Facing an impending trial with tens of millions of taxpayer dollars at risk, Tuesday night was decision time for Charleston County Council on the failed Navy hospital redevelopment.
The big question was, which option facing the county was the least-worst? Would the county go to trial and fight a tough battle in U.S. Bankruptcy Court, or instead seek to settle very costly claims made by developers suing the county?
After meeting behind closed doors for nearly two hours, County Council voted 5-2 to pursue a settlement. Negotiations are ongoing and details have not been disclosed.
"No matter which way you fly, this is going to cost a lot of money," said Council Chairman Vic Rawl.
That's because, he said, the county will need to rent, buy or build a new home for some county services no matter the outcome of settlement talks.
The fraught decision county officials faced Tuesday stemmed from a plan to consolidate county services in the former Charleston Naval Hospital, which was to be redeveloped by a group of investors and managers with an eyebrow-raising track record of failed businesses.
The company in charge — now in bankruptcy and suing the county — is Chicora Life Group, headed by Utah lawyer Doug Durbano and managed by Mount Pleasant resident Jeremy Blackburn. Silent investment partners include Donald Trump Jr., a son of the president.
The redevelopment plan was touted as a way to help revitalize a struggling part of North Charleston, by filling the tallest building in South Carolina's third-largest city with workers and clients, who could want places nearby to eat and shop.
That vision had faded by 2016 when County Council, frustrated by repeated project delays, concerns about workmanship, and complaints of non-payment by multiple contractors, voted 5-3 to terminate the lease agreement.
Like Rawl and other council members, Teddie Pryor, who made the motion to pursue a settlement on Tuesday and voted against ending the lease last year, said he could not comment on the potential settlement.
"It's still being negotiated," he said.
A key problem for the county has been that, because the Chicora group so quickly filed for bankruptcy, a Charleston judge ruled that the county lease is an asset in the bankruptcy case. Essentially, the county can't simply terminate the lease because the Chicora group promptly sought bankruptcy protection, even though the Chicora group sought that protection because the county terminated the lease.
So the county is neither a creditor nor a debtor in the bankruptcy but nonetheless faces demands to make good on a nearly $30 million, 25-year lease agreement, and face claims for damages. Just five years ago, the city of North Charleston led by Mayor Keith Summey bought the Naval Hospital property on Rivers Avenue from the federal government for $2 million before quickly agreeing to sell it to the development group.
County Councilman Elliott Summey, who at one point was named a defendant in the lawsuit against the county, recused himself from the decision-making Tuesday and was not present. Councilman Henry Darby abstained from voting but did not give a reason. Councilmen Joe Qualey and Dickie Schweers voted against pursuing a settlement, and the remaining five council members voted to seek a settlement.
The county had planned to lease the first, second and eighth floors of the hospital building for the county's Department of Alcohol and Other Drug Abuse Services, and other services. The county sold its Charleston Center building on the Charleston peninsula, where DAODAS is currently housed, for $17 million to the Medical University of South Carolina but has been unable to move out because of the Naval Hospital problems.
Rawl said that whatever happens, the county will need to arrange for new offices to provide DAODAS services.