Plan for high-end Johns Island development, financing strategy stir controversy

A view of the Kiawah River from part of the acreage owned by the Beach Company that they want to develop. The 2000 acres of land they own is on Johns Island and sits on the Kiawah River. (Grace Beahm/postandcourier.com) Buy this photo

JOHNS ISLAND — Kiawah River Plantation on the southern end of this rural island probably doesn’t look much different today than it did centuries ago.

A ride in a truck along the 2,000-acre property’s dirt roads and earthen causeway reveals striking views of the Kiawah River, brackish and saltwater ponds where birds rest on pieces of exposed driftwood, and wild deer and turkeys running freely through waterfront forests.

The site near Mullet Hall soon could become home to the island’s largest subdivision and tourist destination, much to the delight of developers hoping it will be the spark that ignites the area’s economy, and the chagrin of long-time local residents who continue to fight to preserve the island’s rural character.

Charleston County now is considering a plan that in effect would give the Beach Co. the go-ahead for the massive development of about 1,200 high-end homes, a hotel and golf course by taking on the responsibility for building and operating a sewage treatment plant, and adopting a controversial plan to pay for it, along with other property improvements. Charleston County Council’s vote last month to consider creating a “tax-increment financing district” to pay for $84.5 million in improvements at Kiawah River, including the $11.5 million wastewater treatment facility, has stoked complicated discussions on whether the southern end of Johns Island should be developed in the first place, and whether financially accommodating high-end developments such as Kiawah River pits black against white and rich against poor.

All about sewer
If the county approves the sewer plant in the special financing district, it also must operate it, or hire someone to run it, county Planning Director Daniel Pennick said. And the Kiawah River development would mark the county’s first foray into the sewer business. “It could set a precedent,” he said. “It’s the first time the county has had to face that.”

The move would leave the Beach Co. poised for access to a publicly run sewer system, the holy grail for Charleston-area developers hoping to build subdivisions in rural areas. Such areas often are too far from the city’s wastewater system to efficiently connect to it.

Kevin O’Neill, vice president of development for the Beach Co.’s subsidiary Beach Development, said it would not only be expensive to have a private company build and run a wastewater treatment facility, but such a plant would be less likely to garner necessary approval. Groups that regulate sewage facilities often frown on smaller, privately run plants, he said. That stems from a history of smaller plants that were turned over to homeowners’ groups and then not properly maintained, he said. “It left a bad taste and a lack of trust.”

Megan Derosiers, associate director of the Coastal Conservation League, said her group is opposed to the county approving the special financing district and the biggest issue is the sewer plant. “They’re risky endeavors” environmentally and financially, she said, And the league is worried that other developments would hook up to Kiawah River’s plant, which would promote sprawl on the island.

Eat what you kill
O’Neill said his company needs the county to approve the financing proposal, known as a TIF, if it is to move forward with its current plan for the project. Under the proposed TIF, improvements such as the wastewater-treatment facility would be paid for by a portion of future tax revenue generated by the development. The county wouldn’t be losing money in the deal, he said, because there would be no property-tax revenue generated if the development wasn’t built. “It’s an eat-what-you-kill scenario,” O’Neill said. “The sewer and the county approval (of the TIF) is the key,” he said.

Pennick said only the $11.5 wastewater treatment plant would be paid for with property-tax money that otherwise would go to the county. But the county would as act as a “sponsor” for the entire $84.5 million district. The rest of the money would come from taxes destined for the St. Johns Fire District, the Charleston County Parks and Recreation Commission and the Charleston County School District, O’Neill said. The largest share of about 66 percent would come from the school district. His group has been involved in ongoing discussions with those taxing entities, he said, and they are receptive to the idea of the TIF.

It’s important to move forward with the project, O’Neill said, not just for his company but for Charleston County. Today, he said, the Kiawah River property generates about $3,000 per year in property taxes for Charleston County. If the proposed development is completed as planned, it would generate between $13 million and $15 million per year, he said.

The development not only will increase the tax base, it will bring in 750 to 900 jobs per year, he said. And it will operate like an economic development tool. “In some respects, it will be like a small-scale Boeing.”

He also said the development would be sensitive to the Lowcountry environment. The reason people would buy homes there is because of the natural surroundings and the views. Harming those would make the development less profitable.

Not buying it
Johns Island farmer Thomas Legare said the Beach Co. has “a lot of nerve asking for $84 million in subsidies for a private development.” He thinks the county would be “opening a flood gate” by approving the TIF. “Everybody and his brother is going to be asking for one,” he said. “I need a new tractor, some fertilizer and seeds. Is the county going to create a TIF for me?”

Island resident Bill Saunders, called the plan “one of the worst ideas I’ve seen in a long time.”

He’s especially bothered by the company stating it would include 117 units of workforce housing in the development. Saunders, who is black, said that reminds him and other island residents of slave quarters. “It’s sort of emotional for us,” he said.

Both Legare and Saunders regularly oppose projects they think will spur too much development on Johns Island including the extension of Interstate 526 and the Sea Island Greenway, a road which would bisect the island.

Development inevitable?
County Councilman Elliott Summey, a developer, said he supports the plan for Kiawah River Plantation. The county can’t lose money on the plan because it only involves funds the development generates, he said. “The problem is a lot of people don’t understand it and they’re afraid of what they don’t understand.”

Proper development is good for the Charleston area, he said. If an area doesn’t continue to grow, it begins to die. And financing plans such as the Kiawah River TIF are really the only way to get developments off the ground, he said.

The people at the Coastal Conservation League and others who oppose the development don’t get that, he said. “They live in Utopiaville.”

But Councilman Dickie Schweers, the only council member to vote against further consideration of the Kiawah River plan, said something will be built there, whether or not the county approves the TIF. The county could be talking about bringing in money through impact fees, he said. Instead, it’s talking about giving subsidies.

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

Comments { }

Postandcourier.com is pleased to offer readers the enhanced ability to comment on stories. We expect our readers to engage in lively, yet civil discourse. Postandcourier.com does not edit user submitted statements and we cannot promise that readers will not occasionally find offensive or inaccurate comments posted in the comments area. Responsibility for the statements posted lies with the person submitting the comment, not postandcourier.com. If you find a comment that is objectionable, please click "report abuse" and we will review it for possible removal. Please be reminded, however, that in accordance with our Terms of Use and federal law, we are under no obligation to remove any third party comments posted on our website. Read our full Terms and Conditions.