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SOLD! Bull Street property under contract

An Upstate developer has signed a contract to buy the 165-acre state mental hospital campus on Bull Street in one of the most anticipated and significant land deals in city history.

Bob Hughes submitted a signed contract to the S.C. Department of Mental Health late Thursday afternoon agreeing to a total guaranteed price of $15 million to be paid on a maximum seven-year installment plan. DMH retains ownership of individual parcels until they are sold.

Columbia Mayor Steve Benjamin called the site the largest piece of land in any major city’s downtown east of the Mississippi River. A 2005 plan called for construction of more than 1,200 homes and nearly 1 million square feet of office and retail space, which would have added significantly to the city’s tax rolls. It is unclear whether Hughes will be bound by that plan.

“It fundamentally changes the map of Columbia,” Benjamin said. “We’re excited about the most significant development opportunity in this city for a generation.”

The S.C. Mental Health Commission already has approved a contract for the site’s sale negotiated by its staff attorneys and Hughes, agency attorney Mark Binkley said.

Estimates have been varied on how much the site could bring, ranging from $15 million to $20 million.However, those estimates were made before the “Great Recession” wrecked real estate values nationwide.Efforts to reach Hughes for comment were unsuccessful.

The sale now must be approved by South Carolina courts because the parcel is owned by a trust dedicated to the treatment of the mentally ill. The deal also will have to be approved by the State Budget and Control Board.

In June, the commission turned back an offer by Hughes to buy the site, which is in downtown Columbia, bounded by Bull, Calhoun and Harden streets and Colonial Drive. At the time, Binkley said Mental Health commissioners objected to “the price and the structure of the deal,” neither of which was publicly disclosed.

The site’s sale has been discussed since the 1990s. Gov. Mark Sanford revived those discussions in 2003, and planning for the site’s sale began in 2004.

“We’re encouraged that even in this intensely challenging economic environment, a deal has been reached that we believe can accrue to the taxpayers’ benefit,” Sanford’s spokesman Ben Fox said.

Efforts to sell the property bogged down in 2006, requiring a state Supreme Court ruling to identify who owned the property. Because of that delay, the property was not on the market during the land rush prior to the recession, which began in 2007.

The Supreme Court ruled a trust represented by the Mental Health Commission controlled the property, rather than the State Budget and Control Board, which manages real estate owned by the state. Still, any deal approved by the Mental Health Commission has to pass muster with a circuit judge — who will rule whether the price is fair and whether the proceeds will be used for the treatment of the mentally ill — as well as the State Budget and Control Board.

Hughes, who was part of a group that tried to rescue the never-built Green Diamond development at Interstate 77 and the Congaree River, was the only developer to make a serious offer on the Bull Street property.

The 2005 plan for the property was developed by the firm of New Urbanism guru Andres Duany. That plan called for 1,257 residential units — from single-family homes to condos and apartments — as well as 179,000 square feet of retail space and 638,000 square feet of office space.

Mental Health officials have said Hughes would not be bound by the plan, which was developed with input from the public. They have said they would sell the property without regard to the Duany plan, adding their priority in the sale is getting the most money possible for the treatment of mental health patients.

Benjamin said the Duany plan should be used as a “starting point” for the redevelopment, but that preserving several of the older buildings on the former Mental Health campus should be a priority.

“We have to make sure that, moving forward, we protect Bull Street’s architectural treasures, and as we respect these monuments to our city’s history we remain focused on building our collective future.”

Video tour of the Babcock building