Former Naval Hospital (copy)

The former Charleston Naval Hospital, at Rivers and McMillan avenues, remains empty from a failed revitalization project. Brad Nettles/Staff

Brad Nettles bnettles@postandcourier.com

In a windowless room at the North Charleston Police Department, Donald Trump Jr. and his associates met with City Council members and Mayor Keith Summey in 2012 to pitch an ambitious urban redevelopment project.

North Charleston had just purchased the long-vacant Charleston Naval Hospital and its 24-acre property at Rivers and McMillan avenues from the federal government for $2 million. Trump Jr — a son of hotel and casino developer and now-President Donald J. Trump — joined Utah lawyer Doug Durbano and Mount Pleasant resident Jeremy Blackburn to pitch a vision of what could be, according to councilmen who were present.

“The Cleveland Clinic was going to be one of their tenants, and North Charleston was going to become an international destination for heart surgery," said Ed Astle, a councilman at the time who attended the meeting. "We were going to have senior living in the hospital."

Just two months after the city bought the former 175-bed hospital, Summey announced the deal. They city would resell the property for $5 million to the development group, Chicora Gardens LLC.

Charleston County later agreed to become anchor tenant, signing a 25-year lease in 2014 that carried an annual cost starting at $1.2 million. The county planned to move in by the end of that year, but ended up pulling out of the deal in 2016, saying the building still wasn't ready.

The hospital property was foreclosed upon last year, the Chicora group sought bankruptcy protection, and a legal settlement awaiting court approval Monday would put Charleston County taxpayers on the hook for $33 million to buy the property back.

Durbano told The Post and Courier it's a "most favorable settlement for the good folks of Charleston County" because the redevelopment "will now be coming to a speedy fruition."

The dealmaking 

Trump's involvement in the deal was not known to the public until 2014, and his purported role as co-developer was apparently exaggerated.

"I was at the meeting with Donald Trump Jr.," said North Charleston Councilman Bob King. “He didn’t have much to say, honestly. Jimmy (sic) Blackburn did most of the talking."

+2 
Jeremy Blackburn (copy) (copy) (copy)

Mount Pleasant resident Jeremy Blackburn managed the Naval Hospital redevelopment project. File

The plan pitched to the city called for revitalizing a struggling part of North Charleston and bringing businesses, a grocery store and a park to the area.

Summey said at the time that the main thing, for him, was finally getting someone to build a grocery store in a struggling part of town considered a "food desert" since retailers fled the area after the Navy base closed.

"Everything else is pudding," the mayor said.

Summey said Trump Jr. was a principal of the company that would redevelop the former hospital, the tallest building in the city, and that's the impression City Council members got in the 2012 windowless-room meeting.

"They paraded in the guys who were buying it — Trump, Blackburn and Durbano," said Astle. “Other council people were falling all over (Trump). He was the bait."

Charleston County Council members were also told Trump and Durbano were the company principals, in mid-2014, in a memo from county Attorney Joe Dawson.

Trump would later tell The Post and Courier, in 2016, that he had a 10 percent investment in the project but no day-to-day involvement and no control or voting rights.

"I simply thought it could be a great project for North Charleston," he said.

+2 
Donald Trump Jr. (copy) (copy) (copy)

Donald Trump Jr. is an investor in the Charleston Naval Hospital redevelopment project, which went into bankruptcy in 2016. The company in which he's an investor is accepting Charleston County's $33 million settlement offer, to resolve legal claims. Richard Drew/AP

Blackburn oversaw the project, has been attending bankruptcy court hearings to represent the Chicora group, and accepted Charleston County's $33 million settlement offer on the group's behalf.

Red flags?

Between the non-public North Charleston meeting with Trump, in 2012, and Charleston County's decision to agree to become primary tenant in the former hospital, in 2014, there were several notable developments.

The North Charleston company Titan Atlas Manufacturing, in which Trump and Blackburn were partners, had shut down, leaving a trail of litigation, unpaid bills and unpaid taxes. Blackburn declared personal bankruptcy in 2013, claiming he had no income and just $50 in the bank, and a Utah court wiped away his extensive debts, some of which were unpaid claims from lawsuits.

Durbano that same year created Titan Atlas Global — a company with the same location, products and building as Titan Atlas Manufacturing, in Stark Industrial Park — and Blackburn was installed as CEO.

Those developments, and the fact that Titan Atlas Global had been hired by the developers to fix up the Naval Hospital building, did not keep Charleston County from signing the lease deal in 2014. But from that point on, the relationship quickly soured.

The very next year Titan Atlas Global, the company run by Blackburn that County Council had been told would renovate the hospital, went under

“There is no connection between the two companies,” Durbano said at the time, in an email to The Post and Courier.

Charleston County Council members were told in 2014, in the memo from the county attorney, that "Chicora Life Center, LC has engaged Titan Atlas Global, L.C., to recondition the (hospital) building. Titan Atlas Global, L.C. is a Utah company formed on July 19, 2013 by Doug Durbano, its principal. The company is managed locally by Jeremy Blackburn."

Trump and Blackburn did not respond to requests for comment. The Titan Atlas property was acquired in 2016, through foreclosure, by a company controlled by President Trump.

Nearing the end

The Chicora group used the county's promise of long-term lease payments to secure loans, to complete the hospital property purchase and fund renovations. But the building wasn't ready in 2014, or 2015, and multiple contractors filed claims alleging they weren't paid for their work.

By March 2016, Charleston County officials were fed up, and County Council voted to break the lease. The Chicora group insisted the building was ready for the county to occupy. The county disagreed.

Durbano told the county they had no legal grounds to break the lease — an assertion that raises questions about the lease agreement vetted by the county's legal team. Later, a bankruptcy judge would agree.

The Chicora group sought bankruptcy protection last year and sued the county. In U.S. Bankruptcy Court in Charleston, Judge John Waites declared the county's lease deal an asset in the case, exposing the county to damage claims and potentially having to honor the lease. 

Instead, the county agreed to settle, offering $33 million to buy the 24-acre property outright, with the 368,000-square-foot hospital building, a vacant three-story former enlisted quarters, tennis and basketball courts, and parking for about 900 vehicles.

“It’s been kind of a black eye for North Charleston," said King, the councilman. "Intentions were good, at the beginning."

"I guess we got the wrong people involved," he said. “I’m not happy with the county bailing those people out, Donald Trump Jr. and his people."

Durbano said "this is all good news" for Charleston County residents, calling the $33 million price tag "an excellent buy."

"A formerly dilapidated and economically depressed area will now come back to life," he said.

At 10 a.m. Monday in Charleston, a hearing is scheduled in which Waites is being asked to approve the county settlement.

Reach David Slade at 843-937-5552. Follow him on Twitter @DSladeNews.