Tract foreclosure can proceed

One of the biggest-ever foreclosures in the Lowcountry can wind its way toward a resolution now that a settlement has been reached between two of the adversaries in the case.

At stake is the ownership of the financially troubled Carolina Park development in the north end of Mount Pleasant. Bogged down in the real estate downturn, the proposed mixed-use project encompasses 1,200 acres of prime land along U.S. Highway 17.

The value of the mostly undeveloped tract has been appraised at more than $150 million.

At a hearing Thursday, two sparring groups with tens of millions of dollars on the line told a judge that they have reached a tentative agreement that will allow the foreclosure of the property to proceed.

As part of the deal, a court-supervised sale of the land will not take place before May 18, attorneys for both sides told Charleston County Master-in Equity Mikell Scarborough. Other details were not disclosed.

Scarborough said he would sign an order approving the settlement when all the terms are finalized.

"I'm happy to approve it," he said.

The agreement is between CDM of Charleston LLC, which was the previous landowner and remains a big investor in Carolina Park, and a lender called Palmetto Debt Holdings LLC.

The two sides negotiated a "bare-bones" consensus this week, said Palmetto Debt attorney David Swanson.

"We had sort of a marathon meeting yesterday with all the parties involved," Swanson said in court Thursday.

Led by Ben Marino, CDM had been fighting the foreclosure that was filed last summer by Palmetto Debt, which controls the $25 million first mortgage on the property. CDM's competing interest is the $22 million it has borrowed under a second mortgage, with the land serving as its main collateral.

Marino, who attended the hearing, said afterward that he was prohibited by confidentiality agreements from discussing the settlement and other aspects of the case.

Known for years as the Marino tract, CDM sold the property to a development group called Carolina Park Associates in 2004 in a deal valued at nearly $25 million, according to property records. The project took years to get off the ground because of numerous political and economic hurdles.

In all, about seven parcels totaling 112 acres of high land have been sold off to various buyers. Those properties are not affected by the foreclosure.

Financial troubles surfaced last June when Carolina Park Associates stopped making payments on a $25 million loan balance, according to court records. In August, Palmetto Debt Holdings acquired that loan from the National Bank of South Carolina for an undisclosed amount. It then filed a lawsuit to take ownership of the valuable tract.

CDM filed a counterclaim to block that effort.

As complicated foreclosures go, the Carolina Park case has sailed through the system relatively quickly. Scarborough suggested that the fast-track scheduling helped push CDM and Palmetto Debt toward a settlement.

"Sometimes a court date can make things happen," he said.

What will become of Carolina Park after the foreclosure sale is unclear. The original plan called for several million square feet of commercial use and about 1,400 residences.

Some elected officials in Mount Pleasant have expressed interest in renegotiating the existing development agreement that dictates what can and can't be built on the property.

Reach John McDermott at 937-5572 or jmcdermott@postandcourier.com.