Summerville hotel project’s costs soar, mayor says

Provided ¬ The final rendering of The Dorchester, approved in May 2015. This shows the project along South Cedar Street. The hotel entrance is on the right.

While a lawsuit to stop a Summerville hotel project wends its way through the courts, the cost to build it has soared, the town’s leader says.

The town’s portion of the public-private partnership has almost tripled from the original estimate nearly two years ago, Mayor Wiley Johnson said.

Town Council will have to grapple with addressing those rising costs if the project is upheld by the courts.

The Dorchester hotel project was supposed to start construction six months after final approval from the town’s Board of Architectural Review, which came last May. But that work was delayed after a lawsuit was filed by residents who claimed the town violated federal, state and local laws when it struck a deal with Applegate & Co.

Circuit Judge Edgar Dickson heard arguments on the case in January, but he has not ruled.

Originally estimated at $28 million, the project would include a hotel, high-end condominiums, a roof-top bar, restaurant and retail space, a parking garage and conference center on 2.2 acres at Cedar Street and Richardson Avenue.

When the agreement was signed in July 2014, Applegate planned to kick in $20 million, with the town contributing a $5.2 million grant to Summerville Redevelopment Corp., which is made up of council members, for the project. In addition, the town planned to extend Applegate a $3.75 million gap loan that would be interest-free for two years.

But Johnson said the project is up to about $47.9 million.

The town’s portion — for the 179-space parking garage and 10,000-square-foot conference center — has risen to $9.85 million, he said. The events facility and garage would be owned by the town but managed under contract.

“I feel the public needs to be aware of the updated information on this project,” Johnson said. “It is what it is. It’s not like I’m inflating the numbers. They came from Mr. Applegate.”

Arthur Applegate declined to comment Monday.

Peter Gorman, the mayor’s unpaid adviser and a former plaintiff who dropped out of the lawsuit, said, “Frankly, the increased costs are not only shocking, but seriously call into question the viability of the project, which was always shaky anyway.”

The increased construction costs are a sign of the Lowcountry’s recovering economy, said Skylar Ashby of Palmetto Construction, past president of the Charleston Contractor’s Association.

“Costs are going up, and people are getting busier,” he said. “There’s less and less availability of (subcontractors). If you’re stretched out to do something, it means you’re going to have to get paid more to do it.”

Supporters of the project say it will bring visitors and help revitalize the downtown area. Town Council members who have supported the project declined comment this week, citing the pending lawsuit.