999 Morrison Drive

The Charleston Digital Corridor says it expects to break ground on a new office building for technology companies later this year at 999 Morrison Drive. The city, which owns the land, is readying the plot for a new park-and-ride service. Thad Moore/Staff

Much of the hype around Charleston's startup scene has focused for years on a parking lot on the east side of town.

The city has long planned to replace rows of cracking concrete on Morrison Drive with a sleek office building for its nascent technology sector.

The plan was to plant a flag in the upper reaches of the peninsula, a signal that a pocket of low-slung warehouses and light industry could become a hip tech hub. The city paid $1.8 million for two acres to spur the project.

In the years since, that area of town has surely become hip, thanks to an explosion of breweries, trendy restaurants and high-end barbecue. The tech ambitions have crystallized, too: The city's first two tech-oriented developments were built less than a mile away.

But the parking lot at 999 Morrison Drive has gone undeveloped.

That could begin to change later this year. The Charleston Digital Corridor — an economic-development group driving the project — says it has finally lined up the pieces it needs to start work on the building, known as Flagship 3.

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Edmund's Oast Brewing Co. is in the Pacific Box & Crate development on the King Street Extension. The upper peninsula has transformed into a hip pocket of restaurants and tech offices. File/Wade Spees/Staff

Director Ernest Andrade has ambitious visions for the project — an office building that blends pay-by-the-seat desks for fledgling startups with big suites for established tech companies. He thinks it could give out-of-town tech firms a place to land, and he thinks it could be the most youthful, vibrant office space in the city.

That vision is much like the plan the group initially laid out five years ago, back when the building was expected to open in the summer of 2016. This time, Andrade says, it's in motion.

To get this far took years of wrangling competing interests: The city wanted a tech-only office, but lenders wanted flexibility if the economy takes a turn. And the project hasn't cleared its final hurdle just yet. It still needs to pass muster with city’s architectural review board.

If the schedule holds, workers will turn the first soil on the $42 million project by the end of the year, and the Digital Corridor's marquee building could open its doors in early 2020.

By then, it will no longer be the genesis of the city's tech hub-to-be. But it could be the bookend.

Moving up

Building the Lowcountry's startup scene on the upper peninsula made sense for plenty of reasons.

Morrison Drive was once the city's motor mile, and the abandoned car dealerships left room for new development. The backbone of the city's Internet infrastructure runs nearby, so it's easier to find speedy downloads. It's outside of Charleston's historic downtown, so the city is open to modern offices.

That was the idea the Charleston Digital Corridor outlined in 2013, and it's one that private developers have taken up since.

Raven Cliff Company has so far led that charge. Its chief executive, Steve Zoukis, says he saw loads of potential in the area: It had cheap land, a street grid primed to create an urban core and easy access to Interstate 26.

In the tech sector, he saw a chance to develop something distinct from the straight-laced law offices and banks downtown.

Its Half Mile North development converted empty warehouses that now house modern tech companies like the e-commerce development firm Blue Acorn and the bookkeeping startup Ceterus. Its Pacific Box & Crate project replaced a shuttered packaging factory with the real estate tech firm BoomTown and the cybersecurity startup PhishLabs.

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The cybersecurity startup PhishLabs is headquartered in the Pacific Box and Crate development. The office park is an anchor of the upper peninsula's emerging status as the hub of the region's tech sector. File/Thad Moore/Staff

Zoukis says the private sector has picked up the mantle of developing a tech office hub without city assistance, but he'd like to see 999 Morrison developed all the same. The land, purchased by the city in 2013, could break up a long row of warehouses and form a gateway to the upper peninsula.

The Digital Corridor building, for one, would pull the boundaries of the tech cluster farther south to Conroy Street, closer to the base of the Ravenel Bridge. A lab run by the S.C. Research Authority forms another bookend a few blocks east on Meeting Street.

"Making something happen on those sites will be very helpful," Zoukis says of the Digital Corridor property and others near it. "I hope something good happens, and I hope it happens soon."

The corridor's project is slated to be developed by Charleston-based Iron Bridge Capital Partners, which will be tasked with filling the six-story, 70,000-square-foot building. The Digital Corridor plans to lease at least one floor, giving it space to rent to more companies than it can now.

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And with more offices upstairs, emerging startups could have a place to land when they outgrow their co-working space downstairs. Iron Bridge managing partner John Hand didn't respond to a request for comment, but on its website, the firm describes "significant" interest from "local, national and international tenants."

"What the new building represents is the ability to increase an already successful program in a pretty dramatic way," Andrade says. "We will have as much capacity as we really need."

Making other plans

The move isn't entirely the group's choice, however.

The group established its model of renting to startups in 2009 in a former TV studio near the South Carolina Aquarium, but its offices are in line for demolition soon. Its spot on the corner of East Bay and Calhoun streets is expected to become a timeshare rental building.

The organization plans to lease a temporary office in the meantime — it hasn't decided exactly where — while its new home is completed.

The delays appeared to rankle Charleston Mayor John Tecklenburg in December when the city adjusted its lease with the Digital Corridor. The city gave the group a longer ground lease and loosened restrictions on what kinds of companies can rent space in the new building.

Tecklenburg ultimately voted to approve the changes, and in a statement, he called the project "a win-win for our community." The development includes an 800-space parking garage that the city will buy, a feature that Iron Bridge says will "de-risk the investment."

"We are excited to see this project move forward," Tecklenburg said.

And with Charleston's notoriously slow-moving approval process still to come, the city is making other plans for the parking lot it's supposed to take over. It's spending $40,000 to repaint the old lot, put up lights and use it as the base for a new park-and-ride shuttle for downtown hospitality workers.

That system is expected to begin in the next month while the city seeks out a permanent base for the bus plan. Andrade says the corridor has to give the city three months' notice to clear out once construction is ready to begin.

Until then, the tech scene's aspiration will still be a parking lot — even if it has fewer cracks.

Reach Thad Moore at 843-937-5703. Follow him on Twitter @thadmoore.

Thad Moore is a reporter on The Post and Courier’s Watchdog and Public Service team, a native of Columbia and a graduate of the University of South Carolina. His career at the newspaper started on the business desk in 2016.