Selling the short term Apartment complex looks to join 'shared economy'

The 72-unit East Central Lofts opened last summer at 274 Huger St. on the upper peninsula. Its owner is seeking approval to offer short-term rentals in the 61 market-rate units. The other 11 apartments can't be used for accommodations because of affordable housing regulations.

Greg Atkins puts underused goods to work for a living.

In the Upstate, his Spartanburg-based Atkins Machinery sells used textile-making equipment to customers around the world.

In Charleston, he's trying to market idle real estate. In doing so, purposely or not, he's poised to put the city's recent crackdown on short-term rentals to the test.

Atkins' Huger Properties LLC is asking that the 61 market-rate rental units at its East Central Lofts development be approved for use as accommodations.

The request coincides with the rapid growth of the Whac-a-Mole-like phenomenon known as "the shared economy." The change proposed for East Central Lofts goes to the heart of the debate over disruptive, free-market websites such as Airbnb, a popular booking service that allows property owners to rent empty bedrooms, cottages or entire homes to visitors on a nightly basis.

The rub is the city keeps tight rein on its lodging industry, and it restricts short-term vacation rentals in just about every nook of the peninsula aside from the Cannonborough-Elliottborough neighborhood. The recent crackdown on the growing wave of wannabe innkeepers has included undercover stings and stiff fines for offending property owners.

East Central Lofts adds a fresh wrinkle to the Airbnb debate. Atkins' group is the first to ask the city for a "special exception" that would permit short-term rentals within an existing apartment building, according to the Charleston zoning office.

Atkins said the request stemmed from renter feedback.

"We're not doing anything different from an owner's standpoint," he said last week. "We have tenants who have asked us about short-term rentals. ... We have had tenants ask that, if they go out of town, can they rent their units."

East Central Lofts is at 274 Huger St., between Meeting and King. Completed about a year ago, the four-story industrial-chic building sits next to an I-26 off-ramp that carries thousands of East Cooper-bound commuters onto the Ravenel Bridge every day. It's hard to miss the big, bold "EAST CENTRAL" lettering painted on the interstate side of the structure.

The location is within the city's hotel district, but the property owners need to clear a big hurdle before their tenants can legally sublet their units: the blessing of the Board of Zoning Appeals.

Atkins' group appears to be taking the task seriously. It's represented by ex-Charleston planning chief Josh Martin, who is arguing for the zoning board's approval in a 10-page "narrative."

Martin noted that rather than adversely affecting "the existing housing stock," the requested change "yields a more flexible and functional housing stock."

Also, he said the proposal would advance parts of the city's comprehensive plan and enhance the Cooper River Bridge District, while also encouraging pedestrian traffic and the use of the public transportation.

Street parking wouldn't be negatively affected because East Central Lofts has ample on-site spaces, according to the narrative. Moreover, by allowing more short-term rentals in the upper peninsula, the city would "undoubtedly relieve pressure on the lower peninsula related to accommodations uses."

While it might look good on paper, a key city official isn't buying the argument. Lee Batchelder, Charleston's zoning administrator, said his office is recommending that the board deny the request at its meeting Tuesday night.

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"It certainly violates the standards of the special exception test," Batchelder said Thursday.

He said East Central Lofts was approved for apartments and should remain as apartments.

At the same time, the city is worried that the approval would open the door for similar requests and allow the East Central Lofts building to be converted later into a full-blown hotel.

"And there's nothing to stop you from doing that," Batchelder said.

As for Atkins, he favors short-term rentals "in the appropriate place," but he insisted Huger Properties has no plans to turn its mostly full apartment building into a hotel. He said he just wants to stay within the law.

"We don't want anyone doing anything in the building they're not supposed to be doing or that we can't control," Atkins said.

Contact John McDermott at 937-5572.