects will continue the wave of redevelopment enveloping the peninsula.

“Barring another catastrophe (like the 2008 finan- cial market meltdown), in another five years it’s going to be impressive to see what comes down the road,” Price said.

Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.

 

Downtown Charleston Neighborhood Put at Ease with Plans for Sound Barrier

Downtown Charleston Neighborhood Put at Ease with Plans for Sound Barrier

CHARLESTON, S.C. (WCIV) — A small community’s fears have been put at ease after a 7-year battle with the state’s Department of Transportation. A compromise means residents will stay, an interchange will be built, and a sound barrier will divide the two.

For years, the Rosemont Community has fought to stay alive. It sits under Interstate 26 along the King Street extension, nestled between a handful of industrial businesses.

“We have the railroad tracks over there. Then, there was the fertilizer plant over there,” said Nancy Button, who was born in the neighborhood.

Neighbors say when I-26 was first built in the area, it pushed dozens of families out of their homes. Now, the community is half the size of its original build.

“They had no choice. They had to find a place,” said Rosetta Ware-Johnson, whose family moved into the community more than 50 years ago.

In 2007, the close-knit corridor was faced with yet another problem. The South Carolina Department of Transportation wanted to build another off-ramp near the Spruill Avenue exit of I-26.

“We had to read about it in the newspaper,” said Button. “That’s when I started lobbying at meetings to try to find out what we could do to try to save our community.”

Button is also the president of the Rosemont Neighborhood Council. She says she and her neighbors feared they would be pushed out of their homes.

“These elderly people live on a fixed income,” said Button. “Where are they going to go?”

Button fought against the project but lost. So, she says she fought for a compromise instead.

“They’re going to tear down North Meeting Street ramp and then they are going to come over from Union Heights and take part of Southern Lumber Company,” said Button.

Button says the project will now include building a sound barrier behind a group of homes on Doscher Avenue.

“This is a win,” said Button. “Definitely a win because they’re not going to take the entire community.”

The New Port Access Road will connect to the new Navy Base Terminal, which is currently under construction.

Calls to SCDOT officials were not returned.

 

Charleston wants the county and school district to extend tax incentives for two development plans

Charleston wants the county and school district to extend tax incentives for two development plans

 

Charleston Mayor Joe Riley is asking the county and the school district to add a decade to a pair of tax incentives meant to help finance two large urban redevelopment projects, in the downtown hospital district and in the Neck Area.

The Horizon plan

The master plan for the Horizon District redevelopment will be laid out Wednesday afternoon in a presentation to Charleston’s Board of Architectural Review.

The BAR is not being asked to review or approve the plan but rather will see the presentation to learn more about the project.

The meeting starts at 4:30 p.m. in the BAR meeting room on the third floor of 75 Calhoun St.

One plan is the Horizon Redevelopment Project, aimed at creating new housing and a biotechnology research hub on 20 downtown Charleston acres, between Lockwood Drive and Hagood Avenue, from Spring Street to Fishburne Street.

The other project involves the potential redevelopment of land along the Ashley River in the Neck Area, on property that was home to heavy industry and includes a Superfund environmental cleanup site.

In each case, an extension of incentives known as tax increment financing districts would mean that the city, county and school district would forgo property tax revenues created by the developments for an additional 10 years. Instead, the money would be used to finance work in the development areas, such as new roads, sidewalks and parks.

The Horizon and Neck Area TIFs currently expire in 2033 and 2029, respectively.

Charleston County and the Charleston County School District have the option of not participating in the extension, and have until mid-June to decide.

A tax increment financing district, or TIF, lasts for a set amount of time, and at the end of that time, all of the new property taxes produced by development in the specified area (that’s the “tax increment”) start flowing to the city, county and school budgets.

“We have to make the case that if they give something up they’ll get more later,” said Steve Bedard, Charleston’s chief financial officer.

The county and the school district have participated in TIFs in Charleston, North Charleston and Mount Pleasant, but lately have been looking at them with a more critical eye.

“What we have to watch with these TIFs is, what are they bringing to the community?” County Council Chairman Teddie Pryor said.

In 2010 the county went along, forgoing an estimated $12 million in property tax, when Charleston sought to extend the King Street Gateway TIF to help finance the Gaillard Center. The school district, however, declined to participate, and is collecting about $4 million more in yearly property tax as a result.

In December the district agreed to extend a North Charleston TIF district, with the condition that the district keep 12.5 percent of the new tax revenues, rather than giving up all the new revenue.

“We understand why municipalities need TIFs, but the school district needs revenue,” said Cindy Bohn Coats, chair of the school board.

The city and Medical University of South Carolina Foundation are jointly pursuing the Horizon redevelopment plan, in an area where much of the property was once a landfill.

“It’s a very challenged site,” Bedard said. “Everything from the sidewalks to the streets will have to be put on pilings.”

Coats said the school board has formed a committee and will be evaluating both TIF extension requests. The city’s position is that the extensions would make up for the years lost because of the real estate market downturn, and help meet the original goals for which both TIFs were created.

The second TIF district covers a large expanse of Charleston’s Neck Area, where 10 years ago a development plan called Magnolia envisioned building up to 4,400 new homes and millions of square feet of commercial space. Before the Great Recession intervened, Charleston used the existing TIF for the area to build a nearly $8 million bridge to the property across the Ashley River marsh.

Now, a new team headed by MeadWestvaco is considering redevelopment of the still-vacant site, but there’s little infrastructure and much of the property requires extensive environmental cleanup.

“With the Neck TIF, I don’t think anything will happen if we don’t get it (extended), while with the Horizon TIF, I think it would be less than it could be,” Bedard said.

The way TIFs work is, cities borrow money to finance public improvements, then use new property tax revenues created by development to pay off the debt. Extending a TIF means there are more years of revenues, and therefore more money can be borrowed.

Pryor said he’s not sure the developments need tax incentives.

“Do I think these projects would go on without at TIF? Yes, I do,” he said. “We’re going to have to take a look at this closely.”

Pryor also suggested that if the county goes along with the Neck Area TIF, he may want assurances two nearby communities, Silver Hill and Rosemont, would see concrete benefits.

“If they are going to be impacted (by development), then they should benefit from the TIF,” Pryor said. “I know Rosemont needs a new community center.”

Reach David Slade at 937-5552.

 

Ashley River property cleaner, safer after $100 million of work and countless tons of dirt

Ashley River property cleaner, safer after $100 million of work and countless tons of dirt

For much of the 20th century the Ashley River waterfront in Charleston’s Neck Area was crowded with factories that fouled the environment while producing fertilizer and treating lumber.

Arsenic and lead contaminated the soil where fertilizer was produced because the manufacturing process involved storing sulfuric acid in lead-lined tanks. Creosote and dioxin from treating wood crept into the groundwater, the marsh, and the high ground. Methane and pesticides leaked from an old county landfill.

The problems were little known or understood during the middle of the century, but by the 1990s many sites along the river had made the U.S. Environmental Protection Agency’s national list of toxic properties and one was a Superfund site – a national top priority cleanup.

Now, through a series of multimillion-dollar projects mostly conducted during and after the recent recession at private companies’ expense, many of those polluted sites have been cleaned up for industrial reuse. Hundreds of tons of contaminated soil and sediment were removed, and groundwater was treated.

“If you go down that river there’s probably been $100 million of cleanup,” said Craig Zeller, project manager at the U.S. Environmental Protection Agency, who was initially in charge of all of the Ashley River cleanup sites. “It was a huge success story for us.”

It’s a story that’s still being told, however.

“It’s everything from sites that have been totally cleaned up to sites that haven’t been cleaned up, like Columbia Nitrogen,” said Kenneth Seeger, president of community development and land management at MeadWestvaco, which holds the note on several large tracts eyed for redevelopment.

The former Koppers wood treatment plant site, on the south side of Milford Street, is still a Superfund site with an ongoing cleanup project.

“While the bulk of it was done, we continue to collect creosote there,” Zeller said.

And cleanup work hasn’t started on the adjacent Columbia Nitrogen site, where a fertilizer factory was once located, on the north side of Milford Street.

Exploding shrimp

Those sites are in the heart of the area where a plan to develop thousands of homes, hotel rooms and shops was announced a decade ago, known as the Magnolia development. A North Carolina company specializing in redeveloping industrial land planned to clean the land up to residential standards, but that plan faded away when the recession hit.

“When the economy tanked, they basically said they had changed their mind,” said Ken Mallary, an EPA site manager for several of the projects.

The company, Cherokee Investment Partners, did not return calls seeking comment.

Without the extra funding to bring properties up to residential standards, most of the fertilizer plant sites were cleaned up to industrial standards, in keeping with their historic use.

Residential standards are stricter, to address concerns such as children who might play in, and ingest, soil contaminated with lead.

The happy ending to the environmental success story that regulators, city officials, community residents and real estate interests hope to see is the day when all the properties are cleaned up and redeveloped.

“It’s a cliché, but we’re trying to take these old lemons and make lemonade,” Zeller said.

Those familiar with Charleston lore might suspect the EPA took notice of the Ashley River waterfront after the problem with spontaneously combusting shrimp in 1992. That’s when a man who had been shrimping along the river was driving home across the old Cooper River bridge and noticed smoke coming from his cooler.

The reason? The shrimp had been exposed to phosphorous in the muck along the riverbed, near a chemical plant, and phosphorous spontaneously can catch fire when exposed to oxygen.

“Green groundwater”

Zeller confirms the shrimp incident happened, but Neck Area pollution first caught the EPA’s attention when a company digging a barge canal along the Ashley River in the early 1990s hit a large waste pit created by the former Koppers Co.

“That released a bunch of creosote, there was a fish kill, and Koppers became a Superfund site,” said Zeller.

Creosote, derived from coal tar, is a commercial wood preservative and pesticide that was used on telephone poles and railroads ties. A possible carcinogen, creosote is oily and flammable, and contact can irritate skin, eyes and lungs.

“We started looking to the south, and the north, and that’s when these other sites were discovered,” Zeller said.

Most of the Ashley River sites were once home to manufacturers of agricultural fertilizer; Swift Agri-Chem, Wando Phosphate, Stono Phosphate, Atlantic Phosphate Works, Columbia Nitrogen, and Ashepoo Phosphate and Fertilizer.

There was also a former Charleston County landfill, and on the Cooper River side of the Neck Area, and the Macalloy Corp. ferrochromium alloy smelting plant.

“They had Gatorade-green groundwater over there,” Zeller said of the Macalloy site. “It was an interesting cleanup.”

That cleanup involved digging about 1,000 cubic yards of contaminated sediment from the Shipyard Creek, and chemically modifying material contaminated with hexavalent chromium, which is known to cause cancer. Macalloy was one of the first cleanups completed in the Neck Area, and the property has been returned to use as an industrial site.

When the EPA oversees an industrial cleanup, it looks to the companies that caused the problems, or to the companies that merged with or otherwise absorbed the earlier companies. That’s why ExxonMobil, as corporate successor to Virginia-Carolina Chemical Co., paid to clean up several of the fertilizer sites along the Ashley River.

In the 20 years since Koppers was named a Superfund site – placed on the National Priorites List of “the most serious uncontrolled or abandoned hazardous waste sites” in the nation – a quiet transformation has been taking place.

Along the Ashley River, in parts of both Charleston and North Charleston, five EPA-approved environmental cleanups have been completed, another is ongoing, and the seventh is scheduled for work this year.

However, all of the sites where work was completed would need additional cleanup if the properties were to be used for residential construction.

“EPA is not in the real estate business,” Mallary said. “We just want to see the properties cleaned up, but they have to be cleaned to the expected future land use.”

Most of the waterfront properties aren’t much to look at now – mostly bare land covered with weeds and rubble. The Columbia Nitrogen cleanup should begin later this year, and then the big question for the future of the Neck Area will be what decisions are made about redevelopment.

Reach David Slade at 937-5552

Reclaiming the Neck, again; Ashley River waterfront gets a second look from MeadWestvaco

Reclaiming the Neck, again; Ashley River waterfront gets a second look from MeadWestvaco

David Slade Posted: Sunday, May 11, 2014 12:01 a.m.

Wade Spees/StaffTraffic flows to and from the Charleston peninsula along I-26 through the Neck area where a bridge (center right) ends abruptly in an undeveloped field and serves as a reminder of the ambitious, unsuccessful ‘Magnolia’ real estate plan. Buy this photo

A failed plan to reclaim polluted land along the AshleyRiver and build thousands of homes and businesses there is getting a second look, with regional development powerhouse MeadWestvaco leading the team. While a building boom has resumed across the tri-county area, roughly 300 acres of once-industrial riverfront sit vacant in the Neck Area, the stretch of land between the Ashley and Cooper rivers where Charleston and North Charleston meet.

That unpleasant landscape, one of the first glimpses of Charleston for many people as they drive into the city, is seen as an opportunity to focus some of the region’s growth inward, toward the metropolitan area’s urban center. But there’s the challenge of making the properties a safe place to live and work. Once lined with fertilizer factories, a lumber treatment plant and other heavy industry, much of the land between the AshleyRiver and Interstate 26 was left polluted with lead, arsenic, creosote and other contaminants during the last century.

“Obviously the Neck is full of contaminated sites,” said Kenneth Seeger, president of community development and land management at MeadWestvaco. “This whole situation is extremely complex.”

A bold plan that started more than a decade ago aimed to clean up and redevelop that land, but the real estate meltdown intervened. A great deal of environmental cleanup work was accomplished, but additional work costing tens of millions of dollars would be needed before anyone could live on the properties.

The largest site is where a mini-city called Magnolia was planned along the AshleyRiver, with up to 4,400 new homes and 2.5 million square feet of office, retail and hotel space. It would have been the largest development in Charleston since DanielIsland, with some of the tallest buildings in the city, and there was even short-lived talk about moving part of I-26 to accommodate the plan.

“Magnolia was put on pause, or was one of the many real estate victims of the Great Recession,” said Charleston Mayor Joe Riley. “This project made huge sense when we started working a decade ago, and that’s even more so today.”

Motorists who speed by the area today on elevated Interstate 26 might notice empty spaces where industrial buildings once stood, and a bridge that cost nearly $8 million and appears to serve no purpose. The bridge was built to provide access to the Magnolia site, which also connects to upper Meeting Street.

“You would obviously start development adjacent to the bridge,” Riley said.

Slightly upriver, just over the North Charleston city line, a second development called AshleyRiverCenter had been planned by the same group of companies. It was supposed to include a public park and pier, a botanical garden, and a greenway along the Ashley, built with the city’s assistance.

That was before the crash, before the redevelopment team led by Cherokee Investment Partners, of North Carolina, defaulted on loans secured by the properties. Both development plans went quiet during the recession, and have stayed that way for years.

“MeadWestvaco, which is a most excellent and capable land developer, acquired the note when it went into foreclosure,” said Charleston Mayor Joe Riley. “What they want to do is go through all of their due diligence and make sure everything is correct.”

MeadWestvaco and its partners have proposed a plan for the AshleyRiverCenter properties, and they are evaluating the Magnolia site.

“The property in many areas still needs to be cleaned up,” said Seeger. “We have to be satisfied it can be done in a way that would allow us to be in a position to acquire title to the property.”

Charleston is ready to press forward. This month Riley started the process of extending by 10 years a special tax district created to help finance redevelopment of the Magnolia site.

Two main concerns

Seeger said an extension of Charleston’s tax increment financing district, and clarity about the scope and cost of remaining environmental work, are the keys to reviving redevelopment of the Magnolia site. “Those are the two major threshold issues we are trying to resolve before we know if the project will be viable,” he said.

Riley agrees that the tax increment financing district, or TIF, should be extended. On May 1 he sent a letter to Charleston County Council and the School Board, seeking their support for a 10-year extension. In a TIF district, the government borrows money to finance development-related infrastructure, such as the $7.8 million bridge built to serve Magnolia. Then, for a set period of time, new property tax revenues generated by the development are devoted to repaying the borrowed money.

The idea is that using property taxes created by the development, to help finance the development itself, can boost economic growth and reclaim blighted areas. Charleston, North Charleston, Mount Pleasant and other governments all use TIF districts to build parks, improve streets and spur development.

“The TIF is critical for making this thing work,” said Robert Clement of CC&T Real Estate, who worked with Cherokee and is now working with MeadWestvaco. “We don’t really have functioning roads or utilities.”

The issue with the existing Magnolia TIF district is that it was created in 2004 and expires in 2029. If the development were to be revived, there would be less time than originally anticipated to repay any TIF debt, which means less could be borrowed to spend on infrastructure.

“If there was a poster child for extending a TIF, I think Magnolia would probably be it,” said Charleston’s Chief Financial Officer, Steve Bedard. “If we don’t get the extension, I don’t think they are going to do it.”

Charleston City Council will consider the extension June 17. The county and school district have until mid-June to make their decisions. Both are currently collecting more information about the TIF, County Council Chairman Teddie Pryor and Charleston School District Board of Trustees Chair Cindy Bohn Coats said.

Environmental hurdles

The other big question for MeadWestvaco is the cost of making the properties suitable for development. Some land in both redevelopment sites has been cleaned up enough for industrial use, but would require expensive additional work if homes were going to be built there, to keep residents safe from lead-contaminated soil and other problems.

“With residential, you’re looking at kids running around a yard, eating dirt, or playing at a playground,” said Ken Mallary, U.S. Environmental Protection Agency site manager for several of the properties. “What you want to do is basically keep potential residents from coming into contact with the first two feet of soil.”

“It’s very doable,” he said.

Craig Zeller, EPA site manager for one of the most polluted properties on the Magnolia site, the Koppers Superfund site, said redevelopment should make the sites safer.

“Development of the property would actually make it more protective by putting down asphalt and driveways and such,” he said.

The Magnolia property has the most serious cleanup issues. The Koppers site is an unfinished Superfund cleanup, and work hasn’t started on the neighboring Columbia Nitrogen site, a former fertilizer plant. Gerald Pouncey Jr., an Atlanta lawyer specializing in environmental and land use issues, has been working for the MeadWestvaco team and meeting with regulators. “What has been discussed with the EPA is the possibility of conducting significant cleanup of the two creosote plumes that still exist (on the Koppers site) – particularly the one in the middle of the property – and cleaning up the soil, and putting a soil cover on the site,” he said. Pouncey said the price tag for that work should be between $14 million and $15 million. “We have a formal work plan that is going to the EPA in the next few weeks,” he said. “That would allow for a clearer determination about whether that number is accurate.”

Seeger said the MeadWestvaco partnership is evaluating land uses similar to what was proposed on the Magnolia site, including housing, though likely with less density. Responsibility for the Columbia Nitrogen cleanup, estimated to cost more than $11 million, is in litigation. The EPA has ordered the cleanup to move forward, and work to remove up to 43,000 cubic yards of soil and sediment tainted with lead and arsenic should begin later this year.

North Charleston

On the Ashley River Center property, more recently dubbed the Baker Business Campus, the MeadWestvaco group approached North Charleston seeking a change in zoning that would allow light industrial development such as showrooms-warehouses and offices. The two EPA-listed sites on the property are now considered clean enough for light industrial development, but a majority of city officials – recalling previous plans that called for homes, shops and parks – oppose light industrial development there.

At a meeting in April, Mayor Keith Summey voted to support revised zoning, but every member of the City Council except Bob King, who was absent, voted against the change. “God’s not making any more waterfront property,” Councilman Ron Brinson said. Summey argued it would be unfair to insist retail stores or homes be built on the site because the location is unsuitable. The site wraps around a nursing home, an apartment building, and a psychiatric facility, but to get there people have to pass through an industrial area near the Lowcountry Food Bank and drive under the interstate. “I would rather see light industrial development that will create jobs for the community,” the mayor said.

Following the City Council rejection, Seeger said the team is re-evaluating what could work on the property. “We thought that what we had proposed was appropriate,” he said. The ongoing environmental issues and developers’ interest in overcoming them illustrate both the desirability of the AshleyRiver land and the extra costs and hurdles involved with developing what’s known as a “brownfield” site.

The Neck Area is not like a suburban subdivision, where developers can cut down trees and build on untainted land. MeadWestvaco is known for suburban and rural projects, including the 12,000 homes and apartments planned at the Nexton development near Summerville, and long-range plans for the 72,000-acre East Edisto properties, most of which is in Dorchester County. But MeadWestvaco also owns a specialty chemical company in North Charleston, and until 2008 operated the large paper mill that dominates the CooperRiver waterfront next to the DonHoltBridge on Interstate 526. The mill and other properties were sold to KapStone. “Certainly, as a company, we’ve had to deal with brownfields,” said Seeger.

The company teamed up with Branch Properties, and Pope & Land, to buy the notes on the Neck Area land and consider redevelopment there. “We’re optimistic that we can get through these issues,” Seeger said. “Otherwise, we wouldn’t be spending our time and money doing it.”

Reach David Slade at 937-5552

New face of Upper King Street: Bars, restaurants take root, spawn Charleston’s first true Midtown

Grace Beahm/StaffCars, taxis, bikes and pedestrians jam Upper King Street at 1:30 on a recent morning. The addition of upscale restaurants and nightclubs draws thousands to the once-struggling strip.

Abigail Darlington

Posted: Saturday, December 7, 2013 10:00 p.m., Updated: Sunday, December 8, 2013 10:24 a.m.

It’s 11 o’clock on a Friday night and Upper King Street is springing to life.

On one corner, an upscale restaurant wraps up its dinner service and transforms into a nightclub with neon lights and thumping party music.

By midnight, the sidewalks are packed with people in their 20s and 30s. Most are beyond the average college age, perhaps because most bars on Upper King Street aren’t aimed at college crowds anymore.

What was once an area with a handful of sports bars, record shops and furniture stores is now home to an array of upscale restaurants, high-brow nightclubs and cocktail joints.

Byron Knight, a homeless man once dubbed the Holy City’s “best street character” by the Charleston City Paper, spends many nights on this street. Most weekends, he can be found outside the bars, striking up conversations with passersby, shaking hands with some he’s known for years. Sometimes, he just comes to watch.

“This is my cable TV,” he says, marveling at the scene on the corner of Radcliffe and King streets. “Over there, that’s Comedy Central,” he points to a group of laughing guys crossing the street, barely missing oncoming traffic.

“That’s the History Channel, and that’s the Food Network,” he says, nodding toward the William Aiken House, then Fish.

“It’s constant change,” he says. “One of those oxymorons that makes sense.”

The burgeoning food and beverage scene is perhaps the most evident sign of how much the nearly mile-long corridor from Calhoun to Line streets has transformed in the past decade into a true Midtown for the city. The changes, along with the construction of hotels, condominiums and a massive mixed-use development planned by The Post and Courier’s parent company, promise to remake a landscape that struggled for years to find its focus.

While the new businesses have brought in millions of dollars to the city of Charleston, the growth also raises concerns about policing the area, its effect on nearby neighborhoods, and the potential for development to uproot and displace longstanding businesses.

Claire Xidis, an attorney, lives on Bogard Street, a few blocks from the bar scene on Upper King. She says the neighborhood is regularly disrupted by noisy people heading home when bars close on the weekends.

“Don’t get me wrong, I love that I can walk to The Ordinary and have fabulous oysters,” she says. “But at the same time, I would like to not get woken up at 2:15 a.m. every weekend after bars close.”

Night moves

Over the past eight years, Upper King Street has witnessed the arrival of about 30 new businesses – primarily bars and restaurants – and the majority have popped up in the past three years.

Rusty Day of James Island is among those drawn to the area by the changes. An adjunct professor of marine biology at the College of Charleston, he spends weekends hopping around King Street to bars such as Cocktail Club or The Belmont.

The area near the City Market that long has been regarded as the center of Charleston’s nightlife is now overshadowed by Upper King, at least for young professionals and other locals, he says. “It’s hard to convince anybody to go out on East Bay and Market streets anymore.”

That’s a big difference from when Day moved to Charleston 13 years ago for graduate school. At that time, he says, “there was no Upper King Street.”

There were some dive bars, such as AC’s Bar and Grill and The Silver Dollar, but the more mature nightlife scene didn’t arrive until the mid-2000s when Chai’s Lounge, a tapas joint, and RAVAL, a Spanish wine bar, opened near John Street.

Karalee Nielsen established RAVAL with business partner Tim Mink in 2005.

“We found a great piece of property up there. It was the right size for the right price, so we decided to gamble on it,” Nielsen says. “I definitely think that we took the risk and then everybody thought it was OK to go up there.”

The business partners closed the wine bar in 2009 and reopened it as Closed for Business, a craft beer tavern. “Most of the businesses up there are just completely different than what they were,” Nielsen says.

Jim Curley, owner of AC’s, has seen the transformation firsthand.

AC’s has been on the street for 26 years, but moved north of Calhoun 13 years ago after a fire damaged its first location, below Calhoun at 338 King.

At the time, Upper King was far from the foodie scene it is today.

“That was a Huddle House,” Curley says, pointing across the street to Basil outside his bar. “There were boards on the windows everywhere you looked. Now it’s a high-rent district with fancy restaurants.”

Investor interest

That’s not a complaint. Business is booming more than ever for AC’s, Curley says. It reaches its capacity of about 160 people most nights, and on weekends it has a line outside the door that often stretches past two neighboring buildings.

“It’s just because there’s a lot going on around here,” Curley says. “Essentially, we have a busy bar on our loyal clientele, and then on top of that we have all that traffic of people bar-hopping.”

The activity on Upper King reflects a citywide trend of a growing and thriving food and beverage industry.

Charleston receives an accommodations tax of 2 cents from every dollar of food and beverage sales. That revenue grew from $9.8 million in 2010 to nearly $11.5 million in 2012 for a 17 percent gain.

The success new businesses are experiencing in the area has drawn significant interest from investors. Though the restaurant and nightlife scene may be the trend on Upper King at the moment, upcoming developments promise to fill in the corridor with a mix of businesses in the next few years.

Patrick Price, a real estate developer with PrimeSouth Group, says demand is higher than ever for space in the area. The vacancy rate is about 2 percent, and investors are dealing up front in cash, he says.

“If you can’t provide the cash, there’s somebody behind you that will,” Price says. “It just shows the level of people trying to get downtown in this area right now.”

In 1989, property on Upper King Street leased for about $6 per square foot, or about $11 in today’s market. Now, properties are leasing for at least $40 per square foot, Price says.

Demand is so high, development has spilled onto Spring, Cannon and other surrounding streets, with trendy bars and restaurants popping up in old warehouses, gas stations and other spots.

The surge of interest in the area means property owners, many of them developers, can afford to be choosy with their tenants.

“We want to get a tenant mix so there’s not just one type of use,” Price says. “It’s considered a food and bev area, but we’re really getting a good retail mix now.”

Locally owned boutiques such as JLinsnider, Magnifilous Toy Emporium and Seeking Indigo have opened on the street in the past few years and more are expected to join them, Price says.

Tim Keane, the city’s director of Planning, Preservation and Sustainability, agrees. “We now have retailers wanting to go on Upper King, retailers that I don’t think one or two years ago would have done it.”

The area

Several complexes planned for the street will feature housing, retail and office space all under one roof.

Elan Midtown, an upscale housing and retail complex under construction at Meeting and Spring streets, is nearly complete.

PrimeSouth Group has plans for two more complexes, including a boutique hotel with a parking deck and office and retail space near the corner of Ann and King streets.

Evening Post Industries, the parent company of The Post and Courier, also plans to begin a 10-year construction project on nearly 12 acres it owns around King, St. Philip and Meeting streets. The development, named Courier Square, would include a mix of housing, office, parking and retail space.

A new Holiday Inn is open on nearby Meeting Street, and five more hotels planned for the area promise to bring in even more foot traffic and potential shoppers.

“In 18 to 24 months you’re going to see a big change,” Patrick says. “And in five years, this area of Charleston will look vastly different.”

The first seeds for this transformation were planted some 40 years ago, as the city sought ways to reverse an exodus of merchants and shoppers from a key urban corridor once filled with a diverse mix of department stores and mom-and-pop shops, many of which were owned by Eastern Europeans and Jewish immigrants.

Joe Riley made revitalizing King Street a centerpiece of his 1974 mayoral campaign, and the city met with great success with the stretch below Calhoun, thanks in large part to the addition of Charleston Place, which drew pedestrians from the then-newly restored City Market.

But Upper King proved a more stubborn obstacle. The city hired consultants, built a Visitor Center to attract tourists, constructed parking garages, opened the street to two-way traffic, improved lighting, buried utilities and updated sidewalks. But for a variety of reasons, plans to remake the area into an antiques district, a furniture mecca or an urban design corridor never quite stuck.

Moving out

Then an unexpected boon came in the form of the bar and restaurant scene, which seemed to follow college students and other urban homesteaders who flocked to surrounding neighborhoods such as Cannonborough/Elliotborough in search of cheap rent and affordable homes.

For many longtime merchants who stuck out the lean years, the transformation has been a mixed bag.

Tom Reid, whose family has operated a fabric store at the corner of King and Spring streets for 100 years, likes having more places to dine and is excited about the prospect of more customers from a hotel being built across the street. “You’ll have people coming from all over the country, and at least some of them will wander across the street to us,” he says.

But nearby Star Beauty Supplies, which has catered to a predominantly African American crowd since 1992, is planning to move. Many of its customers have moved out of the surrounding neighborhoods or are put off by the dearth of parking on the crowded strip, says Cathy Yi, whose family owns the business. They are negotiating with a bar that wants to move into their building, she says.

“If you’re selling alcohol, you’re doing well, but with retail …,” she says with a shrug as her words trail off.

The buzz of the street at night is undeniable, though.

“I drive home on King, and the only place I’ve ever seen so much happening is New York,” says Brooks Reitz, general manager of The Ordinary, an upscale restaurant that took over a former bank building on King. “A year ago it felt like we were in no-man’s land. Now I can walk out the door and eat delicious handmade pasta at Indaco; I can curve around Spring Street and eat fresh flavors at Xiao Bao Biscuit.”

Today, the area has more white tablecloths than ever, and a high-brow attitude has caught on with many of the bars as well. The strip’s gritty image now seems a thing of the past.

Miles Ware, who frequents the street’s night scene, was surprised to be turned away from The Republic Garden & Lounge one Friday night for wearing sneakers and jeans. The nightclub has a strict dress code.

“This is a first for me,” Ware says. “This didn’t used to happen. Not on Upper King Street.”

Glenn Smith, Robert Behre and Hanna Raskin contributed to this story.

Courtesy Post and Courier: http://www.postandcourier.com/article/20131207/PC16/131209503/1010/new-face-of-upper-king