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Million-dollar homes in the path of I-526, owned by SCDOT, sit vacant for years

The last time the completion of Interstate 526 was moving forward, South Carolina spent $30.1 million buying properties in the highway's path, including million-dollar homes that have sat vacant ever since.

That's more than $30 million of property taken off the tax rolls for years, and, with one exception, none of the houses purchased by the state have been rented out to recoup some taxpayer money.

Along Ellis Creek on James Island, for example, there are two houses with docks that the S.C. Department of Transportation purchased for more than $1.6 million each. One has been sitting vacant for more than five years now, slowly being overgrown with vines, while the other's been vacant since 2015.

“Just the unique nature of the start-and-stop has put us in the position we are in today," said Leland Colvin, DOT's deputy secretary for engineering.

Most of the land and home purchases from 2009 through early 2016 were "hardship" acquisitions — the owners asked the state to buy them out because the road plan thwarted development plans or made their homes impossible to sell.

The I-526 plan (copy) (copy)

The approximate route of the Interstate 526 extension. File/Brandon Lockett/Staff

State Transportation Secretary Christy Hall said the small number of vacant homes owned by the state haven't been rented out because "it’s not really consistent with the mission of the organization to become a landlord or owner of several properties."

There's been only one exception.

When DOT spent $10,375,000 to purchase land along River Road on Johns Island, where a 210-home development called The Retreat at 7 Oaks was planned and permitted, there was a lone renter-occupied house on the property. 

"The DOT let the tenant stay on," said Michael Flint, who had owned the property. "I thought they were good to them."

Flint said he had approvals, permits and financing for the Retreat development, and sought a buyout when it was clear the interstate plan would make development impossible.

"There was a lot of anxiety," he said. “At the end of the day, I would say (the buyout) was fair."

The renter declined to comment.

The state also bought 55 acres of undeveloped land on Headquarters Island, for $5.8 million, portions of another 97 acres planned for development on Johns Island, for $5.7 million, and more than a dozen other properties, six of which had homes on them.

Riley Pointe, a small gated subdivision on James Island, was where DOT purchased most of the houses — three of them. Those homes were less than 10 years old, and the state bought them for an average price of $1.3 million. 

overgrown house.jpg

Tim Henderson, SCDOT regional administrator, on Thursday, Feb. 14, 2019, walks through the yard of a vacant home the state purchased in 2013 for $1.6 million. The house on James Island is in the path of Interstate 526. Grace Beahm Alford/Staff

The state bought them, but then had no authority to demolish them because the I-526 project had been halted, Hall said. A homeowner who still lives at Riley Pointe, whose home was not purchased by DOT, declined to comment.

"In the past, if we knew a project was about to go to construction in a reasonable amount of time, we would incorporate the demolition of the structures into the contract," Hall said. “As you know, the DOT has no funds in the project, so we have to make sure we have funds to move forward with expenditures."

Colvin said now that I-526 is back on, DOT will resume looking at properties in the path of the interstate in the next 90 days or so.

In January, the S.C. Transportation Infrastructure Bank that funds large highway projects signed a new contract with Charleston County Council, reviving the I-526 project.

Property owners in the path of the road who want to sell would be unlikely to find a buyer other than the state. Homeowners who don't want to move will ultimately have no choice.

"They’ve been in limbo for quite a while," Hall said. “We are moving forward. I do not have an exact timeline."

The project will require property in West Ashley, Johns Island and James Island to create a connection from the end of I-526 in West Ashley to the James Island connector at Folly Road.

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

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