Cleaning projects State program protects developers, spurs reuse of contaminated land

A sign in front of a Monrovia Street warehouse that will be redeveloped as office and retail space outlines the state’s voluntary cleanup program for contaminated properties.

A vacant former fertilizer site that’s seen little use in recent years save its setting for the canceled “Army Wives” TV show soon could spring to life with shops and offices thanks in part to a state program that helps property owners clean up contaminated land.

The initiative, which the S.C. Department of Health and Environmental Control oversees, gives tax and financial incentives to developers who remove pollution they didn’t cause, often at blighted sites, so the property can be put to good use again.

It’s usually difficult to redevelop contaminated property because new owners are afraid they’ll be financially liable for any future problems the pollution might cause. The DHEC program removes that potential liability through a voluntary cleanup contract developers enter into with the agency.

“People normally don’t want to get involved with property that’s contaminated,” said Dana Beach, executive director of the Charleston-based Coastal Conservation League. “It’s a huge disincentive for redevelopment.”

Allowing developers to clean up a site without incurring liability for existing contamination “is tremendously positive and timely because growth in this area is fast-paced,” Beach said.

The program, which protects only nonresponsible parties from liability, has been used at 29 sites throughout Charleston County in the past two years, including an old frozen food warehouse where apartments will rise and a former coal export facility that will become home to a $30 million manufacturing plant.

It also will be used to help turn a former city dump into a mix of homes, shops and offices along the Ashley River.

Worries over potential contamination problems are a key reason Raven Cliff Co. decided to enter into a contract with DHEC after buying the former fertilizer processing site, a 9.23-acre tract at King and Monrovia streets, in the Neck Area. The property, which backs up to U.S. Interstate 26, includes an 80,000-square-foot warehouse that once housed Geer Drug Co. and, more recently, Dixie Box and Crating.

“The liability protection is what we were after,” said Michael Wooddy, a partner in Raven Cliff.

Fertilizer processors operated on the land from the 1880s to the 1950s. Contamination, primarily lead and arsenic in the soil and groundwater, was removed by a previous property owner in 2008, although groundwater monitoring continues. If any related problems should arise in the future, Raven Cliff won’t be held responsible.

Wooddy and Raven Cliff partner Stephen Zoukis are keeping their development plans close to the vest, but Wooddy said the project — being developed under the name Dixie King Street Investors LLC — “is going to be fairly transformative for the area.”

“I can tell you the project is an adaptive reuse of the existing warehouse, and will include several new buildings that we construct on the property,” Wooddy said, adding there will be about 130,000 square feet of office and retail space. The company’s contract with DHEC noted that the site will include “food and beverage related operations” and “outdoor recreation areas” for tenants and their customers.

“Our lead tenant is getting close to announcing their plans to locate to this site, but we’re going to allow them to make their own unveiling,” Wooddy said.

The project has similar characteristics to Raven Cliff’s other project, the nearby Half Mile North development, which includes nearly two blocks along the east side of Meeting Street between Brigade and Isabella streets. It’s where brewpub and restaurant Edmund’s Oast and high-tech e-commerce firm Blue Acorn are located.

Raven Cliff envisions similar tenants at its new project, which has that same “high ceilings, open floor plans, industrial grittiness” feel, Wooddy said.

There are financial incentives to developers who participate in the program, such as income tax credits, the possibility of a property tax exemption and a $1,000-per-worker job tax credit.

“Our goal is to facilitate redevelopment of a property that hopefully will create new jobs and boost our economy, while protecting human health and the environment,” DHEC’s website says of the program.

Developers must submit an application to participate in the cleanup program, and there is a 30-day period in which the public can make comments on the proposed plan. After that, a formal contract specific to the developer’s needs is drafted.

Georgetown-based Agru America — which makes protective liners for landfills and other applications — decided to take part in the program as it cleans nearly 16 acres at the end of Greenleaf Road that is polluted with arsenic. The State Ports Authority, which sold the former coal export facility to Agru America, has agreed to pay up to $400,000 to help clean up the property.

Agru America has agreed to remove or stabilize any contamination that is found. In exchange, the company will be exempt from any third-party lawsuits over any existing contamination going forward.

Louisville, Ky.-based Bowling Green Capital LLC has a contract with DHEC to help clean and monitor petroleum contamination, including benzene, on property at 1805 Meeting St., where a gas station operated for more than three decades until the early 1990s. The property, which has been largely idle since then, will be the site of a multistory self-storage building and truck rental business.

And an Atlanta company has a contract with DHEC to clean lead and arsenic from property on Woolfe Street, where it plans to build a 10-story apartment building. The developer is an affiliate of South City Partners LLC, which is building apartments at the WestEdge mixed-use project near the city’s medical district.

Similar contracts will be signed for development at WestEdge, a $1 billion public-private project that will replace surface parking lots with about a dozen buildings including apartments, medical research space and retail. The first two buildings at the 22-acre site on the west edge of the peninsula — an eight-story apartment complex and an eight-story research and office building — are going through the permitting process.

“Property that would be too challenging for a developer to take on now has the means for the necessary cleanup work to take place,” said Michael Maher, a former urban designer for the city who now is CEO of the nonprofit group overseeing the WestEdge project. “Without a program like this, the purchase of a property that’s a brownfield would be difficult.”

The WestEdge site initially was marshland that was filled in when the city used the property for a municipal landfill between 1955 and 1973. There now is as much as 12 feet of compacted trash — an estimated 1.5 million tons of solid waste — topped by about two feet of soil that will have to be stabilized for construction. Maher said the city, which operated the dump, is considered a “responsible party” and would not be eligible for DHEC’s program.

An adjacent landowner, Rushmark Horizon LLC of Falls Church, Va., has already signed a cleanup contract so it can build a 12-story apartment complex and parking garage on nearly 2.6 acres on Line Street next to WestEdge.

Environmental testing at that site has shown petroleum compounds that may threaten groundwater and methane gas that approaches the lower explosive level in three of four monitoring wells. That level represents the minimum concentration of a combustible gas or vapor, such as methane, necessary to support its combustion in air.

Wooddy, whose company is redeveloping the fertilizer site, said Raven Cliff had never before participated in DHEC’s cleanup program. He admits the project — scheduled for a groundbreaking in January — is in “a hot area,” but it’s likely the redevelopment wouldn’t be taking place if the environmental liability issues had not been resolved.

“Environmental liability can be nasty,” Wooddy said, “and life is too short.”

Reach David Wren at 937-5550.