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County Council. January 17

Developing a plan for the naval hospital site
From where will the money come?
Warwick Jones

The purchase of the old naval hospital was ill-fated. Originally, the County was to lease space which it and government agencies would occupy. The owner failed to provide the necessary space in the stipulated time, the County terminated the lease, the developer filed for bankruptcy and for reasons we donít fully understand, the Court awarded the developer damages. These damages were satisfied by the purchase of the property by the County for $33 million. OK, it was a little more complex than but that was the essence.

The $33 million purchase was a burden on the County considering its General Fund budget for this fiscal year is $240 million. But the financial burden is heavier because the buildings on the site have little or no economic value and are of no use to the County.

At the Councilís last meeting, staff presented a plan for the 23 acre site. The naval hospital would be demolished and a 50.000 square foot building would be constructed. This would provide the space requirements of both the County and agencies. The building, parking and related facilities would occupy about 7 acres. Construction should be completed by the fall of 2021 and the cost was an estimated $44 million.

CARTA will occupy another 3 acres and will construct a transit station. The cost is an estimated $3 million and it too should be completed by fall 2021.

So 13 acres will remain and how they will be used or developed is uncertain. But from discussion on Council, it is hoped that the new County building, the CARTA transit station, and the planned Bus Rapid Transit (BRT) between Charleston and Summerville will encourage greater interest in the area. This in turn will lead to more rapid economic development and an opportunity for the private sector to develop the remaining 13 acres on the site. Mention was made of housing and retail.

Council member Rawl noted that North Charleston had tried in the past to revitalize this depressed neighborhood and had failed. The area lacks a large scale grocery store and despite incentives, the City had failed to attract one. How could the County be sure that private developers would be interested in developing any part of the remaining 13 acres? It was a good point and we thought the answer from one of the consultants was unconvincing. He thought the County and CARTA buildings would anchor the site and the planned BRT would catalyze growth. It may be a long wait as the BRT is unlikely to be running until 2025 and any significant increase in the area's population will require more than a BRT system, in our view.

So how will the County fund the demolition of the naval hospital and the construction of a new building which staff estimate will cost $44 million? We donít know but almost certainly, it will be looking to the proceeds from the sale of 995 Morrison Drive. Its location in a rapidly growing part of the City of Charleston ensures a hefty value. But as it is also the key to the access and development of a residential community off Morrison Drive its value could be spectacularly enhanced. We can only guess at its value but a sale would go a long way in financing the new building of Rivers Avenue.

A decision to go ahead with demolition of the naval hospital building is expected within the next month.