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Turning Phosphate Gold
Acreage in North Charleston development now boasts million dollar price tag
By Dan McCue
Staff Writer
The land at the elbow of the area’s two interstates was once a phosphate mine. Now it’s a gold mine.
With the opening of a Wal-Mart and Sam’s Club, and last year’s opening of a 35-acre Tanger Outlet Center, the price of land at the Centre Pointe development in North Charleston has shot up to more than $1 million an acre, according to the primary developers of the site.
“We’ve actually turned down deals of over $1 million an acre for out-parcel land at the site,” said Lenn Jewel, a vice president of the Weiser Companies and a partner in Centre Pointe LLC, the entities overseeing the overall development of the area.
And while that might seem like a miraculous development for the sometimes image-challenged city of North Charleston, Jewel said he’s not a bit surprised about what’s happened at Centre Pointe, which lies directly across International Boulevard from the Charleston Area Convention Center Complex.
“I’ve been around North Charleston Mayor Keith Summey and his economic development team for 10 years working on this thing,” Jewel said. “It appears that this commercial development has just exploded all of a sudden, but there have been things going on behind the scenes for quite some time to make this a reality, and there’s quite a bit more planned.”
Among those who got in before the price of the acreage reached its current dizzying heights was Richard D. Elliot, president and owner of Maverick Southern Kitchens, who confirmed he purchased a parcel at Centre Pointe, but declined to say, as has been rumored, that he’s planning a fine dining establishment to complement his highly esteemed restaurants in downtown Charleston and Mount Pleasant.
“We are looking at a number of options for development of the property,” Elliot said. “A restaurant of the type we do is a possibility, as well as a hotel, bank and office.”
Elliot has almost finished assembling a development team to oversee the project, and he suspects the team will have a plan in about 90 days, he said.
“In the meantime, it’s pure speculation.” Elliot added.
But then speculating has always been part and parcel of the story of an area that is quickly being recast as North Charleston’s new center of gravity and a hub for commercial development throughout the Lowcountry.
Balcor plan scuttled
The first entity to take a serious interest in the land that’s now turning the heads of retailers and companies in search of prime office space was the Balcor Development Co., the largest real estate syndicator in the United States.
The appeal of the empty land, a refurbished phosphate mine, is easy to fathom. Traffic projections dating back to the late 1980s, which have since been confirmed by subsequent studies, showed that by 2006, roughly 140,000 vehicles would pass the site on a daily basis on Interstate 26, with another 75,000 to 85,000 passing daily on Interstate 526.
Given that visibility, Balcor had planned to build an enclosed mall and parking facility on the site, which is about 500 acres in total. The problem, however, proved to be wetlands. Of the total property, only about 167 acres is developable high ground.
While the company looked for a way to make the project work, big changes were afoot in both the development and brokerage industries. Balcor was acquired by Shearson Loeb Rhoades Inc., one of the nation’s leading brokerage houses, which in turn was bought by American Express.
During the extended reorganization that followed, American Express decided to get out of the real estate business and began to explore selling the property.
In mid-1997, Richard Weiser, president of the Weiser Companies, and Jewel partnered with three other Washington, D.C.-based developers, including D.F. “Nick” Antonelli Jr. of The Antonelli Organization.
Their original plan was to develop about 1 million square feet in the form of a big-box center with several anchors, surrounded by hotels, restaurants and banks, Weiser said.
After an initial flirtation with Wal-Mart fell flat, the partners entertained a proposal from another developer to turn the area into a retail and sports center complex anchored by an ice skating rink.
Just as that informal deal was falling through, Wal-Mart informed Weiser that it had a change of heart. It decided to open a Super Center and to relocate its Sam’s Club from Rivers Avenue to Centre Pointe.
“That was the linchpin for what is going on there today,” Weiser said.
Including all construction costs, the Centre Pointe project’s current price tag is about $200 million. But already that investment has proven to be one that shows no let up in possible dividends.
Shops keep coming
Given the diversity of the vision that was developing, Jewel said it only made sense to position the Weiser Companies as the holder of the grand vision for the site and to sell parcels to other developers to bring the vision to fruition one step at a time.
On the heels of his deal with Wal-Mart, Weiser next entered into a deal to sell 35 acres to Tanger Factory Outlet Centers Inc. for the development of a new outlet mall adjacent to Wal-Mart and directly across a new thoroughfare from the first phase of the planned Shoppes at Centre Pointe.
While Tanger commenced creating its 90-store outlet mall, Staples and the upscale Ashley Furniture signed on to be the Shoppes’ anchor stores.
Next came a flurry of restaurants ranging from a Fatz Café, which North Charleston officials said they’ve been told has led the Spartanburg-based franchise in sales since it opened late last year, to Chick-fil-A, International House of
Pancakes and Dunkin’ Donuts, all of which are currently open.
Those currently under construction include a Hardee’s, an Atlanta Bread Company, a Golden Corral buffet, a Buffalo Wild Wings and a Jim and Nick’s Barbecue.
“Phase I has 24 stores either open or poised to open, of which four are restaurants. And when Phase II is completed, in 18 months to two years from now, we’re probably looking at a complex consisting of something like 50 stores and a dozen more restaurants than we have today,” Jewel said.
“This is North Charleston’s new downtown. And as the development begins to spread to adjacent areas like International Boulevard and Montague Avenue, I think its going to take on more and more of a feel of a hub for the entire region.”
Offices to follow
But Weiser always planned for the surging site to be more than a massive retail development.
As Tanger was being built, a five-story, 55,000-square-foot office building rose right next to it. Today, only 1,700 square feet of that building remains unleased.
“To me, right now, Centre Pointe is the boomingest place on the peninsula,” said Kim Henshaw, the Anchor Commercial agent who leased the space to, among other entities, an engineering firm, a medical practice and an international logistics company.
“All kinds of people looked in that area, including CPAs, attorneys, homebuilders, you name it. If people were in the market for office space, they took a serious interest in what’s happening here,” she said.
To Henshaw, what’s happening at and around Centre Pointe is analogous to the boom in Mount Pleasant around Towne Centre and the redevelopment of King Street in downtown Charleston.
“I think basically what North Charleston has done in fostering this development is allowed for the creation of something that will serve the breadth of the community rather than specific user groups,” she said. “And because you’re catering to everybody, you’re going to see this commercial development draw from North Charleston, Summerville, West Ashley and, yes, even Mount Pleasant and Charleston.”
Another company has begun building a 7,000-square-foot office building next to the first, and other limited liability companies are actively working on projects that would develop roughly 15 acres fronting I-526, directly adjacent to the Strayer University building that can now be seen from the roadway.
“The market dictates what’s going to come,” Henshaw said. “I mean, you wouldn’t have all these restaurants if the people weren’t already coming to the shops, and offices don’t come until you’ve got places for company employees to eat or to take care of lunch-hour tasks like running to the store.”
The future: Development
Going forward, Henshaw expects that, as Centre Pointe reaches capacity, an increasing number of developers, businesses and service providers will begin looking aggressively at Montague Avenue, she said.
“That area is about to transform itself, spinning directly off of what’s been done here,” she said. “Right now, that area is moving kind of slow, but I think that’s because people still haven’t arrived at a clear vision of what it can be.”
Bill Hantske, Centre Pointe Development LLC’s project manager, describes what’s happened on the land as the “biggest and most successful commercial development project” he’s ever been involved in.
“Our anchors, Wal-Mart, Sam’s Club and Tanger, are phenomenal, but you know, when you get right down to it, what made this a success was what made it a compelling property in the first place: its general location,” he said.
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.
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