Charleston weighs freeze on downtown hotel projects

Clustered around Marion Square, Bennett Hospitality’s proposed hotel is going up on the former Charleston County library site (foreground, crane) on Monday, an Embassy Suites hotel is open in the former home of The Citadel (center, pink) and Dewberry Capital's is renovating the former L. Mendel Rivers Federal Building into an upscale hotel (background, right). Wade Spees/Staff February 22, 2016

On the campaign trail last year, Charleston mayoral candidate John Tecklenburg caught flak for proposing a moratorium on new hotels downtown. Now that he’s taken office, the temporary ban is on the agenda.

City Council is expected to vote Tuesday on an ordinance that would block any new hotel projects on the peninsula south of Mount Pleasant Street, at least until early next year.

The vote comes in the wake of a burst of new downtown hotels either built or on the drawing board.

The proposal says 4,826 new hotel rooms have been built or are under construction — and 11 more hotels, with 763 more rooms, already have the necessary zoning approval.

None of those would be affected, only brand-new projects.

In downtown Charleston, last year saw several hotel openings.

The 41-room Spectator, located on State Street, and the 50-room Grand Bohemian on Wentworth and Meeting streets opened south of Calhoun.

On Upper King Street, two new Hyatts opened with 304 rooms.

Too many hotels “will discourage the diversity of experience that has made it (the peninsular city) successful,” the proposal says. The moratorium would allow the city’s Department of Planning, Preservation and Sustainability to study how more hotels would affect the city’s balance — and whether further zoning restrictions are needed.

Tecklenburg proposed the moratorium one day after he qualified for the mayoral runoff race.

His opponent called the idea an “arbitrary job killer,” and Bryan Derreberry, president and CEO of the Charleston Metro Chamber of Commerce, warned against it at the time.

Reached Monday, Derreberry said the chamber still dislikes a moratorium because it can do more harm than good in the long run. “It creates a ripple effect that can harm the city’s reputation among companies and investors seeking to conduct business and make additional investments in Charleston,” he said.

It’s unclear what will happen Tuesday.

City Councilman Dean Riegel said he plans to vote against it because he considers moratorium “a harsh word,” adding the city hasn’t had enough dialogue with hotel developers.

“It’s just a reaction to the downtown crowd — I call them the South of Broad crowd,” he said. “I don’t think it’s a slam dunk.”

Meanwhile, City Councilman James Lewis said Monday he hasn’t made up his mind.

“I’m just in between right now,” he added.

The president of the South Carolina Restaurant and Lodging Association, based in Columbia, said the association does not have an official position on the issue and had not talked recently with its Charleston members.

“As a general rule, we have concerns about any measure which places a moratorium on any aspect of our industry,” John Durst, the association’s CEO and president, said in an emailed statement.

“The city of Charleston and the Greater Charleston area have earned the reputation of being a world-class destination, and we would be supportive of any measure which might further enhance that well-earned reputation. But, by the same token we would be opposed to any measure which might be determined to be detrimental to that reputation.”

Wayne Smith, chair of College of Charleston’s department of hospitality and tourism, said he doesn’t think those in the hotel industry will suffer too much from a moratorium through the rest of this year.

“Hotel projects take so long to build, to be honest with you, that I don’t think through the end of the year is going to delay anyone really substantially,” he said.

A moratorium could give the community a “breather,” Smith said.

“I do think it gives the opportunity for the market with all the new product that we have had to sort of figure out what’s going on and see where the value lies, both for the hotels themselves and also the community.”

As to whether the market is too saturated, Smith wasn’t sure.

But managing tourism can be hard, he noted, and the Holy City has been a good example of how to do it.

“Tourism has either been allowed to go rampant where it overruns the community ... or it’s not managed well enough and it dies out,” he said. “Finding that middle ground is really, really challenging for our leadership ... Traditionally, they’ve done a really, really good job.”

Smith called Charleston one of the best examples of managing tourism across the globe. Before joining the staff of the College of Charleston, he spent time doing work related to tourism development.

“Charleston is probably the best case I’ve ever seen of managing tourism appropriately,” he said. “It just really is.”

Reach Robert Behre at 843-937-5771 or at twitter.com/RobertFBehre.

Reach Allison Prang at 843-937-5705 or follow her on Twitter @AllisonPrang.