Just when it appeared certain that Charleston County would tear down the tallest building in North Charleston, a potential buyer has emerged for the former Naval Hospital at Rivers and McMillan avenues, and the county is interested.
A group led by developer and state Rep. William Cogswell, R-Charleston, wants to renovate the 10-story building, Cogswell told The Post and Courier. His company, WECCO Development, is known for redeveloping The Cigar Factory on the Charleston peninsula, and for the ongoing redevelopment of Garco Mill in North Charleston's Park Circle area.
Charleston County had estimated it would cost $66 million to renovate the 400,000-square-foot former hospital.
“In fairness, it’s a super-complicated project," Cogswell said. "It’s not easy. But that’s the kind of thing we specialize in."
The price has not been disclosed, but County Council on Thursday voted to stop planning the demolition of the hospital, evaluate the offer to purchase the property, and also explore negotiations to acquire a property on Mall Drive. That would be the vacant Verizon building next to North Charleston City Hall.
Council Chairman Elliott Summey described the offer for the hospital property as "great."
"It's better than you think," he said.
The hospital property is a large piece in a challenging puzzle. The 23-acre site could play an important role in revitalizing the city's south end; it's a potential location for county services and a hub along the planned bus rapid transit line from Summerville to Charleston.
It's also a daily reminder of a recent failed redevelopment that's cost taxpayers more than $35 million.
Some County Council members would like to recoup some of that money, be done with Naval Hospital, and consider purchasing the vacant Verizon building next to North Charleston City Hall as space for county services that were supposed to occupy part of the hospital building. The county needs a new home for drug and alcohol treatment and other services, because it previously agreed to sell the Charleston Center building on the peninsula to the Medical University of South Carolina.
"I’ve thought the hospital could be redeveloped with apartments, retail and commercial," said Councilman Vic Rawl. "I’ve always felt uncomfortable putting social services in that location because there’s kind of a negative connotation with some social services."
North Charleston Mayor Keith Summey also believes putting inpatient drug treatment and a methadone clinic on the site are likely not the best way to promote economic development.
“The people who are living there would never look at it like that,” Councilman Henry Darby said. “That’s an upper-middle-class point of view.”
Darby and Councilman Teddie Pryor have argued that the community would be best served by establishing such services on the hospital property. Darby said the decision was made months ago to demolish the hospital and build new county offices on this site, and he's suspicious that alternatives would result in development that could price existing residents out of the community.
"It's almost as if we want poor people to be invisible," Darby said Thursday, while refusing to participate in the closed-door discussion of the offer for the property.
Darby, Pryor and Anna Johnson voted against the motions to explore the sale of the hospital property and purchase of the Verizon building. Herb Sass and Dickie Schweers were absent for the vote.
Preserve or demolish?
Charleston County became the owner of the former 175-bed hospital and the large property it sits upon in 2017 as part of a legal settlement following the collapse of a redevelopment plan Donald Trump Jr. helped sell to North Charleston officials several years ago.
The county spent about a year considered selling the property or completing the hospital renovations. Eventually, the county decided tearing down the hospital, at an estimated cost of $6 million, and building new offices for county services on the property, at a minimum cost of $42 million, was the best option.
A panel of experts convened by the Urban Land Institute last month also concluded that the county shouldn't attempt to renovate the hospital.
“We did some analysis and we concluded that you’ve got to demolish the building and move on,” said Emil Malizia, a research professor in the Department of City & Regional Planning at The University of North Carolina at Chapel Hill, when the ULI group presented its findings.
One important thing that's changed since the county became owner of the hospital property is the creation of the federal Opportunity Zones initiative, championed by U.S. Sen. Tim Scott, R-S.C. and a North Charleston native. Much of the city's south end, including the hospital property, is now in an Opportunity Zone, where investors can get lucrative tax breaks tied to investments in the area.
Cogswell said that when he sought partners for the Naval Hospital offer, he spoke particularly to those interested in Opportunity Zone investments.
Mayor Summey said he's always wanted to see the hospital building preserved.
"It's the tallest building we have and a reminder of the naval presence in North Charleston," he said.
The city has a relationship with Cogswell and WECCO, because North Charleston sold the historic former Garco Mill building to the group for $1 million, and a complete restoration of the building near East Montague Avenue is underway, with plans for office space and a food vendor hall.
"Anything his group has done has, in my opinion, been successful," Summey said. "These people are the experts, as far as I am concerned."
Elliott Summey, the County Council chairman, is the mayor's son. The mayor said they haven't discussed Cogswell's offer.
Elliott Summey noted that selling the hospital property would put it on the property tax rolls. If the county were to buy the Verizon building, it would become nontaxable but would likely be worth far less than a redeveloped 23 acres.
Summey said the offer to buy the property preserves the plan to put a transit hub at the hospital property.
Offer not 'bottom fishing'
The hospital property has long been seen as a key to revitalizing the surrounding area.
Across Rivers Avenue is the long-vacant site of the former Shipwatch Square and Pinehaven shopping centers. Neighbors across McMillan Avenue include a vacant shoe store, a gas station, a pawnshop and other businesses.
But the property reaches all the way to Spruill Avenue, not far from Park Circle and right at the entrance of the former Navy base. Adjacent to the hospital property, on the south side, are residential streets lined with homes.
"I think the first thing that happens in that area will determine what comes next," the mayor said.
The perceived value of the property has fluctuated wildly since the hospital opened in 1973. The hospital cost an estimated $18.5 million to build, but North Charleston bought the property for just $2 million after the hospital closed and the federal government auctioned it off in 2012.
North Charleston sold the property to development company Chicora Life Center for $5 million, and five years later Charleston County became the owner after paying $33 million to settle litigation with the bankrupt developer. The county made a brief attempt to sell the property last year, but the highest bid was less than $4.5 million.
Cogswell indicated his group made a more attractive offer.
“It is not bottom fishing at all," he said. "It would be a very fair, reasonable — some might say crazy — offer.”
Cogswell said the large property is near the entrance to the former Navy base, and not far from Park Circle and the East Montague strip, making it an important property in an area where he and his partners already have projects underway.
“We’re not dying to buy it," he said. "We do have a vested interest in it."
Tour of the former Charleston Naval Hospital
The 400,000-square-foot Charleston Naval Hospital was built in 1973 to serve one of the nation's largest Navy bases. It has been largely dormant since shutting down in 2010. After a failed renovation by private developers, it is now owned by Charleston County.