Richland County prevails in Green Diamond lawsuit

The S.C. Supreme Court has ruled in favor of Richland County in a decade-long case brought by a Myrtle Beach company that wanted to build a $1 billion “city within a city” on farmland south of Columbia.

The court ruled that county flood rules didn’t unfairly restrict development of the “Green Diamond” site along Interstate 77, an area federal regulators had determined was in a flood plain.

Developer Burroughs & Chapin, the majority stakeholder in what was named Columbia Venture, was seeking to recoup some of its losses incurred when federal flood lines were changed to include much of the 4,500 acres of property bordering the Congaree River.

That prevented development on most of the land. The company had charged that the county, in adopting the federal lines, had engaged in an illegal “taking” of the property by not allowing it to be developed.

“In sum, we find no taking occurred,” the court wrote in a unanimous decision. “Richland County is not the ‘involuntary guarantor of the property owner’s gamble that he could develop the land as he wished despite the existing regulatory structure.’”

Wednesday’s decision follows revelations this past spring that Columbia Venture had sold off some 3,000 acres of the approximately 4,500 acres it originally wanted to develop. State Rep. Kirkman Finlay, R-Richland, was the primary buyer. He farms the area and has said he doesn’t plan to develop it.

The decision, written by Justice John Kittredge, was hailed by critics of the project, who had said Burroughs & Chapin was wrong to try to develop the land and wrong to take the county to court.

“It’s been a long-running dispute (and) I hope this opinion puts this to rest,“ said attorney Mullen Taylor, who defended Richland County in the case.

Manton Grier of Haynsworth Sinkler Boyd, who represented Columbia Venture, said he was studying the ruling and would meet with his clients. Until then he declined further comment.

Burroughs & Chapin, which bought the property in 1999, planned to build houses, shopping complexes, golf courses, hotels and nature areas on the land, near I-77 and Bluff Road. The company later created Columbia Venture when it was recruiting additional investors in the project.

The company sought reimbursement for lost property value, plus development costs and lawyer fees. Attorneys for the county earlier said the decision, had it gone against Richland County, could have cost the county $43 million.

The suit was filed in August 2004 and was stayed until 2005 as Columbia Venture challenged flood lines set by the Federal Emergency Management Agency, which placed 70 percent of the property in a floodplain, making any major development impossible.

The regulatory takings case placed a heavy burden on Columbia Venture, which had to prove it was wronged.

The court analyzed three elements: whether county regulations caused the company significant economic loss; whether the property owner had reasonable investment expectations; and whether the county’s regulations have a legitimate purpose.

The justices agreed the company lost money, but ruling with the with the county on the remaining points. The court ruled the company’s plans were speculative, rushed and depended on governmental agreements that had not been fully negotiated or inked, such as paying for improvements to levees surrounding the property and accepting the cost of maintaining them after that.

“Columbia Venture faced an uncertain path forward with very little technical data and a complex regulatory scheme,” according to the opinion. “Even Burroughs & Chapin’s Board of Directors admitted that Green Diamond was ‘purely speculative in nature.’ This complex array of moving parts, all of which needed to fall in place in order for Columbia Venture to be able to develop its Property to the extent that it hoped for, made Columbia Venture’s investment backed expectations unreasonable.”

The bulk of Columbia Venture’s remaining holdings are north of I-77 near Heathwood Hall Episcopal School and the Columbia sewage treatment plant.

The company acquired the land in the late 1990s from a popular Lower Richland farmer, the late Burwell Manning, for the development. But it ran into trouble with federal flood restrictions and had many detractors in the Columbia area.

Many people were put off by Burroughs & Chapin’s failure to provide details of its development plan and the project’s possible impact on the environment along the Congaree River.

Columbia Venture has 15 days to petition the court to rehear the case. It can also ask the U.S. Supreme Court to review the decision.

Greg Pearce, one of only two members of County Council members in office when Columbia Venture purchased the property, said he was “thrilled” with the ruling. “This has been going on for 11 years,” he said. “It’s worked its way through all manner of courts and mediation. We’ve prevailed at every juncture.”

This story was originally published August 12, 2015 at 11:47 AM with the headline "Richland County prevails in Green Diamond lawsuit."