The University of South Carolina’s private real estate arm is about to add to its growing list of downtown Columbia land buys in another move its director calls “strategic.”
The USC Development Foundation is under contract to purchase a nearly half-acre tract at the southwest corner of Main and College streets, now home to Sandy’s Famous Hot Dogs. The $1.5 million sale should be complete in two weeks, foundation executive director Russ Meekins said.
The Sandy’s property – which last year almost became a private student apartment tower despite USC’s objections – will make two purchasesin downtown Columbia in as many months for the foundation, a private, income-tax-exempt entity that wheels and deals real estate for USC’s benefit.
The buys come as USC rides a wave of new development in Columbia since the Great Recession’s end. The foundation in recent years has bought and sold Columbia property at an unprecedented rate in its 51-year history, Meekins said.
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“It’s another one of those strategic buys,” he said, referring to the foundation’s $1.1 million purchase of the S.C. Bookstore property on the same block of Main Street in early November. “Now we’ll start exploring what we’ll do there.”
The foundation is a real estate powerhouse.
The foundation’s assets were conservatively valued at $208.1 million as of June 30, foundation documents show. That total has grown from $134.3 million in 2015 and almost $79.6 million in 2014, documents and tax records show.
Meekins estimates land and buildings make up $164 million of those assets. Much of that is tied up in recent developments: the $90 million 650 Lincoln student housing project on the west side of campus and the five-story, $25 million IBM office and research building at the corner of Assembly and Blossom streets.
But the foundation’s holdings extend well beyond that.
At arm’s length
Development foundations such as USC’s are a convenient answer to a growing university’s challenges with acquiring property.
As a public entity, USC is barred by law from spending exorbitantly and needs several rounds of approvals for significant actions, such as buying property.
But the private development foundation, working at arm’s length from the university and in a separate, Barnwell Street office, is free from those restrictions.
It can buy and sell when it chooses, using money raised privately through gifts, investments, real estate deals and property rentals.
“For the university to buy a piece of property that becomes available adjacent to campus, you have to go through all the state approvals, which could take eight months,” Meekins said. “By that time, someone snaps it up and then sells it for a profit. To save money, we can go out and buy it at our risk.”
USC spokesman Wes Hickman described the foundation as an “invaluable partner to the university.”
“We appreciate the leadership demonstrated by their board, and executive director Russ Meekins, for the commitment they have to the academic and research endeavors of our students, faculty and staff,” Hickman said in an emailed statement. “In addition, the development foundation has a long track record of being a responsible landowner, good community partner and philanthropic citizen.”
Keeping an eye out
Over the years, the foundation has kept an eye on Columbia property in areas where USC would like to grow – namely, west toward the Congaree River and south toward Williams-Brice Stadium.
If a property becomes available that one day might be of use to the university, the foundation considers snapping it up. It can later sell the land to USC or another developer. Either way, the foundation controls the property’s future.
That’s how USC got the land on Gervais Street for its new, $80 million law school building, set for completion in February.
Years after USC could not pony up $2 million to buy the old Columbia Museum of Art site, the development foundation bought it in 2000 from a private developer for $3.4 million.
The foundation then traded that land to USC for property that would eventually become the Inn at USC, a 117-room boutique hotel on Pendleton Street the foundation owns and manages.
The foundation is income tax exempt but still pays property taxes on most of its holdings, Meekins said.
But those properties leave the city’s tax rolls for good when USC buys them or leases them from the foundation for certain uses.
The foundation paved the way for the construction of USC’s baseball stadium by purchasing land near the Congaree River in 2006 and selling 12 acres of it to USC for $3 million two years later.
Two years ago, the foundation spent $3.25 million in bankruptcy court to purchase nearly 300 acres of riverfront property south of USC’s downtown campus and west of Williams-Brice Stadium. Part of that land already has been turned into a practice area for USC’s golf teams, and the school plans to build recreational fields there as well.
The foundation also has been involved in public-private partnerships with USC to develop the 650 Lincoln complex, which Meekins calls a “crown jewel,” and the Center for Applied Innovation office building at Blossom and Assembly streets.
“They’re really looking into the future, without an immediate profit motive for tomorrow,” said Fred Delk, executive director of the Columbia Development Corp. “It’s a good thing for organizations like that to do, and it sounds like they’re doing a good job.”
But the deals do not always work out – nor does the land always end up in USC’s hands.
USC never found a use for a 3-acre tract on Blossom Street across from Maxcy Gregg Park that the foundation acquired in 2009. Now that land – the former Gamecocks women’s tennis courts – is up for sale.
The foundation also once held the land at 708 Pulaski St., just west of campus – a former potential destination for USC’s Greek Village. But the school instead built the village along Gervais Street.
So the foundation sold the Pulaski Street property to an out-of-town developer who put a 727-bed student housing complex there.
And the 110-unit Adesso condominium building project went south when the recession hit. Interest in the condos at Main and Blossom Streets plummeted after the building’s completion in 2006, and the foundation ended up taking a $4.6 million loss.
“We are happy that it turned out to be a quality project, but the economic timing was wrong,” Meekins said.
Wide open spaces
Not all foundation property is home to some grand structure.
About three-quarters of the foundation’s land is currently vacant, awaiting USC’s expansion or a sale, Meekins said.
That includes more than 4 acres of for-sale residential property in the Wheeler Hill neighborhood south of campus, he said.
But some vacancies prove useful in the meantime. The foundation currently owns and rents out:
▪ A Cockaboose outside Williams-Brice Stadium, which it allows USC to use for free.
▪ 35 parking spaces at Stadium Place parking lot on Bluff Road south of Williams-Brice. Twenty-six of them have been leased out to USC since 1997.
▪ Recreational fields at 737 Gadsden St., north of the Thirsty Fellow restaurant and southwest of Colonial Life Arena.
▪ 3.5 vacant acres at 707 Catawba St. for parking near USC’s baseball stadium.
▪ Almost half an acre of parking at 1211 College St. between Hunter-Gatherer Brewery & Alehouse and Cool Beans.
South Main development
Delk was not surprised to learn USC’s foundation is buying up property in the Main Street corridor south of the State House.
“That area of Main Street, I think, has amazing potential because of its proximity to the university,” Delk said. “I’m excited.”
USC has no immediate plans for the Sandy’s or S.C. Bookstore properties on Main Street. But locking them up now protects the campus and its students from potentially harmful development, Meekins said.
The school last year fought off a Memphis-based developer’s plans for a 15-story student apartment tower at Sandy’s, saying the project was too tall for its location and would cast an unwanted shadow over some of the legacy trees on the nearby Horseshoe.
Meekins predicts the foundation’s activities will slow somewhat with 650 Lincoln up and running and Columbia’s student housing boom mostly over.
Still, some of its vacant lots will eventually be built upon, and other opportunities will crop up as USC expands southward and toward the Congaree River.
“We don’t want to get ahead of our skis, obviously, so we’re trying to be sure the foundation is prudently managed,” Meekins said.