Developers of the old State Hospital campus in Columbia are ahead of schedule meeting their yearly payments to the S.C. Department of Mental Health, according to agency records.
Hughes Development Corp. of Greenville, the project’s master developer, has already paid the agency nearly $9 million of the $18.9 million total price required by 2021. That’s about $2.3 million more than the sales agreement required by 2016, records show. Another $1.3 million is due by September of this year
But the agency’s deputy director, Mark Binkley, who has shepherded the sale of the 181-acre tract since the process began in the late 1990s, said Hughes Development and its commercial real estate arm seem to have needlessly raised expectations about the timeline for building a massive, 85-store retail development on the property, generating much of the doubt that now exists about the project.
“Personally, I’d love for it to be done quicker; North Main is developing faster,” said Binkley, whose office on Colonial Drive overlooks the Bull Street retail site. “But as the agency’s interest goes, we’re all about the money. As long as the payments are made, we’ll be satisfied.”
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The redevelopment of the old State Hospital’s 181-acre campus is considered the biggest land deal in Columbia history – one that could transform a downtown that is already in a state of incredible growth. Bob Hughes, chief executive of Hughes Development Corp., was the only interested developer when the land was offered for sale eight years ago.
Robert Hughes, Hughes Development Corp.’s president and Bob Hughes’ son, said the overall project is ahead of schedule, noting that BullStreet has always been envisioned as a 20-year build-out “and we’re only 15 percent of the way there.”
“There are a lot of people who want this to go more quickly, but it’s market-driven,” he said. “We are trying to balance expectations with reality. Perhaps we haven’t fully explained the complexity of the project.”
62 acres sold
The payments to Mental Health are made from property sales and from the company’s own assets. So far, Hughes Development Corp. has logged with the mental health department sales of about 62 acres of property to interests as varied as itself, the city of Columbia, third party development companies and the University of South Carolina Development Foundation.
Hughes Development, using its own funds, purchased about 15 acres of property from the Department of Mental Health for $1.48 million and donated it for Spirit Communications Park, the mostly taxpayer-funded minor league baseball stadium that is the centerpiece of BullStreet.
It also purchased and donated to the University of South Carolina Development Foundation 8 acres for $829,000 for the university’s new medical school. Another 8 acres is to follow, Hughes said.
It has renovated a historic building, started work on another, and sold a third to another developer who has renovated it. Hughes also has a residential developer on track for the landmark Babcock Building, and has built with its own funds a 100,000-square-foot office building.
“But unfortunately you can’t see any of them from Bull Street, so people think that not much is happening,” Hughes said. “We haven’t shared enough of the good news.”
In December 2015, Hughes’ real estate brokers, Miami-based Lennar Commercial, advertised the 33-acre Commons at BullStreet as a mixed-use development that includes up to 85 total storefronts with 400,000 square feet of retail space, 275 apartments, 50,000 to 75,000 square feet of office space and a 150-room hotel.
Lennar Commercial, which has since left the project when the business was dissolved by its parent company, said last year that construction of entire complex should begin this year with completion in summer of 2018. Lennar was contracted by Hughes Commercial Properties, owned by Bob Hughes’ cousin Jackson Hughes of Greenville.
Hughes on Thursday said the project’s start may be pushed back, but developers still hope to begin in 2017.
‘They’re doing OK’
The entire 181-acre redevelopment project envisions 3,500 residential units and 1.3 million square feet of office space to be built over 20 years.
The new development is anchored by the 6,500-seat Spirit Communications Park. The park is the home of the Columbia Fireflies, a Class A minor league baseball team.
Hughes Development Corp. also built the four-story, 100,000-square-foot First Base Building adjacent to the ballpark.
The building’s fourth floor has been occupied by the Ogletree Deakins law firm and the second floor by the TCube software service provider. A Founders Federal Credit Union branch is already open on a portion of the first floor.
Recently, Cobb Theatres canceled its lease to build 10-screen luxury theater near the stadium that would have featured a restaurant and bar. The Birmingham, Ala.-based company failed to reach a parking agreement with Hughes Commercial Properties by an end of the year deadline.
Hughes Development Corp. is negotiating with another theater company for a similar project on the site, Robert Hughes said.
Two historic buildings – The Bakery and Parker Annex – have been renovated.
The Bakery is home to SOCO and The Iron Yard co-working collaborative. Parker Annex houses a development company and its first floor is for lease. Ensor, the hospital’s former morgue and research laboratory, is being gutted and renovated for a restaurant and offices.
Hughes said the project is progressing well, given the huge size of the site.
“BullStreet is zoned for 3.3 million square feet of commercial space,” he said, “which is roughly the same size as the entire Greenville central business district’s office market.”
Binkley of the mental health department said he understands and shares the public’s eagerness to see progress on the retail component of the development. But he also understands the complexity of pulling together an 85-store mixed use project.
“They’re doing OK,” he said. “I think (the delays ) are understandable. I can see both sides.”
So far, Hughes Development Corp. of Greenville has paid more than $8.8 million to the S.C. Department of Mental Health, about $2.3 million more than the the sales agreement required by Sept. 20, 2016. The total purchase price of the campus is $18.6 million and the following payment schedule is cumulative.
▪ $1.5 million by Sept. 30, 2014*
▪ $3.8 million by Sept. 30, 2015*
▪ $6.6 million by Sept. 30, 2016*
▪ $10 million by Sept. 30, 2017
▪ $13.7 million by Sept. 30, 2018
▪ $16 million by Sept. 30, 2019
▪ $17.8 million by Sept. 30, 2020
▪ $18.6 million by Sept. 30, 2021
SOURCE: S.C. Department of Mental Health
BullStreet property sales
▪ October 2014 – 14.64 acres to Hughes Development Corp. for $1.48 million. Donated to the city for Spirit Communications Park
▪ September 2015 – 19.21 acres to the city of Columbia for $1.7 million. Site of a new city park along Smith Branch Creek
▪ September 2015 – 9.48 acres to the city of Columbia for $853,000 for road right of ways.
▪ September 2015 – 3 acres to a private third party and Bull Street Development LLC for $384,000 in a three-way deal for six different parcels, including the Parker Annex Building and The Bakery.
▪ February 2016 – 3.39 acres to Montgomery Locations 2 for $739,000 for a residential development
▪ February 2016 – 1 acre to Montgomery Locations 2 for $750,000 for the same development
▪ August 2016 – 0.32 acres to Bull Street Development LLC for $28,000 to complete a parcel
▪ September 2016 – 2.66 acres to Second 50 Communities LLC for $2.3 million for a residential development
▪ December 2016 – 5 acres to Hughes Development Corp. for $570,000, donated to the University of South Carolina Development Foundation for a new medical school
▪ December 2016 – 3 acres to Hughes Development Corp. $259,000, donated to USC affiliate Bull Street Medical LLC for a new medical school.
SOURCE: S.C. Department of Mental Health