The tallest building in North Charleston will soon be demolished, with an estimated $6 million of work beginning in May, Charleston County Council has decided.
It's not the fate the county's leadership had imagined for the former Charleston Naval Hospital, a 10-story, 400,000-square-foot building at Rivers and McMillan avenues. Five years ago, the county signed on to be the anchor tenant in the building, agreeing to lease three floors following renovations by a development group whose owners included Donald Trump Jr.
Instead, the redevelopment plan ended in bankruptcy and litigation, and the county in 2017 paid $33 million to settle the claims and take ownership of the still-vacant building and 23-acre property.
“We ended up wasting $33 million dollars," Councilman Henry Darby said Tuesday. “Why we haven’t been voted out (of office) — I don’t understand that."
Darby believes the county should not have pulled out of its contract to lease space in March 2016, 15 months after the county had originally planned to move in. The cancellation of the lease, following delays and complaints about shoddy workmanship and unpaid contractors, prompted the developers to seek bankruptcy protection and sue the county.
After the county settled the lawsuit and took ownership of the property, officials determined it could cost another $66 million to complete renovations. County Council decided it would make more sense to demolish the former 175-bed hospital and a 3-story barracks building on the same property and start over.
The county plans to build a new office building there to house the services, such as inpatient drug treatment, that had been expected to move in to the former hospital. The county also plans to work with the Charleston Area Regional Transportation Authority to create a new $5 million hub for bus service on McMillan Avenue and explore private development of an estimated 13 acres that would remain.
The property is in one of the new Opportunity Zones that have been created across the country, which come with tax advantages for developers that are meant to spur investment in lower-income areas.
One complication is that while the county has a redevelopment concept in hand, there are also two ongoing studies of the area that includes the hospital property, mostly funded by taxpayers and costing a total of more than $1 million.
“If we find some investor who wants to Dewberry that place, and we swing a (wrecking) ball through it, then where are we?" said Councilman Brantley Moody, referring to the former federal hospital. In Charleston, a former federal building was redeveloped and is now a luxury hotel called The Dewberry.
The county is helping to fund one of the two studies, contributing $50,000 toward a $125,000 planning exercise that North Charleston and the Coastal Conservation League are also co-funding. The Urban Land Institute will conduct a week-long study of the broader area from Spruill Avenue to Meeting Street Road and from Cosgrove Avenue to the former Kmart shopping center north of McMillan Avenue.
Darby said that people involved with the ULI study met with other council members but not with him, and he represents that part of North Charleston.
“If they don’t respect my personhood, if they don’t represent the position that I hold, then they aren’t going to respect the people I represent," he said.
Some council members expressed concern the county's decision to demolish all the buildings on the Naval Hospital site could conflict with the study recommendations. Council Chairman Elliott Summey said the study won't dictate what happens on the county's property.
“I don’t care what ULI says," Summey said. "I care about what the community says.”
The study area includes the former hospital, which was built in 1973 and closed in 2010. The bus rapid transit system planned for the Charleston area will run through the study area, along Rivers Avenue.
“I don’t want us digging stuff up and swinging wrecking balls before the community has had a chance and the ULI study is done," Moody said.
The May start date for demolition was a compromise to resolve concerns about getting ahead of the study that the county is partly funding. The vote to appropriate $6 million for the work passed 7-2, with councilmen Dickie Schweers and Vic Rawl opposed.
One of the first steps will be removing hazardous asbestos from the hospital building, some of which is in the building floors the county had planned to lease, officials said Tuesday.
“So the building we were supposed to occupy still has asbestos?” Summey said.
The asbestos was found in drywall joint compound, which apparently dates to the building's original construction.