Plan for Market-area hotels sparks legal battle

A developer is facing opposition over its plans to add two 50-room hotels near the City Market. One would replace a paved parking lot on Anson Street. The other is proposed for Market Street, next to the Rainbow Market Shops.

The owner of two buildings on East Bay Street in Charleston has filed two lawsuits against the city for approving a pair of hotels near the City Market, saying the projects would hurt property values.

The plaintiff, 241-243 E. Bay Holdings LLC, also named the developer in the complaints.

The company said its office buildings are near the properties at Anson and Market streets where Rainbow Market Group LLC wants to build the two 50-room lodgings.

The Board of Zoning Appeals approved the projects Feb. 2, but 241-243 E. Bay said in its lawsuits that the applications contained “numerous shortcomings and deficiencies.” The company is asking the court to vacate the approvals for both hotels.

The East Bay property owner also said Rainbow Market Group doesn’t provide the minimum 34 off-street parking spaces, and that the builder’s traffic study “was inadequate and failed to take into consideration the impact” of other planned developments in the immediate area, including other new hotels, according to the complaints.

It also said Rainbow Market Group’s plan to park vehicles by using vertical stackers is impractical and violates city code.

The company said the value of its properties will be adversely affected by the increased traffic, congestion, noise, parking violators and other “damaging effects.”

At least one other new hotel is on the books for that section of the city. Hospitality Development Services is seeking design approval for a 50-room property on the south side of the Market at Cumberland, Church and Linguard streets.

The city rejected the Rainbow Market Group’s first proposal last year, saying the two lodgings the company wanted to build were, in essence, a single 100-room hotel. There is a limit of 50 rooms for hotels in that area of the peninsula.

The plans were then revised, and the city zoning board approved them.

Attorney G. Trenholm Walker, who represents 241-243 E. Bay, said in an email that his “client does not have any press comments at this time on the pending legal proceedings.”

Frances Cartwell, an attorney for the city, said the city will defend the zoning board’s approvals.

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Mikell Harper, a representative for Rainbow Market Group, which is affiliated with Charleston-based Gramling Brothers Real Estate & Development, declined to comment.

The lawsuits coincide with growing concerns about the pace of hotel development on the peninsula.

Charleston City Council voted in February to study the impact of the projects rather than consider Mayor John Tecklenburg’s call for a temporary moratorium on new construction.

On the peninsula, 11 hotels with a combined 763 rooms already have the necessary zoning approvals, according to city figures. At least four projects are under construction, all north of Calhoun Street.

Reach Allison Prang at 843-937-5705.