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Here's where $33 million taxpayer dollars went in the redevelopment of Charleston Naval Hospital

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Duct work and wiring hang from the ceiling of the third-floor chapel in the former Charleston Naval Hospital. Wade Spees/Staff

Taxpayers lost a pile of money on the problem-plagued redevelopment of the former Charleston Naval Hospital, but the developers, their lenders and lawyers walked away with millions.

Not that the developers didn't want even more. 

Charleston County shelled out $33 million to buy the North Charleston property and settle a lawsuit with the developers. But at one point in the court proceedings, the Chicora Life Center group complained because they didn't get more cash to cover the taxes that company principals expected to pay on their windfall from the hospital sale.

The Chicora group was owned by Utah lawyer Doug Durbano, project manager Jeremy Blackburn’s family, and Donald Trump Jr., the president’s eldest son. 

Blackburn, a West Ashley resident, was the public face of the company in the Charleston area. From 2013 through 2017, he negotiated the 25-year lease with Charleston County that was a focus of the lawsuit, managed the hospital redevelopment work, and served as Chicora's representative in court.

During those same four years, Blackburn went from declaring personal bankruptcy to owning more than 60 Charleston-area properties worth nearly $9 million. In 2013, he told a federal court in Utah that his assets amounted to $50 in the bank, a wedding ring, and a security deposit on his rented home.

Blackburn, 45, wouldn't say how he reversed his fortunes, but he said his recent accumulation of wealth has no connection to the Charleston Naval Hospital redevelopment.

“None at all,” said Blackburn in an email. In fact, he maintains that he received no compensation whatsoever for managing the Chicora development group.

“Hardly made me wealthy,” he said.

When the redevelopment plan was being pitched to Charleston County, Chicora group representatives repeatedly stressed that Blackburn was not a company owner or employee. Bankruptcy Court filings later revealed that the company's owners included his wife — a homemaker, according to a 2013 deposition by Blackburn — and his father, who pleaded guilty to 36 felonies in Utah after stealing public funds from a college where he was an administrator in the early 2000s.

They controlled a larger Chicora share than Trump Jr.

Blackburn and his wife, Mayako Blackburn, bought a $765,000 house in a gated West Ashley community in July. This year, Jeremy Blackburn just bought an industrial property in North Charleston for $4.1 million.

Blackburn, through several limited liability companies, also spent $4 million buying rental properties with hundreds of units in North Charleston. His management company has filed more than three dozen evictions, and some tenants have been fighting him in court, where lawyers representing Blackburn's interests have included former Charleston County Administrator Kurt Taylor.

"We're rebuilding their neighborhoods," Blackburn told The Post and Courier. "There's always going to be a couple of people who are disgruntled."

A large network of companies with ties to Chicora's owners also worked on the hospital redevelopment project, making money on construction work, commissions on leases, and interest on project loans. That income came in addition to the $2.6 million paid to the Chicora group's owners in the settlement.

Antion Financial, managed by Durbano, charged the Chicora group interest rates that would make some credit card companies blush — 18 percent, compounded daily, on nearly $6 million in project loans, court records show. Charleston County's settlement repaid those loans, with interest charges that brought the total to more than $10 million. 

The project’s primary lender, Boston-based UC Funds, loaned the Chicora group $13.9 million with similarly hefty interest rates. UC Funds collected nearly $18 million in the settlement.

UC Funds has since loaned Blackburn the $4.1 million needed to buy the North Charleston industrial property, which was owned by one of President Donald Trump's companies.

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An office on the 2nd floor / former Charleston Naval Hospital on Thursday, Feb. 8, 2018. Wade Spees/Staff

Blackburn said he was involved in other projects and companies during the hospital redevelopment years but offered no details. The main company he’s known to have run — Titan Atlas Global in North Charleston — failed in 2015. Blackburn said that company also paid him nothing.

The industrial property Blackburn recently purchased was home to Titan Atlas Manufacturing, a construction products company in which Blackburn had invested with Trump Jr. and Lee Eickmeyer, a Washington state farmer. The property later housed Titan Atlas Global, which made similar products and was also run by Blackburn.

When a Deutsche Bank loan for Titan Atlas — guaranteed by Trump Jr., Blackburn and Eickmeyer — went into default, the senior Trump acquired the loan and collected on the debt by foreclosing on the property. That's how a property in Stark Industrial Park became the president's only disclosed business interest in South Carolina.

Donald Trump Jr. signed over the deed when the sale to Blackburn went down in March.

Blackburn wouldn't say how he managed to amass a stable of properties and obtain millions in loans so soon after declaring bankruptcy. In a series of emails, he complained that past articles about his business dealings have been unfair and biased. He suggested a reporter must personally dislike him.

“The facts are substantially the opposite of what you write and I am sure it must frustrate and maybe infuriate you when I am successful and that Chicora emerged triumphantly,” he said.

Still, Blackburn declined to identify any facts that have been incorrectly reported, in articles dating back to 2014.

It’s not known if Trump Jr., or any of the Chicora group owners, invested their own money in the hospital redevelopment project. Trump Jr. did not respond to interview requests.

If the Charleston County settlement proceeds to the Chicora group were divided according to percentages of ownership, the Blackburns’ share would be about $690,000. Trump Jr. would have received just over a quarter-million dollars, and Durbano Properties would have reeled in more than $1.5 million.

Durbano declined to answer written questions. Instead, he shared a months-old press release that faulted Charleston County for the hospital litigation and suggested that taxpayers got a bargain acquiring the property for $33 million.

“Charleston County paid $33M for a building that appraised last year for over $40M,” the statement said.

While the Chicora group was under bankruptcy protection, and suing the county, efforts were made to sell or lease the naval hospital property.

Bankruptcy court filings show the highest offer received was $8.5 million.

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