Charleston to buy mansion for $1.4M after group defaults
By David Slade
Charleston will spend $1.4 million to buy a historic East Bay mansion, after a nonprofit group that received more than $1 million in grants from the city toward renovating the building as a community center defaulted on its mortgage.
In 1993, the city gave the property known as the Josiah Smith Tennent House to nonprofit Elpis Inc.
The Post and Courier
Josiah Smith Tennent House seen this month.
The mansion was little more than an empty shell then, but the grand plan was to restore the building as a community center for the troubled East Side neighborhood.
A well-regarded restoration of the building followed, aided by the community development grants from the city, private donations estimated in the millions, and a $1.73 million mortgage that Elpis took out on the building in 2003.
"There's no sense that there was missing money or anything like that," said Mayor Joe Riley. "It was just an ambitious development plan that they could not pull off."
Elpis, an affiliate of the Rev. Dallas Wilson's Agape Ministries, outfitted part of the building as a dental clinic, helped established a day care center that still operates there, and housed other Agape-affiliated nonprofit groups in the building.
The small front yard of the building, at East Bay and Drake streets, became the Philip Simmons Children's Garden, honoring the master blacksmith.
However, many of the community services planned for the building never took root, and the dental clinic sits empty today.
City Councilman Jimmy Gallant, who was affiliated with Agape Ministries and had an office in the Tennent House until four years ago, said he doesn't know how or why the organization came to default on its mortgage.
Wilson did not return repeated telephone calls and messages left for him starting Friday, seeking comment on the situation.
Elpis also has defaulted on a $45,000 loan from the Charleston Housing Authority, meant to help restore a house on Aiken Street for affordable housing.
Housing Authority Director Don Cameron said that when he heard the city might buy the Tennent House, "the first question in my mind was, will this help the ministry pay us?"
The answer is no, because the city is essentially paying off the remainder of the mortgage, and Elpis will get none of the money.
The nonprofit and the city remain on good terms, however, with the city agreeing to lease the ground floor of the building to Elpis for a dollar, so that the day care center may continue to operate. "People need day care, so I hope we can keep that going," said Councilman Robert Mitchell, who represents the district.
After a City Council meeting Tuesday where the purchase of the property was approved, Riley characterized the end result of the city's involvement with the Tennent House as "very good."
He cited the restoration of the mansion built by Josiah Smith Tennent in 1859 and placed on the National Register of Historic Places in 1979.
The city hopes to reopen the dental clinic, and hopes to lease two floors of the property to nonprofit groups, the mayor said.
Reach David Slade at 937-5552 or dslade@postandcourier.com.
E-mail this story
Printer-friendly version
Comments
majorjohnson (anonymous) says...
So we have a multi-million dollar day care center. Nice. Wonder how many kids it serves? Would be nice to know how many tens of thousands of dollars per child it is costing, how much they charge, if they do, and how many of these kids have parent(s) who actually work as opposed to relieving a multi-mother from familial duties so she can watch Jerry Springer and make more babies. Another fine example of excellent journalism by the P&C.
March 5, 2008 at 7:14 a.m. ( permalink | suggest removal )
Reader (anonymous) says...
Wow. That is wrong, MajorJohnson, for several reasons. First, what we have is a multimillion dollar, fully restored building in an up-and-coming neighborhood for the low, low price of $1.3 million. The empty lot of half the size sold several years ago for $750,000! This was a great financial chance for the City.
Second, the day care center does not cost taxpayers anything. The City is merely agreeing to lease space to the day care center for $1. Note that the building otherwise has lots of empty space in it so you cannot claim that the City's act of charging essentially no rent is COSTING the people money. The City obviously did not turn away any renters.
Third, do you honestly believe that parents leave their children at day care so that they have alone-time to watch TV? That is preposterous. The reason people use day care centers is precisely so that they CAN work.
March 5, 2008 at 7:34 a.m. ( permalink | suggest removal )
mnbvcxz (anonymous) says...
hmmmmm al parish......
March 5, 2008 at 8:08 a.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
It's $1,400,000 to purchase, a $1,000,000 grant from the city, private donations estimated in the millions. That's at least $3,000,000 in tax and private money and you have a day care center. Is it not fair to ask just how many children this $3,000,000 day care facility serves and who it is serving?
What's more, the city originally GAVE the nonprofit this building, which would imply that the city either purchased the property or claimed it for back taxes. That $1,400,000 is to pay off the $1,730,000 mortgage the nonprofit took out on the house to refurbish it, so the city has $2,400,000 tax dollars tied up in a property they already owned, along with a million private dollars. If the city has to borrow that $1,400,000 they will also have to pay interest on the loan, further increasing the cost of a building they originally OWNED and which now contains a day care center to around $4,000,000. Do you think maybe they could have built quite a few day care centers for that kind of money?
March 5, 2008 at 8:31 a.m. ( permalink | suggest removal )
trm2105 (anonymous) says...
Well put Major J. This is the dumbest thing i've heard of. Dumb from the tax paying citizens' point of view, but pretty shrewd from the folks that were obviously in a bad situation.
March 5, 2008 at 8:58 a.m. ( permalink | suggest removal )
OverHere (anonymous) says...
The purpose of government is not real estate investment and with the limited public purpose of this project I would agree that what we have is really expensive day care.
I think $1.4 million could build a pretty substantial daycare for the East Side, while this building could be allowed to pass into the public sector for a more appropriate use.
March 5, 2008 at 8:58 a.m. ( permalink | suggest removal )
trm2105 (anonymous) says...
why the hell isn't the nonprofit identified in this article?!
March 5, 2008 at 9 a.m. ( permalink | suggest removal )
trm2105 (anonymous) says...
agape ministries, is that it?
March 5, 2008 at 9:01 a.m. ( permalink | suggest removal )
Reader (anonymous) says...
Way back in 1993, when the City gave the property to a nonprofit, it was a shell of a building verging on collapse. It's not like the City gave them valuable real estate back then. Let's be generous and say that, when given to the nonprofit, the value of the house was $200,000.
Money was then spent restoring the building (including $1 million from the City through a grant), both increasing the value of the building itself and increasing property values in the surrounding neighborhood (and thereby increasing tax revenues).
Now, the City is investing another $1.3 million in purchasing the house back. The building and property are probably worth $4 million now, conservatively. In fact, that is probably very conservative given that the Cigar Factory across the parking lot just sold for several times that amount and is being redone as luxury condos.
So, the bottom line is: The City is coming out WAY ahead on this deal.
Is it fair to ask how many kids are going to the child care center? Sure. But you also have to remember that the City did not just acquire a child care center for its money. Apart from the huge profit the City is making on this, it is also buying a building with lots of potential for other uses as well. Remember that right now, about 80% of the building is vacant.
It is not fair to describe the cost of the day care center as $1.4 million (OverHere), because the City has used its money to buy long-term equity. That is, the City still has all of the money it has invested in this building; it is just in the form of an historic building instead of cash on hand. If the City wants to sell this back on the private market, it can easily recoup all of its expenses and then some.
March 5, 2008 at 9:31 a.m. ( permalink | suggest removal )
bluecap (anonymous) says...
Uh, Reader...
Lend me $20.
But only give me $10 of it.
That way I owe you $10 and you owe me $10, so we're even.
March 5, 2008 at 9:37 a.m. ( permalink | suggest removal )
Reader (anonymous) says...
Bluecap -
I'll loan you $100 now if you agree that, one year from now, I can give you another $100 in exchange for a brand new $1500 television set.
That is the relevant analogy.
Forget about the use of the building or the identies of the owners or the means of the transfers of money or anything else. At the end of the day, the City has spent less than $3 million and now has a building worth far more than $3 million. I'm no accountant, but I just don't see how that is a bad outcome for the taxpayers.
March 5, 2008 at 9:52 a.m. ( permalink | suggest removal )
Larz13 (anonymous) says...
Time for the City to put the property up for sale to the highest bidder. There are probably easements protecting the historic nature of the property so with the sale, the city could protect the property and pocket the profits and start to collect market-rate taxes on the property while the new owner can renovate and lease the units, thus increasing the value and also increasing the tax receipts.
Isn't that easy?
March 5, 2008 at 10:38 a.m. ( permalink | suggest removal )
kerwin1959 (anonymous) says...
I went to the Charleston County on-line tax system, which would normally have the assessor's value of the property for tax purposes. The value shown is *surprise* $0.00! Even if the non-profit is exempt from paying property taxes, the value should still be shown. Without a tax assessor's value, the only way we'll know what the fair market value(FMV) is when an outside appraisal is done, which is not public record.
However, from the photograph shown and the estimated square footage, I would think $1.4M, even $2.4M would be a good bit less than the FMV, assuming the work done to restore the property was good quality workmanship -- I wonder how much the "hysterical" society & city inspectors inspected the restoration to insure that it met the building/historical codes?
And, lest we forget, no property taxes have been paid on the property since 1993, when the city deeded the property to the non-profit.
March 5, 2008 at 11:57 a.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
Well why don't you take the property reader, refund the millions of tax and private dollars that have gone into it, let the day care stay there, and then consider it a profit and asset instead of millions of your dollars. It's not like you have anything to do with 2.5 million dollars anyway, it's just sitting around in your bank vault wasting away.
And dollars to donuts this will never be sold for private development and put back on the tax rolls. If the city does sell it they will probably spend any profit plus some buidling a new day care.
March 5, 2008 at 12:04 p.m. ( permalink | suggest removal )
outrage (anonymous) says...
Is the non-profit going to be audited for possibly misappropriating funds?
March 5, 2008 at 12:44 p.m. ( permalink | suggest removal )
ticket3477 (anonymous) says...
If its a free daycare...I bet most of the kids are there bc the mothers need a break from them..not because they are out working. Thats why they are in government housing...bc they all have part-time crap jobs that pay nothing cos all they want to do is screw around (literally).
March 5, 2008 at 3:56 p.m. ( permalink | suggest removal )
Reader (anonymous) says...
MajorJohnson wrote, "Well why don't you take the property reader, refund the millions of tax and private dollars that have gone into it, let the day care stay there, and then consider it a profit and asset instead of millions of your dollars. It's not like you have anything to do with 2.5 million dollars anyway, it's just sitting around in your bank vault wasting away."
You've misunderstood my position. I don't agree that holding lands for the public is ALWAYS a bad idea. After all, would you have us sell parks off for development? However, unlike a park, holding commercial real estate is not really in the traditional public use. So, I am in favor of selling this off.
My position, however, was to point out that I completely disagree with the earlier posters who not only think that holding the land is a mistake, but who think that even buying it was a bad idea in the first place regardless of what it done with it. I simply do not see how anyone can argue that the decision to acquire an asset at below value is a bad idea.
March 5, 2008 at 4:33 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
My point is that Charleston owned it to begin with reader and ended up spending $2.5 million dollars, plus over a million private dollars, to get it back after giving it away. Some private folks actually gave up at least a million dollars here. If the city was able to acquire it below market value now, why didn't some private profiteer get to bid? Why wasn't it offered up to the private market? Was it and there was no market for it so this is a buy out by the city that the private profit driven market wouldn't touch? I'm just curious is all...something smells like last weeks fish here.
And no matter how you want to see it...right now it's a 3 million dollar historical building that is a day care center with a bunch of unused space. If Charleston owns it it's better to use it for a day care center than let it just sit, but if I owned it it would be better to let it be used as a day care center than let it just sit...it would still be a 3 million dollar day care center.
March 5, 2008 at 8:12 p.m. ( permalink | suggest removal )
burton (anonymous) says...
What ever happened to the original idea of using it as a community center? That would have been great for the kids on the East Side. Hmmmmmm...
March 5, 2008 at 8:12 p.m. ( permalink | suggest removal )
Reader (anonymous) says...
I don't know why it was not put up for public auction. Or maybe it was and the City held leasehold rights which prevented someone from bidding on it. I don't know, and the article was skimpy on the financial details.
I don't have any sympathy for the private contributors. They voluntarily gave their money for the restoration of the building, and it got restored. They were never, to my knowledge, holders of any sort of secured interest in the property.
I agree that the City has about $3 million invested in a building which just so happens to be used as a day care center, but that is not exactly the same as saying that they have $3 million invested in a day care center. Best use? I have no idea. But, at the end of the day, the City can recoup that money easily.
Let's hope that the City puts this back in private hands quickly. I suspect, as someone noted above, though, that that is unlikely to happen.
March 5, 2008 at 8:27 p.m. ( permalink | suggest removal )
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.
Users can now build user-to-user connections, follow friends' recent posts, add an avatar that fits their personality, and more. If you have posted here before you'll need to sign up again, or if you've never posted before, start now by signing up!
Thank you for your interest in this story. The comment thread for this article has been closed.
- Most Commented
- Most Emailed
- Shared
- Upper King on rise: Hotels, apartments, restaurants changing face of downtown area
- UPDATE: Missing woman's fiance seen leaving scene of burned SUV, carrying a shovel
- Missing woman case gets murkier
- Magnolia Gardens offering free dream wedding to contest winner
- Body of missing woman's fiance was found near handgun
- DAVID SLADE: S.C. offers hybrid car tax credit
- Pinterest: Pinning hopes and dreams
- Ex-Boeing worker claims racism, retaliation in firing
- Black women today: Strong. Resilient. Ambitious.
- MCDERMOTT COLUMN: Golf business has risks, rewards
