In the past month, three major downtown development projects have been delayed, scaled back or altered.
The sprawling BullStreet development on the former S.C. State Hospital campus has altered its retail plan. The Edge, a 15-story student housing tower near Richland Library, is stalled. And the Kline City Center – a planned complex of offices, a hotel and apartments on Huger Street at the State Museum – has been drastically scaled back.
BullStreet and the Kline Center represent two of the largest projects ever envisioned for downtown. The Edge is the most recent in a spate of a dozen large student housing projects that have been driving downtown’s growth.
Does this mean that downtown’s renaissance might be waning?
No, boosters say.
“We’ve had a billion dollars worth of growth in the past few years,” said Fred Delk, executive director of the Columbia Development Corp., which encourages and guides development in the Vista and other areas of downtown. “It’s just slowing down a little bit.”
Matt Kennell, president and chief executive of City Center Partnership, which encourages and guides investment in the central business district, added:
“There has been so much announced that something is going to fall out of the mix. That’s just going to happen going forward.”
And Mayor Steve Benjamin’s message was: Relax.
“We’ve only just begun,” he said. “The volume of calls that I get on a weekly basis is up dramatically. And hotel and residential lead the pack. We’ve only begun to scratch the surface.”
The biggest development facing issues is BullSreet, the redevelopment project of the 181-acre central campus of the former S.C. State Hospital on Bull Street.
Last month, master developer Hughes Development Corp. of Greenville, fired its retail recruiter, Hughes Commercial Development, also of Greenville.
Hughes Development Corp. is headed by Bob Hughes and helmed by his son, Robert Hughes. Hughes Commercial Development’s chief, Jackson Hughes, is Bob Hughes’ cousin.
So it was a tough divorce.
But Jackson Hughes had promised a huge, 400,000-square-foot retail and residential village of up to 80 stores called BullStreet Commons. The strategy called for reaching “critical mass” by striking deals with dozens of retailers and building the village all at once.
It never materialized, in large part because of a changing retail market that favors online shopping over brick-and-mortar stores.
Robert Hughes decided to market the parcels for the village in-house and in smaller chunks, opting for an “organic” progression, rather than building the whole complex at once.
Doing the right thing
The Kline Center, located at the high-profile corner of Gervais and Huger streets, is the city’s other mega-development.
The $100 million, 545,000-square-foot complex was to include 360 apartments, a mixed-use component of retail stores and more apartments, an office tower, a 140-room hotel and a public, $1 million plaza connecting the Vista with the riverfront.
But last week, the developer filed an amended plan with the city drastically scaling back the project to 218 apartments and no public component.
Russ Davis of Greenville said the reason for the pullback was the lack of funding for the public aspects of the project – $18 million for two parking garages, utilities, intersection improvements and the plaza.
The money was supposed to come from a special tax district that would take all property taxes generated by the project to pay off the bonds floated for the public infrastructure. But that would require approval of Columbia City Council, Richland County Council and the Richland 1 school board.
City Council member Howard Duvall said passage by all three was “debatable.” But he said he was encouraged that the developer chose to move ahead with the apartments anyway, and could revisit the larger project down the line.
Too much student housing?
The Edge would bring to an even dozen the number of mega-complexes targeting the rapidly growing number of University of South Carolina students. Those complexes have funneled more than 4,000 USC students into downtown in the past four years.
But the delay reported by thestate.com on Thursday is the second for the 355,000-square-foot tower, which promised to be a bridge between Main Street and the Vista. The project was stalled for six months last year because of concerns about its design.
Construction of the $70 million project on Assembly Street, designed to house more than 600 students, was scheduled to begin this past spring. St. Louis-based developer CRG/Clayco gave no reason for the delay.
“We are still pursuing the project and look forward to our continued work with Mayor (Steve) Benjamin and members of the community,” CRG’s managing director of multifamily development Russ Caplin said in a statement.
Insiders said the announcements of two other student housing projects might have given the developers pause. Those projects are the University of South Carolina’s $460 million “campus village” with 3,750 beds and a 507-bed complex on Shop Road near Williams-Brice Stadium.
But Benjamin said the developers have assured him they are targeting a 2019 opening.
Delk, of the Columbia Development Corp., said alterations to the three projects are part of downtown’s growing pains. Developers are testing the market, then adjusting their plans as the bigger picture develops.
“They are trying to find an equilibrium,” he said.
The student housing boom might be slowing, he said, but other types of development will take its place.
Developers likely will move to more market rate residential developments, which charge by the unit, rather than student housing developments, which charge by the bed.
“And I’ve got hoteliers circling,” he said. “They are looking at the fantastic occupancy rates.”
But Delk said the lack of parking garages and other public infrastructure could inhibit future development, particularly those eager hoteliers.
“The community needs to make public infrastructure improvements – parking garages, connectivity, access to the river and expansion of the convention center,” he said. “Public investment is required if we want continued growth.”