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Above it all
Developers revive old concept with mixed-use communities
By Kathleen Dayton
Staff Writer
It may seem that developers in the Charleston area are onto something new, but they’re actually reviving a housing trend that has been around since the Middle Ages.
Homes built above commercial space are going up in clusters all over the Charleston area, as well as mixed-use neighborhoods that group townhomes, condominiums, apartments and even single-family homes with retail and office space. A central green space, park or plaza usually anchors such developments.
The trend is a component of New Urbanism, a movement among architects, planners and developers to counter the urban sprawl that emerged with the explosion of highways and suburban developments after World War II.
Old and new versions of the concept have been successful across the nation, in historic cities such as Pittsburgh as well as in newly created communities including Seaside, Fla., and Disney’s 5,000-acre Florida town, Celebration.
Hello, Charleston. Developers say your time has come.
“We just thought there was a void in the market. We’re always looking for voids, and that’s why we jumped on it,” said Mike Surles, a local real estate appraiser turned developer.
Surles has traveled the globe studying live/work spaces in places as diverse as Lisbon, Portugal, and Charlotte, N.C., for his Cambridge Square project, which will soon break ground in Mount Pleasant’s Park West neighborhood. To prepare for the project, Surles and his partners studied rooftop gardens in New York City’s Tribeca neighborhood and looked at Phillips Place and Birkdale in Charlotte.
“This is totally not new,” Surles said. “If you go to Calhoun Street, if you go to King Street, you’ve got the same thing. I was in Italy this summer and every one of those people lives above a store. It’s nothing new; it’s just coming back around.”
The trend is making headway because people are tired of having to get in cars, and climbing gas prices are making the concept of living closer to work and shopping even more attractive, Surles said.
Partnering with family members in California who have been doing live/work developments on the West Coast for some time, Surles bought all four corners around a major traffic circle in Park West for Cambridge Square. The project will have 130,000 square feet of commercial space, 22 New York-style lofts and 30 condominiums built above shops. Incorporated into the development will be Cambridge Commons, a group of 18 luxury townhomes. The first units should be available in about five months.
Surles is not going to pre-sell the units in an effort to discourage investors from buying the units and flipping them for re-sale at higher prices. He already has letters from 125 people who are interested in purchasing a home and has spoken with a number of people interested in leasing retail space, he said.
“I think I could lease the whole project by 5 o’clock, and it’s 20 minutes to five right now,” Surles said.
New versions, old concept
Various versions of the mixed-use concept are emerging in downtown, Mount Pleasant, Daniel Island and North Charleston.
“It is probably the hottest new trend in residential real estate and has been for the past 24 months,” said Pete Halter of Atlanta-based Halter Properties, which is assisting with sales and marketing for One Belle Hall, a new Mount Pleasant development.
Halter has worked on mixed-use projects around the country, including Disney’s Celebration, he said.
“You’d be astounded at the number of hot markets that are emerging,” Halter said. “Atlantic Station in Atlanta and Glenwood in Raleigh (N.C.), it’s the hottest little infill strip going. Old warehouses and houses being converted into condos with restaurants and retail on the bottom. What has happened is, there has been a change in demographics as well as psychographics as it relates to the younger consumer and the empty-nester consumer.”
Who’s buying?
The people hankering after mixed-use residences, Halter said, are largely young singles or married couples without children, with a smaller market of single parents and empty nesters.
One Belle Hall, developed by Trammell Crow Residential, sold 80% of its condominiums before they were advertised.
The project consists of 59 condominiums overlooking a park in the midst of Belle Hall Shopping Center, which includes a Harris-Teeter supermarket.
“The amenity for the resident is being right in the middle of the center,” said Robert Morgan, managing director of Trammell Crow. “We have the young professionals because they want to be in the vibrant, active communities. As well, we’re finding a lot of empty nesters, the 50-plus category. They’re either downsizing from a single-family residence or they want a smaller home. They don’t want to have to mow the lawn on Saturday and they like the convenience of being able to walk around the community, to walk the dog or window-shop.”
Trammel Crow Residential also developed 254 Seven Farms Drive, a building of condominiums above commercial space on Daniel Island. It was completed last winter and has completely sold out.
“It’s not too dissimilar from what you see downtown on Meeting or King Streets,” Morgan said. “What we’re seeing right now is a trend to see these uses in more suburban environments.”
Philip Ford, president of the Charleston Trident Homebuilding Association, said live/work developments work better in some areas than others.
“It probably works more in your urban areas than it does in the suburbs,” Ford said. “Daniel Island is basically a little city and in that case it probably would work. It’s very walkable. If you try to put it on Coleman Boulevard or U.S. Highway 17 running right through Johnnie Dodds Boulevard, I don’t know how successful that would be, because that’s designed around the automobile. In niche areas, I think they make a nice little addition to an area, but if you put them in the wrong area, I think you’ll go bankrupt.”
Developers in Charleston are studying the market and seeing what will and won’t work, he said.
As a result, niche areas in the suburbs, as well as downtown, are being turned into mini-villages.
A variation on mixed-use developments is Shelmore Village, a new live/work community being developed by Meeting Street Homes & Communities at the corner of Mathis Ferry Road and South Shelmore Boulevard, across from Mount Pleasant’s I’On neighborhood.
The three-story units are being built to accommodate shops, cafes or offices on the ground floor with a town house above, and are being sold as one unit. Buyers have multiple options: they can live and operate a business in the space, live there and lease the commercial space, or operate a business and lease the residence. The 41 units go on sale June 29 starting in the mid-$500,000s.
“We’ve been doing these types of urban communities in Charlotte for quite some time,” said Kevin Lane, division director for Meeting Street Homes & Communities. “They’re marketed toward two different types of buyers: a true investor-purchaser who wants to buy one for generating income from leasing, or an owner-occupant who may want to live there and utilize the space for themselves.”
Popping up all over
While Mount Pleasant and Daniel Island are being liberally peppered with live/work developments, the concept is emerging elsewhere in the Charleston area, including downtown, where it was commonplace 100 years ago.
PrimeSouth Group has plans for 52 condominiums on 1.2 acres at the corner of King and Calhoun Streets that will replace the building currently housing a Millennium Music store.
There will be 30,000-square feet of retail space on the ground floor and 30,000-square-feet of office space on the second floor, with an integrated parking garage.
New construction makes the project different from other lofts above retail space on King Street.
Philip Woollcott, a principle at PrimeSouth, said the company has been contacted by a number of downtown Charleston homeowners who are interested in the condos.
“They want a more contemporary floor plan, they want to do away with yard work and the plaster walls cracking,” Woollcott said. “They want to be right in the hub, and at King and Calhoun, you’re be right in the middle of everything.”
The I’On Group, much lauded for its master-planned I’On neighborhood in Mount Pleasant, is managing two new live/work developments, one in downtown Charleston and one in North Charleston.
Morris Square is the company’s downtown project at Morris and Smith Streets, with its first phase nearing completion. Only one town house remains on the
market, with 33 units pre-sold. A two-bedroom unit sold for about $449,000.
“In pre-sale, people probably got a good deal, because the trend of the market here in Charleston keeps increasing, and that area is a rising area,” said Drew Grossklaus, a spokesman for I’On Group.
The company’s North Charleston project is much larger: a high-density, 950-unit development on 43 acres at the corner of Mixson and Durant avenues. The site was formerly the location of John C. Calhoun Homes, an affordable housing community that was built decades ago.
The new project, called Mixson, will include single-family homes, condominiums and possibly a mix of commercial space with residences above.
“Here at I’On, we’re all about being walkable and sustainable, and those principles are getting to be more of a buzz word as gas prices get higher,” Grossklaus said. “Safety is another issue. When you’re in a dense setting, everybody can kind of watch out for everybody else. The streets have to be a little bit slower, with all that walkability.”
Walkability is at the heart of the New Urban movement.
“You see it in every single metropolitan area,” said Steve Filmnaowicz, communications director for the Congress for New Urbanism, a Chicago-based nonprofit founded in 1993. The group has 2,000 members worldwide and works with developers, architects, planners and others involved in creating cities and towns.
CNU president John Norquist said the proliferation of highways after World War II and the trend toward separate-use zoning all but removed businesses from residential areas.
“That led to the banal suburban office park you see today,” Norquist said. “Urban complexity adds more value per acre; it’s more efficient use of land.”
Norquist believes developers have started figuring out that urban sprawl is boring.
“You look at Charleston, every block is a sensation,” Norquist said. “It’s the complexity of Charleston that makes it so valuable and charming. These concepts shouldn’t be foreign to South Carolina, since you have so much good old fabric to learn from.”
Kathleen Dayton is a staff writer for the Business Journal. E-mail her at kdayton@charlestonbusiness.com.
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