From The Post & Courier:
On July 7, North Charleston Mayor Keith Summey strode into a conference room in North Charleston City Hall. Two of the state’s most powerful lawmakers, Glenn McConnell and Hugh Leatherman, were waiting, along with Commerce Secretary Joe Taylor.
The meeting was secret. The subject: An idea from Taylor that would dramatically change North Charleston’s decade-long effort to remake a large part of the former Charleston Naval Base into an environmentally friendly community with homes, shops and businesses.
The central concept called for a new railway yard in the center of the base to handle port cargo. In return, the state would provide the city about $25 million to buy much of Noisette Co.’s property at the base’s northern end and pay for acquisition of other properties on the base’s edge.
Summey sat at the head of the table, with Taylor to his left and the two lawmakers to the right. Taylor quietly had been working on the deal with Summey and his aides. A draft of an agreement was on the table.
Soon after the meeting began, Summey brought up his key objection: He didn’t want rail access through the northern end of the base because it would hamper the city’s vision for Noisette and other nearby neighborhood revitalization plans. He also said he was concerned about the Space and Naval Warfare Systems Command operations at the base, and whether the city finally would get its wish to take over the Charleston Naval Complex Redevelopment Authority along with its flush bank accounts.
“You’re bringing up things we haven’t discussed,” Taylor said.
Summey responded that no one had agreed on anything. After an hour, the meeting ended with Leatherman asking Summey to come up with a list of demands.
What happened and didn’t happen that day has major implications for one of the most important pieces of property in the Lowcountry. Sitting on the banks of the Cooper River, the old Navy base once was a symbol of the nation’s military might. After the Navy left the base in 1996 and the emergence of the Noisette plan, it became a symbol of North Charleston’s aspirations to shuck off its reputation as the area’s repository of industry.
But 13 years later, with a few notable exceptions around the old shipyard, sizable portions of the base still look like an industrial junk yard. Historic homes that once housed admirals are in disrepair and in danger of being lost. Creditors are suing Noisette Co. One lawsuit seeks foreclosure on 240 of Noisette’s 340 acres. Meanwhile, the city and the state are in a court fight over rail access to and from the base.
All this has clouded North Charleston’s vision for the base.
But the vision offered by Taylor and other state officials, one that would retain more of the base’s industrial nature, also has yet to come into focus. The stakes, however, are clearer: How these competing visions are sorted out will have huge ramifications for the area’s economy and North Charleston’s evolution.
Vision for Noisette dims
When visitors enter the old brick Storehouse Row building on the base where Noisette has its offices, they’ll see a bright yellow banner that reads, “Noisette is faith, Noisette is partnership, Noisette is true.”
The slogans reflected Noisette’s lofty vision. Noisette was born in the late 1990s in a series of private meetings between a handful of key players, including Summey, Mayor Pro Tem Kurt Taylor, Dewees Island developer John Knott and his attorney Andy Gowder, Taylor’s brother-in-law. Knott eventually formed Noisette Co., and the city hired it to craft a master plan with the grand title, “The New American City.”
The plan’s goal was to build a new community on the base and connect it with nearby neighborhoods. One of Noisette’s first projects was to build a park on the riverfront, but delays and other problems slowed its progress. Over time, as new problems emerged, the city’s partnership with Noisette began to fray.
In 2005, The Post and Courier revealed that Noisette borrowed $3 million on base property without informing the city, setting off political fireworks.
“What do you do when your wife cheats on you? It’s the same thing,” Councilman Bobby Jameson said at the time. “When trust is broken, it never goes back to the way it was when you started.”
Noisette’s other partnerships also began to unravel. In 2006, Noisette borrowed $23.7 million from a group of investors called Capmark, using most of its land on the base as collateral. But earlier this summer, Capmark filed a foreclosure lawsuit against 240 acres. Noisette blamed tight credit markets for its inability to make its payments to Capmark. In a statement issued in June, Noisette said it still was seeking financing. Meanwhile, a real estate firm began working to sell parcels of the foreclosed land.
Commerce Department’s vision
It was against this grim financial backdrop that state and local officials began meeting this summer about the base’s future. In a larger sense, Noisette’s financial problems were small compared with the state’s larger economic vacuum.
In recent years, with South Carolina’s economy tanking, Gov. Mark Sanford and state development officials were getting heat over the state’s inability to attract new industry. The Port of Charleston’s loss of market share to Georgia and Virginia was a particularly heavy blow. The state’s unemployment rate was among the worst in the country. Sanford’s secret trip to Argentina to meet his mistress and the fire storm that followed didn’t help matters, either.
Taylor is Sanford’s commerce secretary. At age 25, he became president and chief executive officer of his family’s company, Southland Log Homes, eventually building it into the largest producer of pre-cut log buildings in North America. He sold the company in 2005 and was named commerce secretary the next year. He desperately wanted a win, and he and other state development officials were working hard on a big fish — a new Boeing plant. But they also had some ideas for the old Navy base.
Earlier this year, the state published a report about the status of its railroads. “One of the largest, if not the largest, rail issues in South Carolina concerns Class 1 service to the Port of Charleston,” the report states.
Commerce officials thought that improving rail service to Charleston’s waterfront would reduce traffic congestion by taking container trucks off the road and open up new business opportunities. It also would be a way of accommodating both of the region’s two major rail carriers, CSX and Norfolk Southern. The State Ports Authority’s Union Pier Terminal handles BMW cars, but that facility had grown cramped, and economic development officials long had floated the idea of moving those vehicle operations to a larger space at the Navy base.
Officials also were seeking a $45 million federal grant to build a lab to test large offshore wind turbines, part of a larger effort to bring a major wind power manufacturer, such as General Electric, to the base. GE would need good rail access because the turbines it makes at its plant in Greenville are too big to haul by truck. These projects and others, if successful, could generate thousands of jobs and solidify the area’s economy for years to come. Taylor says the base could become a site for green manufacturers and the jobs of the future.
The impasse
Earlier in the summer, Summey and his aides met with Taylor at the Berkeley-Charleston-Dorchester Council of Government’s offices at the Navy base. Taylor broached the idea of building an intermodal rail yard in the base. They also discussed another issue: whether trains should move through the northern end of the base.
That had been a concern for years because those trains also ran through several neighborhoods, including Park Circle. Residents had been irked by the noise and traffic delays caused by these trains. The city thought it had a binding agreement with the state to shut off the north end to trains, but state officials thought otherwise.
The Charleston Naval Complex Redevelopment Authority filed a lawsuit last month asking a court to decide who owns 13.4 miles of railroad tracks that crisscross the former base. If a judge decides that the state owns the tracks, then North Charleston would be unable to prevent their use at the northern end of the base.
Summey thought the city had a good case but wanted backup options if the city lost, so he listened with interest to Taylor’s ideas about the base. “He said, ‘If you had a wish list, what would be on that list?’ ” Summey recalled. “We agreed to write one down.”
That set the stage for the July 7 meeting. Before the meeting, aides hammered out a draft of an agreement between the city and the Commerce Department. Summey said Leatherman and McConnell attended the meeting because “they were led to believe by Commerce that we’d say yes.” But, he added, “We weren’t ready to sign anything that day.”
The plan called for an intermodal rail facility to be built in the central part of the base where Clemson’s Restoration Institute owns a large tract. Rail access to the terminal would come from the northern and southern ends of the base.
In return, the state would finance the city’s purchase of Noisette’s property now in foreclosure, which would involve about $25 million.
The state also would create two “acquisition accounts” to help the city buy residential and other properties along North Carolina Avenue, a neighborhood off Spruill Avenue that would abut a future rail yard, and along St. Johns Avenue at the northern end. The state also offered to facilitate construction of two rail crossovers and build sound barriers to keep down rail noise.
But Summey had concerns.
He was especially worried about SPAWAR, a military installation that is a key employer in the city. It’s located in several places on the Navy base and at the Naval Weapons Station. Summey thought that if SPAWAR was consolidated at the Weapons Station, it would be less vulnerable in the next round of base closings.
He also wanted control over the Redevelopment Authority, which has about $17 million in its accounts, and to sort out several other rail issues with CSX and Norfolk Southern.
But Taylor thought the southern route was unworkable because it was too expensive and would favor CSX over Norfolk Southern. Taylor had heard the cost of the southern approach might be as much as $1.5 billion for land and construction.
It became clear in the meeting that there would be no consensus.
The meeting broke up with Leatherman asking Summey to put his demands in writing. “We left shaking hands and smiling at each other and no plans,” Summey recalled.
Can a deal be made?
Since that meeting, little has been done to resurrect a deal that would create a new vision for the base. McConnell said last week that there would be no effort by the state to “push something on North Charleston that isn’t the result of a cooperative arrangement.”
Summey remains concerned that the foreclosed Noisette property will be sold in a piecemeal fashion, hurting the city’s hopes of redeveloping the northern end of the base in a cohesive way.
Summey said he liked the Commerce proposal to give the city $25 million to buy the foreclosed Noisette land. He remains a strong supporter of Noisette’s vision but acknowledged that Noisette hasn’t “developed like it should.” The company had a chance before the recession when the economy was booming but didn’t take advantage. “They missed the window.”
Summey, nevertheless, thought that state officials were trying to pull the city’s strings. “They made all these plans behind our backs. It sort of torques me. What we have here is a lack of respect. I think they came to us with sort of a last-ditch offer: Go talk to those country boys in North Charleston and throw some money on the table.”
Knott, the head of Noisette, said Friday that he was unaware of the meetings or any deal to buy the property subject to the foreclosure lawsuit. He said Noisette’s finances were sound. “We are doing very well,” he said, adding that he was “very confident” that Noisette would find financing to pay off its Capmark mortgage. He said he’s also confident that Noisette’s vision remains intact. “We have seven deals under contract, and two or three deals that are closing next week,” he said. “This project is operating very successfully.”
The secretive nature of Summey’s negotiations with Taylor irked Bob King, a North Charleston city councilman. “No one in the city knew anything about it,” he said.
Taylor sees it differently. To him the meetings were just part of an effort to talk things through in order to find an agreement that would bring in jobs and commerce and benefit everyone: North Charleston, the Lowcountry and the state.
He said the negotiations have stalled since the July meeting, not because of an impasse but because most of the key people involved were diverted by work to land Boeing’s new Dreamliner assembly plant at Charleston International Airport in North Charleston. “We all got sort of set back the last 60 to 90 days,” Taylor said.
He wouldn’t say when the efforts to find a deal with Summey would resume but said they would continue.
So the possibility of finding success is in the same hands that helped win Boeing — Taylor, Leatherman, McConnell and Summey.
“If we deal with open minds, be a little creative, we can come up with a solution that has to work for everybody.” Taylor said. “Nobody’s closed the door.”
Reach Tony Bartelme at tbartelme@postandcourier.com or 937-5554. Reach Doug Pardue at 937-5558 or dpardue@postandcourier.com.
Copyright © 1995 – 2009 Evening Post Publishing Co..
