North Charleston's grand urban renewal project is on track to be dismantled and sold for parts.
Noisette's lenders, who began foreclosing on 240 acres of the former Navy base land a year ago, have proposed splitting the land into more than half a dozen parcels. The request jeopardizes Noisette's long-standing plan for an innovative mix of thousands of homes, offices and shops.
Now, the development's top lender, Pennsylvania-based Capmark Finance Inc., is in salvage mode, trying to figure out how to group together segments of the land to raise enough money to pay off a portion of the $23.8 million that Noisette owes.
"The goal is to sell enough property that you satisfy the debt," said Charleston County master in equity Judge Mikell Scarborough, who gave Capmark and Noisette officials several weeks to map out a sale proposal.
Meanwhile, Noisette officials continue to say they're discussing a possible sale of the loan to outside investors. Attorney Andy Gowder said between five and 10 groups are conducting what he characterized as "serious due diligence."
"They are spending significant time and resources in evaluating this opportunity, so we take from that level of activity that they are serious," he said in an e-mail.
The city of North Charleston, once considered a viable buyer, no longer is one of those groups, and time is running out. The court could accept bids on the parcels as early as September.
Any subdivision of the foreclosed property would scuttle any last hope that the northern end of the former Charleston Naval Base will be redeveloped in the coordinated, eco-friendly way that Noisette Co. officials had touted since unveiling their project a decade ago.
Instead, multiple owners could put forth different ideas about how best to use their part of the parcel along the Cooper River, where houses sit near large office buildings and heavy industrial shops.
North Charleston Mayor Keith Summey said the new owners will have some restrictions on what they can build.
"We'll still have the zoning for whoever comes in," he said.
He seemed optimistic about the prospect of splitting up the land. At least someone will build on the largely abandoned site, he said.
The 240-acre swath of foreclosed land includes vacant warehouse spaces north of Noisette Creek, several of which are currently rented to businesses. It also includes the historic collection of officers' homes just north of the shipyard, as well as the Powerhouse basin, a 40-acre parking lot along Spruill and McMillan avenues, at the front door of the base.
The foreclosure lawsuit does not cover about 100 acres still owned by Noisette, such as the Storehouse Row complex of large warehouses and office buildings and the historic hospital district.
It also doesn't include the new Riverfront Park nor the old shipyard property, which is owned and operated by a separate business group.
Perhaps the mostly highly sought-after parcel amid the real estate slowdown is the existing rail line that stretches to the southern end of the base, where the State Ports Authority is building a $600 million shipping terminal.
North Charleston and state lawmakers still haven't resolved a dispute over whether that rail line should be revived to serve the new terminal. The state Commerce-Department-sponsored rail plan named possible locations for "intermodal" facilities to link trucks to trains, including one belonging Noisette Co.
But an active rail line could work against the value of nearby land.
Noisette estimated $300 million in demolition costs, plus some 80 canceled leases, if trains are allowed to run through its property at the north end. That translates into a direct hit to North Charleston's tax base.
Summey also said running rail through Noisette would violate an agreement with the State Ports Authority and undo the redevelopment progress made in that part of the city.