The 190-acre Magnolia tract is on Charleston's upper peninsula between the Ashley River, left, and Interstate 26. Streets and underground utilities are expected to start taking shape on the first phase by the spring of 2022. Gavin McIntyre/Staff
The first signs of development could soon blossom to reclaim a large contaminated industrial site on Charleston's upper peninsula, nearly two decades after the process began.
Highland Resources is expected to begin construction on the first phase of roads and underground utilities by the spring in the long-anticipated Magnolia project.
The Houston-based developer completed the purchase of the 190-acre site in 2018 for $52 million through a bankruptcy auction after the previous owners faltered in the aftermath of the crippling recession in 2008.
Highland invested another $35 million in environmental remediation that included laying down a fabric-like barrier and adding at least another foot of dirt on top of it.
Clark Davis, CEO of Highland Resources, the Houston-based company that owns the Magnolia tract on Charleston's upper peninsula, talks about the first phase of development now that environmental cleanup has been completed. Brad Nettles/Staff
"We remediated a lot of the contaminated soil, put down the barrier and added 1.6 million cubic feet of clean fill dirt," Highland Resources CEO Clark Davis said.
The remediation work is the unsexy part of the project, Magnolia spokesman Jonathan Scott said.
"Once you see streets and sidewalks, it becomes apparent they are starting to build out this property," he added.
The site, with much of it marsh, features 81 developable acres. The project will be divided into three phases with buildout over more than 15 years.
Street talk
The first 20-acre development project will include office, retail and apartments on the south end of the Magnolia site near an $8 million bridge built in 2010 as a connection from Heriot Street.
It has long been dubbed the "Bridge to Nowhere," a label frowned upon by the developer. The first phase of vertical construction, set to begin in 2023 and two decades in the making, could undo the infamous moniker.
The 1,400-foot-long span is open to pedestrians but closed to vehicular traffic.Â
The second and third phases will include a mix of uses on the rest of the property, with plans for waterfront offices and possibly a hotel near the Ashley River.
A rendering of the 190-acre Magnolia tract on Charleston's upper peninsula shows a conceptual image of what it could look like after complete buildout over a couple of decades. Highland Resources/Provided
A storm drain has been installed down the center of the site leading to the river.
"It's large enough to put a small SUV through," Davis said.
The site has been approved for 4,080 housing units, 1.05 million square feet of office space, 200,000 square feet of retail space and 1,040 hotel rooms.
At full buildout, Magnolia will add more than 10,000 residents to Charleston, already the largest city in South Carolina. At least 15 percent of the housing will be set aside as workforce units. The additional residents will be about as many as the current populations of Hollywood and Isle of Palms combined.
Building heights will range from three to nine stories with the tallest buildings concentrated in the middle of the development and five stories near the marsh.
The plan sets aside 24 acres of public parks, and it preserves more than 49 acres of marsh.
Most of the usable open space will be along the waterfront, creating a continuous park that will stretch into the marsh and include at least two public access points. The plan also includes neighborhood greens, parks, plazas and public squares as well as entertainment venues.
Construction on a waterfront park will occur along with development of the first 20 acres, Scott said.
Once one phase is completed, work on the next one will begin within 18-24 months under the current development plan, Davis said.
A bridge built several years ago leads to new buildings in a conceptual image of what the Magnolia tract on Charleston's upper peninsula could look like one day. Streets and infrastructure will start taking shape by the middle of 2022 on the first phase of the multiyear project. Highland Resources/Provided
"We have a lot of interest from people who want to build out here," Davis said. "We want something top quality and generational. … We are trying to find one master developer to come in and work on the project."
The Highland CEO also pointed out the company has made its investment in the project for the long haul.
"We really believe in the project and intend to make a long-term commitment," Davis said.
One tenant remains on the site. Parker Marine sits on the waterfront but is expected to vacate the property by the end of 2022.
History of contamination
Decades ago, the site was a heavy-industrial zone that housed fertilizer factories, a lumber-treatment plant and other businesses. Those former tenants left behind a legacy of lead, arsenic, creosote and other contaminants in the soil.
The first reuse plan began to emerge about 20 years ago. Led by Raleigh-based Cherokee Investment Partners, the Magnolia backers set out to scrub the dirt clean so it could be built upon, describing the big infill project as the largest redevelopment of polluted land in South Carolina.
The original investors formed two companies, Ashley I and Ashley II, which began buying up property in 2002. Over time, they closed 33 deals and amassed nearly 200 contiguous acres around Braswell and Milford streets. Their master plan called for a small city to rise from the former industrial wasteland.
But the ambitious deal faltered and never regained its footing. Hobbled by the 2008 downturn, cleanup expenses and litigation costs, Ashley I and Ashley II filed for bankruptcy in 2016, listing debts of more than $23 million. They also disclosed they had invested nearly $50 million in the Magnolia deal.Â
In the interim, a partnership of WestRock with 70 percent and Branch Properties with 30 percent gained control of Magnolia from the Bank of America around 2012, according to Ken Seeger, a retired executive with WestRock Land and Development.
"We (then) developed the master plan, rezoned the property, resolved certain litigation, designed the hazardous remediation plan, obtained key permits and agreements with the regulatory agencies, amended the (Tax Increment Finance District) and, five years later, in 2017, sold ... interest in Magnolia to Highland Resources, when WestRock sold off all of its other projects," Seeger said.
When Highland prevailed as the winning bidder, its then-CEO said the privately held firm cited years of experience dealing with contaminated real estate and successfully working with environmental regulators.
More than half of the land the company acquired was so contaminated that it was designated a federal "Superfund" site in 1994 by the Environmental Protection Agency.Â
Paperwork has now been filed to have that portion of the site taken off the EPA's "National Priority List" in September.
The environmental cleanup at the Magnolia development in the Charleston Neck Area was completed in 2021, and work on streets and underground facilities in the first phase of development is expected to begin in the spring. Gavin McIntyre/Staff
Note: Additional information from WestRock has been added to the original story.
