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.
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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.”
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.