City deal helps drive Magnolia project

Financing agreement between Charleston, developer aimed at revitalizing Neck Area

Financing agreement between Charleston, developer aimed at revitalizing Neck Area

Just south of the former Charleston Naval Base, the Magnolia project is applying some of the same financing structures as the Myrtle Beach project and what Noisette hopes to use.

Magnolia is a development that aims to transform a polluted section of the Neck Area into a mini-city with up to 4,400 homes and as much as 2.55 million square feet of office, retail and hotel space. The Magnolia land sits between Interstate 26 and the Ashley River, between the Rosemont community and Wagener Terrace, and for decades was home to fertilizer factories and a wood treatment plant.

As with Myrtle Beach's Market Common project, the developers are backed by deep pockets, Raleigh-based Cherokee Investment Partners, which has more than $1 billion in capital dedicated to cleaning up old industrial sites.

Unveiled in 2003, Magnolia already has cleaned up and resold about 135 acres on the old Macalloy site on the Cooper River and now has turned its attention to a 216-acre residential and commercial phase on the Ashley River side.

The developers propose building new roads, parks, bike trails and thousands of homes. The new community will be modeled after downtown Charleston, with densely built city blocks meant to encourage walking rather than driving, according to the concept plan.

Energy-saving "green buildings" are planned, and the entire development is meant to be an environmental plus for the city.

Three years ago, the city of Charleston approved a Magnolia district that would collect the future growth in property tax revenues from the area and use it to pay for the development's roads, sidewalks, parks and utility lines.

In July, the city agreed to create a tax district so the developer could raise taxes on itself if the future growth in the tax base isn't enough to pay those bonds, and City Council could consider a bond issue as early as next month.

Charleston City Attorney Charlton deSaussure said the city often is asked to pursue such deals but does so only when it seems to be the only way to lure private investment. "Magnolia has the wherewithal, the expertise, and the financial ability to undertake a mammoth cleanup effort and subsequent revitalization, working with the city," he said.

"If the city had to do this on its own, it would have had to acquire the property and then spend millions in cleanup. It's not like building the Waterfront Park."

Reach Robert Behre at 937-5771 or rbehre@postandcourier.com.