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Change of Superfund status opens Charleston site for development

Real Estate - Commercial
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Developers want to create a town center with a mix of housing, office, retail and hospitality on a former Superfund site. (Rendering/Provided)A site that could go on to represent the largest redevelopment of formerly contaminated land in the state was recently removed from the federal Superfund list by the Environmental Protection Agency. The move clears the way for development of the Magnolia project.

Thousands of Superfund sites exist all over the country because of hazardous waste being dumped there, left out in the open, or otherwise improperly managed, according to the EPA’s website. Those sites include manufacturing facilities, processing plants, landfills and mines.

Like much of the Upper Peninsula, the Magnolia development site was once home to heavy industry, which polluted the land for decades with lead, creosote, arsenic and other contaminants from the manufacture of fertilizer and wood-treatment products. The Koppers tract, named for the wood treatment plant that operated there from 1940 to 1977, was placed in the Superfund Trust in 1994, according to the Magnolia developer, Highland Resources Inc.

Environmental cleanup of the site began after a Raleigh-based real estate investor assembled the land in 2002 from about two dozen individual tracts and began to reimage the industrial wasteland as a “new urbanist” community of homes, shops, hotels, entertainment venues and parks, Highland Resources added.

When the Environmental Protection Agency removed the site from the National Priorities List, it effectively gave Magnolia a green light to begin development on the former brownfield site. Two other federal environmental remediation sites at Magnolia, formerly owned by Columbia Nitrogen and Ashepoo Phosphate, previously had been remediated to EPA standards, according to the developer.

Clark Davis, CEO and president of Highland Resources Inc. said with evidence today and word from federal authorities who cleared the site, he doesn’t not see recontamination as a concern. Fresh soil has been put down over the span of the property, he said.

“This site has been cleaned up twice, so we have absolutely no concerns about recontamination at all,” said Craig Zeller, EPA Atlanta office project manager. “If we felt differently, we wouldn’t have cleared it for mixed-use development, so it is good to go.”

Overall environmental remediation costs have totaled $75 million to date, which included removing contaminated soil and covering an area the size of 34 football fields with a protective barrier and clean soil, said Highland Resources.

‘The next phase of the project’

It has been a decades-long undertaking to bring the 189-acre Magnolia project to life. The land is a total of nine parcels combined into one large parcel to build a one-of-a-kind mixed-use town center in Charleston proper. Magnolia is zoned for more than 4,000 residential units, 1 million square feet of office space, up to 200,000 square feet of retail space, more than 1,000 hotels rooms, multiple entertainment venues, a marina and a waterfront park along the marshy banks of the Ashley River.

The plan calls for creating multiple entertainment venues and a waterfront park along the Ashley River. (Photo/Highland Resources)The first phase will focus on the waterfront area of the property and include 150,000 square feet of retail space, 850 residential units, 300,000 square feet of office space and a luxury hotel.

The Magnolia site has been completely cleared for development, but infrastructure design and permits are in the process with the city of Charleston before construction can be started, which is expected to begin in early 2024.

“There has never been a development of this size in Charleston to this date that can be redeveloped to this magnitude, so it makes sense to use it for a mixed-use development here once the environmental issues were remedied, as close to the city core as possible to make for a sustainable green development,” said Davis “We look forward to moving into the next phase of the project, which will create a strong sense of place through engaging the waterfront with public access to the Ashley River.”

Highland is partnering with Portman Holdings to develop the Magnolia project. The Atlanta-based, private real estate firm has developed projects such as The Line in Charlotte’s South End and other projects out West.

“We are going to joint venture with Portman, because we feel we can bring more to the Charleston area in an efficient and economical fashion working together,” Davis said.

Ambrish Baisiwala, Portman chairman and CEO, said the first phase of construction will activate the waterfront, creating a public amenity for the entire community to enjoy.

“The first phase will focus on creating at least two public access points along the waterfront,” he said. “In total, Magnolia will include 24 acres of public parks, with neighborhood greens, plazas and public squares, and we will preserve all 48 acres of marshland.”

Magnolia will be a live, work, play community with more than a half-mile of waterfront and the largest open park area in Charleston, “so we want to make sure we are building sustainable designs throughout the project,” Davis said.

This site is a special opportunity to have almost 190 contiguous acres directly on the Ashley River with proximity to downtown Charleston and the historic district, said Baisiwala.

“The (Superfund) delisting is a significant milestone that allows us to move forward with the design and programming of a one-of-a-kind, mixed-use development entirely focused on activating the currently inaccessible waterfront for the community,” he added. “We’re working to transform the site with a master plan focused on walkability, green spaces, local restaurants and residential community to deliver a sustainable waterfront destination that benefits from and contributes to the essential appeal of Charleston.”

What Magnolia means for the cty of Charleston

Charleston Planning Manager Christopher Morgan said working with the developers of the site to get it cleaned up has been nearly 20 years in the making.

“This redevelopment will be really instrumental for the city, as it has the potential to be a dynamic part of the city in an area of Charleston that hasn’t contributed much for a while,” said Morgan. "Seeing the site now cleaned up is phenomenal for our city, and we are excited to see the project move along. It’s an amazing piece of property.”

Morgan also said the Magnolia site is an ideal location to create more activity along the landing with the view of the Ashley River, where Charleston was first settled. It’ll have a transit stop as well, allowing for more connectedness for the region and downtown Charleston.

Market conditions will dictate the completion of phases, said Davis, but the first phase will be the most significant, as it is set to be 20-25% of the entire site. The first phase will include multifamily units, hotels, retail, shopping, dining and the completion of the waterfront park, so residents can start taking full advantage of these amenities early in the development, Davis added.

Portman and Highland estimate the total cost of the project to be about $2 billion when the project is completed, likely in the next 12-15 years.

Once completed, Davis said they expect the development to create many jobs and have a positive impact on the Charleston community.

“We have been working with the city and neighborhood groups to make sure this is a project everyone is proud of,” he said. “The size of the project alone sets it apart, and there is nothing else like it. It’ll have a town center feel. It’ll be a place people will want to stay, live, visit.”

Highland Resources was founded by brothers George and Herman Brown, owners of Brown & Root and Texas Eastern Corp. Houston-based Highland Resources Inc. has a track record of developing residential, industrial, hospitality and office projects. Highland has accumulated and owns, or is developing, more than 32,000 acres of land and 6.2 million square feet of commercial space throughout the Southeastern United States and in Scotland.

Reach Krys at 864-640-4418.

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