Fetter Health Care Network is being sued for allegedly failing to pay nearly $60,000 in monthly rent payments and $254,998 in renovation costs for space at the former Charleston Naval Hospital in North Charleston.
The former hospital at Rivers and McMillan avenues was being renovated by private investors as a center for health care services. Lenders for the project filed a foreclosure lawsuit against the developers in March after Charleston County canceled plans to lease three floors of the 10-story building.
The developer, Utah lawyer Douglas Durbano and his South Carolina company Chicora Life Center, has threatened to sue Charleston County but so far has not. Chicora Life Center filed suit May 6 against Fetter, alleging the health care provider failed to move in and start paying rent in January.
In addition to rent, the Chicora group is suing for $311,294 that it claims was spent renovating the space for Fetter. That includes $56,296 the developer had agreed to pay toward preparing the rental space, plus a much larger amount charged to Fetter.
“Fetter Clinic has not paid any portion of the monthly rental or excess costs despite notice and multiple demands,” Chicora wrote in the lawsuit.
Chicora also states that it is entitled to more money because Fetter owes the life center a “duty of good faith and fair dealing” after allegedly breaching the contract, according to the lawsuit. That amount should be determined at trial or after a review of the records, Chicora wrote.
Calls were made to Fetter’s main office and to Chicora’s lawyer, but neither were returned.
The former hospital, facing foreclosure, is unoccupied. Charleston County Council had previously agreed to be the anchor tenant, and the developers used that promise of rent to secure loans.
Redevelopment of the former hospital, the tallest building in North Charleston, was seen as a way to revitalize the city’s struggling south end.
The council’s decision to back out came after more than a dozen contractors claimed that their bills had not been paid by Chicora, and move-in dates for the county were repeatedly changed. The loss of the project’s main tenant, along with the developer’s alleged failure to make loan payments, prompted lender UC Funds of Boston to foreclose on the property and claim more than $15 million in unpaid debt.
In 2014, the Fetter Health Care Network, which primarily serves low-income black patients, planned to sell its flagship property on Meeting Street for at least $4 million. But the Board of Directors changed its mind and decided to keep the downtown location up and running.
Reach Derrek Asberry at 843-937-5517. Follow him on Twitter @DerrekAsberry.