Charleston Regional Business Journal: Summey says new Navy Yard lender doesn’t change city’s position
North Charleston Mayor Keith Summey, whose city revitalization plans are largely intertwined with the fate of the redevelopment of the former Navy Base, said he is not concerned that a new entity holds the note on a $23.8 million loan to the base’s developer.
By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Sept.1, 2010
North Charleston Mayor Keith Summey, whose city revitalization plans are largely intertwined with the fate of the redevelopment of the former Navy Base, said he is not concerned that a new entity holds the note on a $23.8 million loan to the base’s developer.
An entity called CHSA LLC on Friday purchased the note on the loan from Capmark Financial Inc. to the developer, The Noisette Co. The transaction, which puts CHSA in the position as lender, came just days before a court hearing Tuesday that was scheduled to finalize plans for a foreclosure sale of the 240 acres that secured the loan.
It’s unclear who is behind CHSA, whether the entity is seeking to take ownership of the 240 acres, and if so, for what purpose.
North Charleston Mayor Keith Summey “I can tell you that mixed use does not call for a rail going through the (north) end of the base.”
— North Charleston Mayor Keith Summey
Summey said today that he doesn’t know those answers, but that the city still has at least two measures of control over future development at the Navy base. It controls zoning, and it has an agreement with a state agency that Summey says prevents rail development on that portion of the former base.
Summey addressed speculation that Bob Faith, president of Greystar and former S.C. Secretary of Commerce, could be involved with CHSA and that the deal is linked to rail company Norfolk Southern.
Norfolk Southern officials have said they prefer to access a port terminal under construction nearby via a route that runs through the Navy base property in question.
Greystar is a Charleston-based real estate company that focuses on apartment development and management nationwide.
After hearing that Faith could be involved in purchasing the note, Summey said he called him early last week to ask about it.
“He told me he was under a confidentiality agreement and could not openly discuss it because of that,” Summey said.
Summey said the comment indicates that Faith was likely involved in some effort to purchase the note, but that he doesn’t know whether Faith is involved in the entity that actually made the purchase.
Many groups have talked about purchasing the note over the past year, Summey said.
“Whether he was in the group that bought the note, I am not positive,” Summey said.
The Business Journal’s efforts to reach Faith over the past two days have been unsuccessful. Greystar officials referred questions to a third-party spokesman, who has not responded to calls and e-mails.
Summey said he asked Faith if he was working with Norfolk Southern on the takeover.
“He said that was no more than a rumor,” Summey said.
The mayor said he also talked to Faith about potential changes on the property if he did ultimately control it.
“He said that there would need to be some tweaking to the zoning,” Summey said. “That’s fine as long as that does not damage the overall plan that we have for the future there.”
Summey said he wouldn’t object to minor changes to the zoning, which currently enables mixed-use development.
“I can tell you that mixed use does not call for a rail going through the (north) end of the base,” Summey said.
The discussion is the same one that has been ongoing since Capmark Financial filed for foreclosure last summer, leaving the future of the Navy Yard at Noisette redevelopment project uncertain.
The foreclosure suit involves about 240 acres of the full 340-acre project.
Summey said that even with a new entity involved following a last-minute transaction that closed Friday, little has changed from the city’s point of view.
He said North Charleston City Council has not discussed bidding on the land to prevent future uncertainty. He cited the city’s ultimate control of the land through zoning and a 2002 memorandum of understanding with the S.C. State Ports Authority calling for rail access to the new port terminal from the south side of the property, not the north.
“I see us in no different stance than we were prior to this,” Summey said.
In court yesterday, Charleston County Master-in-Equity Mikell Scarborough ordered a sale of the 240 acres, divided into three parts, through a 60-day process that starts today. Written bids will be accepted through Nov. 1.
If bids received by that date do not cover the debt, the lender could reject them and proceed to a traditional auction on the full 240 acres on Dec. 7.
Reach Ashley Fletcher Frampton at 843-849-3129.
