Having spent $33 million to settle a lawsuit and acquire the vacant former Charleston Naval Hospital — the tallest building in North Charleston — taxpayers are facing several expensive options that County Council will consider Thursday.
"We have tasked staff and contractors to be available to discuss options; options such as selling it, tearing it down, rebuilding what we have — and price tags on each," said Council Chairman Vic Rawl.
Selling the building could mean taking a loss in the neighborhood of $25 million and declaring an end to a redevelopment plan that seemed so promising when Donald Trump Jr. pitched it to local officials in 2012.
The former hospital, which North Charleston had bought from the federal government for $2 million, was going to be redeveloped as a medical and social services hub, with Charleston County leasing the main floor and two upper floors as the anchor tenant. Instead, as the project dragged on and complaints mounted, the county attempted to break the lease agreement, the developers sought bankruptcy protection, and the county was sued.
At the conclusion of the legal fight, the county owned the property as part of a $33 million settlement that paid off all the project's debts with millions left over for the development group, controlled by Utah lawyer Doug Durbano, project manager Jeremy Blackburn and his family members, and minority shareholder Trump.
At the time, Durbano called the settlement "all good news" for Charleston County residents and “an excellent buy.”
The county hasn't put the 24 acre property at Rivers and McMillan avenues up for sale but has been trying to learn what sort of price it could fetch, if the county were to sell it. When the property was in bankruptcy, before the county settlement in 2017, the prior owners tried to sell the property and the highest offer was $8.5 million.
The county could decide to keep and renovate the building, at an estimated cost of $66 million in addition to the $33 million already spent. That would come with additional risks and potential rewards, such as revenue from leasing space the county doesn't need, while sticking with the original goal of consolidating some social services.
"I’ve always said that should be a social service hub, and I’m not shying away from that," Councilman Teddie Pryor said Tuesday.
The county could also potentially demolish the building, then decide what to do with the land.
Or the county could sell the building to a developer who could renovate it and lease it back to the county — the same sort of arrangement agreed to in 2014, which ended with the lawsuit and resulted in the settlement.
“There is someone who is interested in a lease-purchase," said Rawl, declining to identify the person or business. "They have the funds. They have the track record."
Pryor, who was chairman of council when the original hospital lease was signed, said now that the county owns the building it wouldn't make sense to sell it and lease it back.
“I’m not interested in leasing, I’ll be honest with you," he said. "For me, personally, that’s off the table."
Only three floors of the 10-story building have been renovated, and County Council members were told in May that the building doesn’t meet fire code, needs improvements to withstand earthquakes and needs all of its seven elevators refurbished, among other things.
“Are there any good choices? I would say no," Councilman Dickie Schweers said on Tuesday.
Council members expect to hear additional, detailed presentations from county staff and consultants when they meet at 3 p.m. Thursday for a special Finance Committee meeting where the only agenda item is the hospital property.
The meeting will be held in the county office building at 4045 Bridge View Drive in North Charleston.