Monday
Updated Market Data Report from SCAR
South Carolina REALTORS® (SCR) has released its September Statewide
Market Reports. Normalcy is returning to the housing market and all
major indices showcase a fairly robust price recovery. New Listings in the state of South Carolina increased 9.9 percent to
8,165. Pending Sales were up 8.7 percent to 4,655. Inventory levels
shrank 6.2 percent to 46,597 units. Prices moved higher as the Median
Sales Price increased 3.2 percent to $159,500. Days on Market was down
9.1 percent to 115 days. Absorption rates improved as Months Supply of
Inventory was down 20.3 percent to 8.9 months. There’s some evidence that it’s not just first-time home buyers
fueling the recovery. Move-up buyers are also pulling their weight. Some
baby boomers are ready to look for less space while the younger
generation seeks bigger space. For more information please visit www.screaltors.org
Stores announced for new North Myrtle Beach shopping center
The developer of Coastal North Town Center in North Myrtle
Beach has announced the stores that will share the center with Publix
Super Market, the first along the Grand Strand. The other stores
will include the area’s first Hobby Lobby, TJ Maxx, Ulta Beauty, Dick’s
Sporting Goods, Ross Dress for Less, Rack Room Shoes, PetSmart and
Versona Accessories, according to Phil Wilson, principal of RealtyLink,
the development company. Wilson is to announce merchants that will
occupy the center’s outparcels at a later date. They are expected to be
a mix of restaurants and smaller retail stores. The center will
have 348,000 square feet of commercial space and is expected to open
late next year, according to information from the city of North Myrtle
Beach.
Read more here: http://www.myrtlebeachonline.com/2013/10/21/3786487/neighbors-announced-for-north.html#storylink=cpy
Thursday
Construction on first new hotel in Myrtle Beach in four years delayed until after the summer
SUN NEWS -- MYRTLE BEACH, SC — The start of construction on the first new hotel in Myrtle Beach in four years has been delayed until after the summer. Crews
had aimed to start work on the 14-story Homewood Suites Oceanfront
Resort & Conference Center by the first of June, but that schedule
was too tight, said Buddy Lindsay, president of Sonship Hospitality,
which is developing the new hotel. Construction now is expected to
start Sept. 1, with the $25 million property scheduled to open Dec. 1,
2014 on the oceanfront at 1805 S. Ocean Blvd. next to the Hampton Inn
& Suites, which also is owned by Lindsay’s group. “This will
allow a much more relaxed construction schedule instead of the
‘fast-track’ schedule that we had planned,” Lindsay said in an email.
The planned $25 million Homewood hotel, which will share pools and other amenities with the Hampton Inn, will have 100 suites, a mix of two-bedroom, one-bedroom and studios, all with kitchens and private balconies. Homewood also will have a 300-seat conference center, three pools, a fire pit, fitness center, a Pilates-aerobics room for women only and a bistro serving sandwiches and snacks. This will be the only Homewood of the 399 in the chain that is on the oceanfront and the first dually branded Homewood-Hampton hotel in South Carolina, Lindsay said. Lindsay has used the extra time from the delay to visit other dually branded properties, including the first two Hampton-Homewood branded hotels in Toronto and Denver and the Hilton Garden Inn-Homewood in Atlanta, he said. The Myrtle Beach addition is the first new hotel in the city since 2009, when the south tower of the Hampton Inn opened next door to where the Homewood will be built. The beach hasn’t seen any new hotels for four years as the market tried to correct from the overbuilding of lodging units during the height of the real estate market. Demand at the Hampton Inn prompted Lindsay to expand the property, he said.
The planned $25 million Homewood hotel, which will share pools and other amenities with the Hampton Inn, will have 100 suites, a mix of two-bedroom, one-bedroom and studios, all with kitchens and private balconies. Homewood also will have a 300-seat conference center, three pools, a fire pit, fitness center, a Pilates-aerobics room for women only and a bistro serving sandwiches and snacks. This will be the only Homewood of the 399 in the chain that is on the oceanfront and the first dually branded Homewood-Hampton hotel in South Carolina, Lindsay said. Lindsay has used the extra time from the delay to visit other dually branded properties, including the first two Hampton-Homewood branded hotels in Toronto and Denver and the Hilton Garden Inn-Homewood in Atlanta, he said. The Myrtle Beach addition is the first new hotel in the city since 2009, when the south tower of the Hampton Inn opened next door to where the Homewood will be built. The beach hasn’t seen any new hotels for four years as the market tried to correct from the overbuilding of lodging units during the height of the real estate market. Demand at the Hampton Inn prompted Lindsay to expand the property, he said.
Tuesday
Off-Campus Housing to Remain Supply Constrained for Foreseeable Future
multihousingnews.com -- Campus Crest Communities provided valuable insight on trends impacting the student housing industry earlier this week at their 2012 Investor Day held in the NYSE boardroom. The company also shined some light on their strategy for success since their October 2010 IPO, when Campus Crest joined American Campus Communities and EdR in the student housing REIT arena. While the firm is still the new kid on the block, the sheer demand for purpose-built off-campus student housing is a recipe for continued portfolio growth. The meeting opened with a presentation by Michael Gallis, principal at Michael Gallis & Associates, a strategic planning and design firm. Gallis’ research presented a very bullish case on the drivers behind student housing demand, pointing out there are 13.5 million students currently enrolled in four-year undergraduate programs at large public institutions, which is 62.6 percent of all four year enrollments. Of those 13.5 million only 34 percent (or about 4.35 million) live on campus. That leaves 68 percent, or 9.16 million, living off-campus. When Gallis factors in the existing purpose-built student housing stock, the number of students renting off-campus single housing and the number of students living at home with their parents, he finds a supply gap of approximately 1.5 to 2.15 million beds. That is good news for student housing developers.
“We believe the market is going to see continued demand,” Gallis says. “Especially once you factor in population growth, enrollment growth due to the recession and the economic benefits of a degree becoming more apparent.” Other factors pointing to a strengthening market are upwards trends in international students studying in the United States, a market segment that dipped after 9/11. The disparity in cost between private and public institutions is another reason why Gallis expects public university enrollment to increase, pointing out that only 3.7 percent of public university students have defaulted on loans. Another interesting trend that Gallis’ group discovered was that non-flagship state schools were seeing a more pronounced enrollment boost, perhaps a result of students looking to specialize in technical education or other practical fields. “Individual campus markets will vary significantly, and that is going to be more of a market strategy issue,” Gallis says.
One thing is certain though, Gallis adds, and that is that supply is not poised to meet demand anytime soon. By 2022 he predicts a student housing deficiency between 2 million and 2.65 million beds without factoring in for new development. But the trio of student housing REITs is delivering about 15,000 beds a year. Twenty or so private developers are delivering about 30,000 beds a year. Gallis rounds these numbers up to 50,000 beds a year. Over the next 10 years that equates to 500,000 new beds, which brings the demand gap to between 1.5 and 2.15 million beds, the same staggering figure the industry currently benefits from. “The purpose-built student housing market is going to see growth because the pent up demand is so large, even with our conservative estimates,” Gallis says. “We think it is an embryonic segment that is still finding its place in the market place and growing. And market saturation is nowhere in sight.”
Campus Crest is aware of this deficiency and is currently on a roll identifying target markets and breaking ground. The company currently has six projects under development across the country, which will bring their total portfolio to 45 properties when complete. The six “Grove” branded assets slated for 2013 delivery have a total estimated cost of $162.7 million and will bring 3,564 beds to the market. They will sprout up outside Colorado State University, Ball State University, Washington State University, University of Oklahoma, Penn State University and Indiana University at Pennsylvania. These new properties enjoy a median distance of 0.3 miles to campus, which is even closer than the 0.5 miles to campus the rest of the portfolio enjoys. But identifying and closing on these potential sites is very hands-on work, according to Michael Hartnett, Campus Crest co-founder & chief investment officer.
“We look at enrollment, enrollment growth, the percentage of students living on campus, the percentage living off campus, the percentage receiving financial aid, etc. etc.,” Hartnett says. “We are going to these universities after they pass our litmus test of a possible location and we shop the bookstore. We look at how it is merchandised and marketed. Do they just have notebooks and pencils in there? Or is it like University of Wyoming, which was a big surprise, where they have a Clinique makeup counter and a whole Lacoste section. These are signals that kids have disposable income.”
Once Hartnett and his team have identified a new market, they hand off the torch to their regional development partners who scour the zone around campus, literally driving around in concentric circles looking for sites that are not even necessarily for sale. In fact, 90 percent of the sites the firm has purchased were done so off market. Old strip retail and fields are prime candidates for development. “The next step is to find out who owns the thing,” Hartnett adds. “Our developers and I have gone to a lot of people’s living rooms and have had bad coffee and petted a lot of ugly dogs trying to convince people to sell their sites. That is what we do. It is a hands-on, boots on-the-ground method. And I think that is what has driven the strength of our pipeline.”
Net Lease Retail Cap Rates Hit Five-Year Low
cpexecutive.com -- Cap rates for the single-tenant net leased market continued to remain
near historic lows in the fourth quarter of 2012. Most notably, cap
rates for net leased retail properties declined by 25 basis points and
are experiencing a premium in excess of 75 basis points over both office
and industrial net lease properties. Supply issues remain to be at the forefront of the net lease market
as new construction is limited and there is a lack of existing supply of
long-term net leased properties. In the fourth quarter there was a 12.5
percent decline in supply of retail net lease assets. One of the
primary factors contributing to the lack of supply and new construction
is that tenants are able to achieve low rents by backfilling second
generation retail space. Furthermore, the current interest rate
environment has enabled property owners to refinance and hold properties
at historically low rates rather than sell. The limited supply has caused the median asking versus closed cap
rate spread for net leased retail properties to decline an additional
seven basis points in comparison to last quarter. Properties located in
top tier metropolitan areas remain in the highest demand and are
experiencing the greatest cap rate compression. Some of the most notable
cap rate compression was for properties occupied by 7-Eleven,
McDonald’s and AutoZone, which experienced 20, 25 and 25 basis point
declines respectively in the fourth quarter due to the tenants’
investment grade rating and quality long-term lease structures. The national retail net lease market should remain active in 2013 due
to the stability and financing availability of this asset class. Core
assets with investment grade tenants will remain in the highest demand,
maintaining low cap rates for these assets. Cap rates will remain near
current levels in 2013 as buyer demand remains high and new development
remains limited.
Walmart Plans 500 Neighborhood Markets by 2016
chainstoreage.com -- Walmart will open as many as 115 small-format stores this year, according to Bill Simon, president and CEO of Walmart U.S. Simon discussed the chain’s store portfolio during a presentation at Raymond James Institutional Investors conference. He noted that Walmart’s smaller-format stores (below 60,000 sq. ft.) are making inroads against dollar stores, supermarkets and drug stores and will play a key role in the company's future. “They compete really well against multiple channels,” Simon said. Simon explained that Walmart thinks of its smaller-format units, which include both the Walmart Express and Walmart Neighborhood Market banners, as hybrid stores rather than specific niche competitors.
“They are more hybrid stores than you would think … they all have fresh food and pharmacy and the Walmart everyday low price promise,” he said. “And they are all enabled with.com capabilities, and Site-To-Store capabilities. So you have that endless aisle that we can offer that others might not be able to offer.” Walmart is particularly bullish on its Neighborhood Market concept, with a direct line to 500 by fiscal 2016, according to Simon. “This is a great opportunity for us, he said. “Five hundred is by no means the end. It’s merely just the beginning of what we think the opportunity might be for this format.” But the Walmart chief said the chain remains equally dedicated to its superstore concept. “Supercenters are still a great growth vehicle for us from a dollar perspective and we’ll continue to build those where we see the opportunities,” Simon said. “We’ll add about 125 new supercenters this year.”
Pawley’s Plaza Redevelopment Approved
Pawleys Plaza: Council urged to sweat the small stuff
Waccamaw Neck resident Tom Stickler wants the county to make sure Sunbelt builds the homes that are shown on its site plan. A Supreme Court ruling requires Planned Developments to have mixed uses.
Linda Ketron, founder of Bike the Neck, said she didn’t realize a planned bike path at the site was “swept off the table” at second reading. Sunbelt does not own the Bank of America property, and removed the LaPlaya property from the original plan, so it couldn’t guarantee it could build a path across those properties. Ketron reminded Council members that one of the reasons that Bike the Neck was started nearly two decades ago was so Parkersville residents could uses their bicycles to ride to a grocery store that used to be located in Pawleys Plaza. She said it would be “a very sad irony” if the reason the path was put together originally doesn’t include the new development.
Council also gave final approval to an agreement to develop a joint industrial and business park with Horry County. The 56.83-acre site is near the intersection of Highways 14 and 90.
Firms begin study of retail and hotel possibilities for downtown Conway
CONWAY — Conway residents and
businesspeople will know in less than two months if it makes sense to
open a hotel in the downtown area. Within three months, they should see what Conway can do to attract new businesses and people to the historic downtown. The
city last studied downtown marketing strategy in 2007, but much has
changed since then. The idea of a downtown hotel, Mayor Alys Lawson said
during a Monday morning meeting, “is not a new thing. It’s something
that needs to be revived.” A committee overseeing the two studies
and five of seven City Council members met with representatives of the
two firms that will do the studying for an initial overview of the scope
of their work and how it will be done. “We want something we can
use as a road map,” said Bill Graham, Conway city administrator. He
expects documents the city and downtown merchants, property owners and
residents can use together to shape a prosperous future for the city,
and particularly the downtown area.
Scott Smith of PKF Consulting in Atlanta said after the meeting that he expects his firm will have completed the first phase of its hotel feasibility study in two to three weeks. Then there will be more meetings in Conway to refine the findings with the finished document ready in another three weeks.
Tripp Muldrow of Arnette Muldrow and Associates in Greenville said his work on a retail and downtown marketing study should be ready in two to three months. A meeting is scheduled at 8 a.m. Tuesday in the City Council chamber for the firms to get initial input from residents and downtown business and property owners. Smith said the hotel study will look at what is driving demand for rooms in Conway, where people are staying now and how much they’re spending on their visits. That information will be compared with the same data from similar sized cities in S.C. Smith said his firm also will talk with the owners and managers of other hotels in Conway and get their idea of future demand for rooms.
He said that he and an associate had already seen some sites on a short tour of the downtown area and they looked pretty good. The key, though, will be to determine if there is enough off-season need for downtown hotel rooms to support the debt to build one. Conway Councilman William Goldfinch said he was glad to hear that the company will tell the city, which is funding the two studies, if a downtown hotel isn’t a good idea. Muldrow, who worked with Conway on its 2007 charette study for the downtown area, said that his company will ask businesses to track customers so it will know the market area for people who shop downtown. In return for collecting the information, he said his company will provide each business with an individual report beside factoring the information into the overall study.
“Our philosophy in doing (the study) is to work with the merchants,” Muldrow said. He said it is significant that his study will be collecting data in February since the information won’t address the impact that tourists have on business downtown. “We don’t want to discount the visitor,” Muldrow said. But they will be considered as an untabulated gift in the study. Officials need to know the year-round drawing power of the downtown area in order to advise the city what it can do to attract new businesses and shoppers. Muldrow said that one outcome of his study may be to identify needed businesses that might best locate outside the downtown area. He said his next meeting with the committee will be to share the raw data he gathers and to look at some preliminary conclusions.
Scott Smith of PKF Consulting in Atlanta said after the meeting that he expects his firm will have completed the first phase of its hotel feasibility study in two to three weeks. Then there will be more meetings in Conway to refine the findings with the finished document ready in another three weeks.
Tripp Muldrow of Arnette Muldrow and Associates in Greenville said his work on a retail and downtown marketing study should be ready in two to three months. A meeting is scheduled at 8 a.m. Tuesday in the City Council chamber for the firms to get initial input from residents and downtown business and property owners. Smith said the hotel study will look at what is driving demand for rooms in Conway, where people are staying now and how much they’re spending on their visits. That information will be compared with the same data from similar sized cities in S.C. Smith said his firm also will talk with the owners and managers of other hotels in Conway and get their idea of future demand for rooms.
He said that he and an associate had already seen some sites on a short tour of the downtown area and they looked pretty good. The key, though, will be to determine if there is enough off-season need for downtown hotel rooms to support the debt to build one. Conway Councilman William Goldfinch said he was glad to hear that the company will tell the city, which is funding the two studies, if a downtown hotel isn’t a good idea. Muldrow, who worked with Conway on its 2007 charette study for the downtown area, said that his company will ask businesses to track customers so it will know the market area for people who shop downtown. In return for collecting the information, he said his company will provide each business with an individual report beside factoring the information into the overall study.
“Our philosophy in doing (the study) is to work with the merchants,” Muldrow said. He said it is significant that his study will be collecting data in February since the information won’t address the impact that tourists have on business downtown. “We don’t want to discount the visitor,” Muldrow said. But they will be considered as an untabulated gift in the study. Officials need to know the year-round drawing power of the downtown area in order to advise the city what it can do to attract new businesses and shoppers. Muldrow said that one outcome of his study may be to identify needed businesses that might best locate outside the downtown area. He said his next meeting with the committee will be to share the raw data he gathers and to look at some preliminary conclusions.
Market Poised for Bulk Sales in Commercial Sector according to Fitch
dsnews.com -- The market is now poised for many banks to begin unloading
nonperforming assets—particularly commercial real estate—in the form of
bulk sales, according to Fitch Ratings. Tightening yield spreads in the commercial market, pressure from
regulators regarding loss reserve positions, and limited financing will
prompt banks to unload nonperforming commercial assets over the next 12
to 18 months, according to the ratings agency. “We see tightening risk spreads reflecting an influx of yield-starved investors such as hedge funds, high-yield asset managers, and other lightly regulated entities seeking higher returns in a continued low interest rate environment,” the agency stated.Fitch anticipates further tightening of spreads and a more stable commercial real estate market will encourage prospective buyers to increase their bids on commercial properties. State consumer protection laws and wider spreads in the consumer-lending market suggest bulk sales will not be as popular in this sector, according to Fitch Fitcth noted a few banks have already begun participating in bulk sales transactions, including Synovus Financial, SunTrust, and Hancock Holding Co. During the fourth quarter of 2012, Synovus completed its first bulk transaction since 2010. The $530 million sale posed a 30 percent loss rate for the bank, but Fitch noted this is an improvement from its last bulk sale two years prior when it incurred a loss rate of 40 percent. SunTrust engaged in a $740 million bulk sale in recent months with similar results. Fitch reported the sale held “just under 30 percent of carrying value.” Also in the fourth quarter, Hancock completed a $40 million bulk sale, citing “cost-savings factors” as its motive, according to Fitch. In addition to allowing banks “to focus more attention on core banking activities” unloading nonperforming real estate assets lets banks off the hook for costly upkeep, real estate taxes, property insurance, and more.
Self Storage Steps Up -- Investors find big returns in this unassuming asset
CCIM.com -- Despite the difficult economy and market challenges
during the past four years, self-storage as an asset class has continued to
provide solid performance and stable returns for investors. Once dominated by
mom and pops, or small, independent owner/operators, the self-storage industry
has evolved into a top-performing asset class during the past decade.
An Evolving Industry
Though once barely on the radars of major investors, self-storage has taken off among institutional-level investors in recent years. Since 2010, real estate investment trusts have demonstrated an almost insatiable appetite for properties larger than 45,000 net rentable square feet in the top 25 metropolitan statistical areas. In 2011, self-storage REITs boasted a handsome return of 35.4 percent — the strongest of any REIT — for the second consecutive year, according to the National Association of Real Estate Investment Trusts.Despite the changes in the self-storage industry, approximately 83 percent of these properties nationwide remain in the hands of small, independent investors, according to the 2012 Self-Storage Almanac. Most sellers today are not disposing of their assets to capitalize on the improving market. Rather, sellers are often driven by life events that motivate them to sell at a reasonable price.
With affordable capital available through debt and equity providers, small investors are starting to take advantage of self-storage investment opportunities in secondary markets. The nearly historical high spreads between capitalization rates and interest rates in secondary markets have allowed small investors to generate very compelling cash-on-cash returns.
How Does Self-Storage Stack Up?
Self-storage has managed to maintain stable occupancies throughout the economic downturn. At year-end 2012, only 4 percent of self-storage commercial mortgage-backed securities loans were in delinquent status — the lowest delinquency rate among all major commercial real estate asset classes, according to Trepp data. With cap rates hovering around 7 percent nationwide, self-storage is in line with other core real estate asset classes, according to the PwC Real Estate Investor Survey, 2Q 2012.However, the growing institutional buyer focus on properties in the top 25 MSAs has led to overall cap rate compression in these markets. The cost of capital for institutional buyers ranges from 100 to 300 basis points less than the cap rate yield, thus providing a positive return on equity for a leveraged transaction. The availability of capital through CMBS, banks, and life insurance companies provides good debt options with very aggressive terms.
Armed with enormous amounts of equity, large buyers generally concentrate on properties in excess of 45,000 sf as well as portfolio transactions. These larger facilities and portfolios have also enjoyed strong upticks in rental rates around the country, particularly in the top markets. In 2012, there were 29 self-storage portfolio transactions, creating opportunities for big investors to purchase large amounts of core self-storage assets. Cap rates for the larger deals in major MSAs range between 6 percent and 7.5 percent.
Cap rates for smaller properties and properties in secondary markets range between 8 percent and 10 percent. There are numerous financing options available for smaller properties, including banks, CMBS, and life companies that are willing to lend in the $1 million to $5 million range. Current interest rates for these loans are in the 3.5 percent to 5 percent range, giving small buyers the opportunity to realize an arbitrage of a 300- to 500-basis point spread between interest rates and cap rates. This has created very compelling cash-on-cash return for buyers today. These persisting low interest rates are a driving force behind compressed cap rates and are providing high returns to self-
storage investors overall.
During the past five years, very few self-storage projects have been developed across the country, which has allowed existing properties to enjoy the benefits of an improving economy and higher occupancies. As the economy continues to improve, new development is picking up in markets where fundamentals are strong. Further fueling this trend is banks’ willingness to consider more reasonable construction financing terms. Markets such as Denver and Dallas are leading the way with strong rental rates accompanied by high occupancies and are enticing self-storage developers to move forward with new projects or expand existing properties. Denver currently has 16 self-storage projects on the drawing board consisting of more than 1 million sf, all of which is scheduled to come on line in the next 12 to 18 months. The combination of strong returns and low default rates attracts investors to the opportunity that self-storage affords.
Drivers of Success
As Wall Street and the investment community have taken notice of self-storage as a viable commercial asset class, the underlying dynamics continue to fuel the sector’s success. Key drivers of this performance include the fact that self-storage has no need for tenant improvements or leasing commissions, which results in higher net rental income than most commercial real estate alternatives. The additional low maintenance requirements also contribute to increased bottom line performance.
The generally large tenant base and short-term nature of self-storage leases allow owners to react quickly to changing market conditions and also protect owners from long-term vacancies that occur in other commercial real estate assets. In addition, self-storage has a higher 10-year average return than any of the major property sectors. Because of these operating characteristics and the flexibility short-term leases provide the operators, self-storage continues to be underestimated by many investors.
With solid past performance and upward trending occupancies and rental rates, self-storage has captured the attention of large institutional investors as well as regional and small investors. The rising star of commercial real estate industry may not shine forever, but it appears it to be on a favorable course for the foreseeable future.
Timber in South Carolina
The SC Forestry Commission and Forest2Market, Inc., a private firm
that provides an internet based timber price reporting service, have
teamed up to give South Carolina landowners access to quarterly price
reports for major classes of forest products. The Timber Reports can be accessed below.
http://www.state.sc.us/forest/mprice.htm
http://www.state.sc.us/forest/mprice.htm
Apartment Vacancy at 10.3% in Myrtle Beach
SCREnews.com -- There was an increase in demand for multi-family units in the Myrtle Beach area over the past year. The occupancy rate improved during this time period to 89.7%. Active construction over the past year occurred at three communities in the Highway 501 submarket. The average current monthly rent rose to $768 over the past year. Communities in the Highway 501 submarket recorded the highest average monthly rent. Occupancy and rental rates should experience modest improvements in 2013.
Once feared, redevelopment of Myrtle Beach Air Force Base has been resounding success
Once feared, redevelopment of Myrtle Beach Air Force Base has been resounding success
Published: March 30, 2013
The front gate welcomes visitors to the base at
Farrow Parkway and Kings Highway.
Farrow Parkway and Kings Highway.
- Related Galleries:
- Gallery: Myrtle Beach Air Force Base- A Look Back
- Story Photos:
-
-
Environmental cleanup
Although the Air Force is no longer a landowner in Myrtle Beach, it will be actively involved for decades to come to complete environmental cleanup on the former Myrtle Beach Air Force Base.
Regulators say there are no health hazards, but groundwater at several sites has been contaminated with chemicals such as benzene and trichloroethylene. That groundwater is not a drinking water source, but it still must be cleaned up to meet federal drinking water standards.
The Air Force has spent more than $60 million to clean up environmental sites at the former base. Of the original 192 sites in the military’s base cleanup program, only about a dozen remain open.
Two of those sites will require long-term maintenance going forward. A large groundwater plume contaminated with trichloroethylene exists at Building 324, the old base engine shop. The military expects it will take until 2025 to remediate that site. Cleanup of a groundwater plume at the old Petroleum, Lubricants and Oil (POL) Yard, where jet fuel was stored, will take until 2042.
Visit MyrtleBeachOnline.com for a detailed look at existing environmental issues at the former base.
-
More information
About this series
This is the first in a multi-part series examining the history of the former Myrtle Beach Air Force Base its rebirth as a residential and commercial community success story.
Online: See a photo gallery highlighting the base’s history, a timeline and continuing coverage.
Coming Monday: How a political squabble almost thwarted the redevelopment
MYRTLE BEACH — The federal government’s report had an ominous sounding name – “Socioeconomic Impact Analysis Study.”
Its conclusions appeared to be just as ominous: the loss of nearly 5,100 jobs; as many as 1,500 homes dumped on the resale market; a 15 percent drop in students attending local schools; unemployment rates topping 20 percent; and an economic loss topping $91 million from payrolls, taxes and other revenues as soon as the Myrtle Beach Air Force Base shut down its operations.
Just as foreboding to many Myrtle Beach area residents was the sense of losing a longtime friend.
“You could never find a better neighbor than the Air Force, it was a great community,” said John Maxwell, a former Myrtle Beach city councilman who helped lead efforts to redevelop the base after its March 31, 1993 closure. Now, 20 years later, the 3,937-acre former base has been transformed into a model for how closed military facilities can be revitalized to serve their communities.
Its mix of higher-education facilities, ball fields and parks, more than 1,200 homes with more on the way, a Red Cross headquarters and Veterans Affairs clinic, new general aviation and commercial airport terminals, a new technology and aerospace business park and a centerpiece commercial district called The Market Common, with its upscale shops and restaurants, has exceeded nearly everyone’s initial vision for what the base could become. “Redevelopment of the base with The Market Common has been a great success,” said Cathy Jerrard, the Air Force’s program manager for the former Myrtle Beach base. "Compared to other [closed] bases, they are way ahead of the curve. What they’ve done there is impressive.” Buddy Styers, a Myrtle Beach native and retired Air Force colonel, has been at the helm of the Myrtle Beach Air Base Redevelopment Authority – the group in charge of creating new jobs and development at the base – since August 1995. With all of the base property transferred from the military, Styers no longer draws a fulltime paycheck but still shows up at the office at least once a week to oversee the authority’s greatly reduced workload.
Styers spends much of his time these days helping Myrtle Beach International Airport with its economic development efforts, funneling about $200,000 annually in state grant money from the authority to the airport. The grant program that’s funding that development has been extended to 2017. “Why should the authority go away when we can still help and be a benefit to the community?” Styers said, adding that the authority’s money will be used as matching funds for a ramp and taxiway at the airport’s International Technology and Aerospace Park, or ITAP.
Horry County Councilman Paul Prince, who was on the council when the base closed, said he’s “very pleased with the way things have turned out.” “We might not have felt this way at the time, but the base closing has been a blessing in disguise,” he said. “It amazes me sometimes that it’s been so successful,” Maxwell said. “I tell people that that’s going to be the center of Myrtle Beach in a few years.” Shortly after taking over as the authority’s executive director, Styers said he spoke to a community group eager to hear his vision for the base’s future.
“Being retired Air Force, I hope no one ever forgets the base was here, but I told them that someday we will make something that will be so integral and important to the community that people may have a tendency to forget the Air Force was here,” Styers said, admitting his prediction at that time was greeted with some disbelief. Today, with most of the beige and brown military buildings torn down or in reuse, many visitors and newcomers to Myrtle Beach may not realize the base once existed. But the city has kept the base history alive with a military museum at its Crabtree Gymnasium, a pair of parks – Valor Memorial Garden and Warbird Park, with its Wall of Service featuring the names of those who lived and worked at the base – and more than 150 historical markers along parks, bike paths and walkways on the base, detailing the contributions of those who served at the base. The Myrtle Beach Air Force Base was on the 1991 list of military facilities scheduled for closure by the Base Closure and Realignment Commission, the federal agency that began disposing of unneeded Department of Defense facilities two years earlier. The Myrtle Beach base started winding down its operations in late 1991 and closed for good in 1993.
While the military’s economic projections for life after the base seemed dire, some local officials were concerned that the impact was going to be much worse.
“Everybody believes we’ll rebound from this, but how long will it take?” Ashby Ward, the former president of the Myrtle Beach Area Chamber of Commerce, said at the time. “There’s going to be immediate hardship on real estate and construction.” Judy Fry, the former president of the Greater Horry County Board of Realtors, warned the base closing would bring the area’s real estate market “close to devastation.” Jack Walker, the city’s planning director and the first to envision an urban village at the base, remembers the city was “real concerned.” “Not only were we going to lose the on-base jobs, but the other off-base families that were associated with the military – civilian jobs, support jobs,” Walker said. “We knew it was going to be a real shock for us to absorb that impact.”
But even as the base was closing, other economic forces were taking shape to put the Myrtle Beach area at the forefront of national tourism destinations. Myrtle Beach was named a “metropolitan statistical area” in 1993, a Census Bureau designation that attracts the attention of chain restaurants and retailers looking to move to up-and-coming cities that might not otherwise appear on their radar.
That same year, Myrtle Beach land owner Burroughs & Chapin Co. Inc. hired its first outsider – Doug Wendel, a former public administrator – to run the family-owned company. Wendel’s arrival ushered in an aggressive era of tourism and real estate related development for B&C. Among Wendel’s first announcements was the Broadway at the Beach shopping and entertainment center, with its “New Center of Fun” slogan and pyramid-shaped Hard Rock Café and Ripley’s Aquarium as major draws.
Then, during the spring of 1995, a front-page story in The Wall Street Journal introduced Myrtle Beach and its attractions – including live-music theaters such as The Carolina Opry – to millions of readers nationwide, providing the spark for many of them to make their first visit to the Grand Strand.
By that time, Ward – who died in 2003 – had changed his mind about economic impact of the base closure. Ward said at the time that The Wall Street Journal article gave Myrtle Beach instant credibility. “It shows we’re not a moss-gathering rock,” he said. A steady influx of new businesses, jobs, visitors and retirees quickly offset the economic impact of the departing military. A few months after The Wall Street Journal discovered Myrtle Beach, American Demographics magazine dubbed the Myrtle Beach MSA the nation’s second-fastest growing area for jobs and people. As 1995 drew to a close, the air base authority and others had replaced most of the 800 civilian jobs that had been lost when the Air Force moved out of town. Among the biggest economic development announcements was electronic manufacturer AVX Corp.’s decision to build a $6 million, 58,800-square-foot research and development facility on former base property.
While the rest of Myrtle Beach was in the midst of a $1 billion building boom in the mid-1990s, redevelopment of the base proper moved at a slower pace. The authority, which was created by the governor’s executive order in 1994, knew it wanted to create an urban village, but the property’s roads, utilities and other infrastructure needed major upgrades and the authority didn’t have enough money to foot the bill. In addition, the authority was fielding requests from numerous groups – homeless advocates looking for shelters, the YMCA seeking recreational facilities, a preacher looking to build a private school, among others – who saw the opportunity for free or low-cost land.
The military had created a public benefit conveyance program in which local officials could transfer base land for free or at a reduced cost if the property was going to a group that served an important need for the community.
The authority was the final say for land transfers at the Myrtle Beach base, and some groups exerted tremendous political pressure in an attempt to get their way. “Those were probably some of the most difficult times for the authority,” Styers said. “We already had a development plan for the base, though, and the authority members stood their ground. They said, ‘This is our plan and we’re not going to change it’. They weren’t swayed by political actions. They made their decisions based on the economic and development needs of the community.” The authority eventually awarded public benefit conveyances to Horry-Georgetown Technical College for its Myrtle Beach campus, the city for its recreational needs, the Red Cross for an administrative building and property for a private, Christian school. The city also won the base’s Whispering Pines golf course for free – the area’s only municipal course – after negotiating with the Air Force.
The authority unsuccessfully applied for a free transfer of the base land under an economic development conveyance program that provided closed military property at no cost to communities struggling to rebound from economic hardships caused by base closures. The Air Force wasn’t buying the authority’s argument that it qualified for free land. “When you walk into the Pentagon and ask for special economic concessions for Myrtle Beach, you’re not met with a straight face,” Pat McCullough, who was the Southern region manager for the Air Base Conversion Agency, said in March 1995. “People all over the country think of Myrtle Beach as very prosperous. In Washington, it’s seen as a place that can stand on its own.” Three years after the military left, the authority was still struggling to find money for redevelopment. “There are a lot of specific hopes for breaking things loose on the base, more now than there’s ever been,” Harold Stowe, the authority’s chairman, said in March 1996. “But we aren’t going to support our operations beyond this year unless we generate some revenue sources pretty quickly.”
The money was slow to come, but when it finally arrived, it was a flood. In 1998, the state legislature earmarked all of the money Horry County businesses paid for Sunday liquor, beer and wine sale permits – about $1.8 million a year – to go to the authority for its operating costs. The authority continued to receive that annual amount for five years. The authority agreed to buy the 280-acre, 770-unit base housing complex from the Air Force for $5.9 million and negotiated with a local developer who agreed to fund the authority’s down payment to the military and lease the housing for $360,000 a year. Four years later, that developer bought the housing complex for $16.6 million. “We literally had no money in that deal,” Styers said, adding that the developer picked up all the costs of renovating the housing, sewer lines and roads in the community. The authority netted $10.7 million on the sale. Later, the state legislature set aside 5 percent of the state income taxes paid by federal employees at S.C. military bases for redevelopment efforts at closed facilities, including Myrtle Beach. And the authority got another $6 million from the sale of property called the Ross tract, where a theme park initially was planned and the Withers Preserve housing development now is being built.
All of the authority’s newfound wealth went toward infrastructure costs and improving community resources. For example, Styers estimates the authority has given $10 million to Horry-Georgetown Technical College for its base campus and another $6 million was spent helping the city upgrade Crabtree gymnasium and build new ball fields for its recreation programs. “We’ve put every dime back into public use,” Styers said. The authority’s biggest coup occurred after Congress changed the rules on how economic development conveyances could occur. The authority in 1997 negotiated with the Air Force to buy 420 acres of base property – including land where The Market Common was built – for nearly $9 million, with interest-only payments for the first three years. As the authority’s initial interest payment was coming due, Styers said he was summoned to a meeting with Air Force officials in Washington, D.C. “When I got there, they told me that Congress had changed the law and if I could justify why I couldn’t make that payment [for the base property] they would forgive it,” Styers said. “Needless to say, on the flight back home I wrote my justification letter, typed it up the next day and we got that payment forgiven.”
The economic development conveyance the authority had been denied in 1995 was now approved.
Styers said the Air Force “did a terrific job cooperating with us, bending over backward numerous times to make it possible for us to do what we needed.” Maxwell credits the Air Force for “allowing us to reap the rewards of land sales on the base to redevelop the land.” “Originally, all of the money that was generated from land sales was supposed to go back to the Air Force,” Maxwell said. “They changed that rule to the benefit of the communities and allowed the communities as they sold the land to put the money back into redevelopment. That made Buddy’s group a very wealthy group.”
With the public benefit conveyances out of the way and a steady revenue stream in place, the authority started leasing its land to businesses, such as Toffino’s bakery, and pouring money into infrastructure. The authority demolished 93 obsolete military buildings – including the old barracks, where Grand Lake now exists – and embarked on a $30 million improvement to the base’s roads, water and sewer lines and stormwater drainage.
However, the last piece of the development puzzle – a New Urbanism-type village with shops and restaurants on the first floor and residences above them – still existed only in the stack of planning documents and feasibility studies in Styers’ office. “There was a total lack of capacity in the local development community to understand what New Urbanism and traditional neighborhoods were all about because most of our developers were either hotel developers, shopping center developers or housing developers,” said Walker, who helped create the original urban village plan approved by the city in 1993, which eventually morphed into The Market Common project. “Developers didn’t understand retail on the first floor, housing above, mixing of uses, compact development and how when you create open space it creates quality of life,” Walker said. “Neither did the banks.”
The authority, beginning in 1999, spent three years trying to market the urban village concept to developers but got nowhere. Even some authority members were skeptical.
“Every time I mentioned urban village, they’d say ‘What in the devil is an urban village’?” Styers said. “It was hard not to get discouraged.” Walker said he was impressed that the authority stuck with the urban village plan even though some community leaders said it would never work. “The authority protected the plan,” Walker said. “Some decisions were tough and we had to do our homework to make it clear that if they would just simply take our advice on this, it would eventually work out.” Styers hired an Atlanta real estate broker to find a developer, but not one single prospect emerged in a year’s time. Frustrated with the lack of progress, Styers made one last attempt to find an urban village developer by asking local real estate brokers if they knew of anyone who might be interested. One of those brokers – Gary Roberts, owner of Coldwell Banker Chicora Real Estate – was friends with a real estate broker near Washington, D.C., named Tom Shuler, who had worked on major development projects with public companies. Roberts got in touch with his friend, who recommended New York-based Leucadia National Corp. and Chicago-based McCaffery Interests as possible developers for the Myrtle Beach site.
Leucadia is a deep-pocketed holding company with subsidiaries ranging from telecommunications and mining to banking and health care while McCaffery specializes in the redevelopment of under-performing real estate, with several urban village projects in its portfolio. Shuler brought representatives of both companies to Myrtle Beach and Roberts sold them on the local market and the potential of the base property. Leucadia and McCaffery signed a contract to develop The Market Common within two weeks of touring the site, Roberts said. The deal was announced to the public in September 2004. “It took a team of people to make this happen, and I’m just proud to have been a part of it,” Roberts said. “I think it’s one of the best things to have happened in Myrtle Beach.”
The economic key to The Market Common project was the city’s willingness to issue nearly $41 million in bonds to help pay for public infrastructure at the base, including roads, parks, water lines and other components needed to spur development.
The city used a law passed by the state legislature in the 1990s that designated the entire base as a tax increment financing district. That allowed the city to use property taxes generated by new development at the base to pay off the bonds. “Dan McCaffery [president of McCaffery Interests] told me repeatedly that if the infrastructure wasn’t in place, he wouldn’t have been interested,” Styers said, adding that McCaffery Interests brought a new level of nationally known retail and restaurant tenants, such as P.F. Chang’s China Bistro, Williams-Sonoma and Gordon Biersch Brewery Restaurant. More than three years after the initial announcement, the $160 million The Market Common project opened in April 2008 with nearly 400,000 square feet of retail and office space and 195 residential units, adding to the mix of housing available at other areas throughout the base.
“I’ve talked to a lot of the families that have moved out there and they just love it, and they don’t even have the whole package yet,” Walker said. “There are still a lot of little things that we want to be able to pull together that will make it a complete network of neighborhoods that work seamlessly as one.”
Among the projects still under construction is the International Technology & Aerospace Park, a business park located adjacent to The Market Common and the airport. The Myrtle Beach Regional Economic Development Corp. is charged with luring technology and aviation-related industries paying good wages to the park. “Probably the thing that’s the most hard to achieve, but we’re slowly getting there, is the technology campus of ITAP because people still think of us as just a beach destination resort,” Walker said. “I think we’ll get there with some aggressive marketing on the part of the airport and the county, but that’s still somewhat of a missing piece.” Walker said the city also eventually wants to extend Grand Park toward the Emory Road area to better serve the neighborhoods that are being developed at the base. There also are long-range plans to extend Fred Nash Boulevard to connect the base with Harrelson Boulevard, which stretches between U.S. 17 Business and U.S. 17 Bypass.
“That’s going to help ITAP because people are going to be able to fly in at the airport and zip right over to there without having to get on the bypass or Kings Highway,” he said. Included among the planning documents in Walker’s office at City Hall is a series of booklets dating back 20 years with different variations of an urban village project for the former base. The initial concept was simple – a small group of two-story buildings with retail on the ground floor and homes on the second floor. As the plan evolved, the bar was set higher and higher. The end result is like nothing Walker could have imagined when he first presented the concept to the City Council in the weeks before the base closed.
“I’d say that in all aspects, this exceeds everything I thought was possible,” Walker said. “When we first started, we didn’t have a crystal clear understanding of what we wanted the neighborhoods to look like. As we got more into it, the view of what could happen became clearer. Even so, we never envisioned an urban village with the quality we have out there now. We’ve done as good a job of redevelopment, if not better, than anybody I’ve ever seen.”
Its conclusions appeared to be just as ominous: the loss of nearly 5,100 jobs; as many as 1,500 homes dumped on the resale market; a 15 percent drop in students attending local schools; unemployment rates topping 20 percent; and an economic loss topping $91 million from payrolls, taxes and other revenues as soon as the Myrtle Beach Air Force Base shut down its operations.
Just as foreboding to many Myrtle Beach area residents was the sense of losing a longtime friend.
“You could never find a better neighbor than the Air Force, it was a great community,” said John Maxwell, a former Myrtle Beach city councilman who helped lead efforts to redevelop the base after its March 31, 1993 closure. Now, 20 years later, the 3,937-acre former base has been transformed into a model for how closed military facilities can be revitalized to serve their communities.
Its mix of higher-education facilities, ball fields and parks, more than 1,200 homes with more on the way, a Red Cross headquarters and Veterans Affairs clinic, new general aviation and commercial airport terminals, a new technology and aerospace business park and a centerpiece commercial district called The Market Common, with its upscale shops and restaurants, has exceeded nearly everyone’s initial vision for what the base could become. “Redevelopment of the base with The Market Common has been a great success,” said Cathy Jerrard, the Air Force’s program manager for the former Myrtle Beach base. "Compared to other [closed] bases, they are way ahead of the curve. What they’ve done there is impressive.” Buddy Styers, a Myrtle Beach native and retired Air Force colonel, has been at the helm of the Myrtle Beach Air Base Redevelopment Authority – the group in charge of creating new jobs and development at the base – since August 1995. With all of the base property transferred from the military, Styers no longer draws a fulltime paycheck but still shows up at the office at least once a week to oversee the authority’s greatly reduced workload.
Styers spends much of his time these days helping Myrtle Beach International Airport with its economic development efforts, funneling about $200,000 annually in state grant money from the authority to the airport. The grant program that’s funding that development has been extended to 2017. “Why should the authority go away when we can still help and be a benefit to the community?” Styers said, adding that the authority’s money will be used as matching funds for a ramp and taxiway at the airport’s International Technology and Aerospace Park, or ITAP.
Horry County Councilman Paul Prince, who was on the council when the base closed, said he’s “very pleased with the way things have turned out.” “We might not have felt this way at the time, but the base closing has been a blessing in disguise,” he said. “It amazes me sometimes that it’s been so successful,” Maxwell said. “I tell people that that’s going to be the center of Myrtle Beach in a few years.” Shortly after taking over as the authority’s executive director, Styers said he spoke to a community group eager to hear his vision for the base’s future.
“Being retired Air Force, I hope no one ever forgets the base was here, but I told them that someday we will make something that will be so integral and important to the community that people may have a tendency to forget the Air Force was here,” Styers said, admitting his prediction at that time was greeted with some disbelief. Today, with most of the beige and brown military buildings torn down or in reuse, many visitors and newcomers to Myrtle Beach may not realize the base once existed. But the city has kept the base history alive with a military museum at its Crabtree Gymnasium, a pair of parks – Valor Memorial Garden and Warbird Park, with its Wall of Service featuring the names of those who lived and worked at the base – and more than 150 historical markers along parks, bike paths and walkways on the base, detailing the contributions of those who served at the base. The Myrtle Beach Air Force Base was on the 1991 list of military facilities scheduled for closure by the Base Closure and Realignment Commission, the federal agency that began disposing of unneeded Department of Defense facilities two years earlier. The Myrtle Beach base started winding down its operations in late 1991 and closed for good in 1993.
While the military’s economic projections for life after the base seemed dire, some local officials were concerned that the impact was going to be much worse.
“Everybody believes we’ll rebound from this, but how long will it take?” Ashby Ward, the former president of the Myrtle Beach Area Chamber of Commerce, said at the time. “There’s going to be immediate hardship on real estate and construction.” Judy Fry, the former president of the Greater Horry County Board of Realtors, warned the base closing would bring the area’s real estate market “close to devastation.” Jack Walker, the city’s planning director and the first to envision an urban village at the base, remembers the city was “real concerned.” “Not only were we going to lose the on-base jobs, but the other off-base families that were associated with the military – civilian jobs, support jobs,” Walker said. “We knew it was going to be a real shock for us to absorb that impact.”
But even as the base was closing, other economic forces were taking shape to put the Myrtle Beach area at the forefront of national tourism destinations. Myrtle Beach was named a “metropolitan statistical area” in 1993, a Census Bureau designation that attracts the attention of chain restaurants and retailers looking to move to up-and-coming cities that might not otherwise appear on their radar.
That same year, Myrtle Beach land owner Burroughs & Chapin Co. Inc. hired its first outsider – Doug Wendel, a former public administrator – to run the family-owned company. Wendel’s arrival ushered in an aggressive era of tourism and real estate related development for B&C. Among Wendel’s first announcements was the Broadway at the Beach shopping and entertainment center, with its “New Center of Fun” slogan and pyramid-shaped Hard Rock Café and Ripley’s Aquarium as major draws.
Then, during the spring of 1995, a front-page story in The Wall Street Journal introduced Myrtle Beach and its attractions – including live-music theaters such as The Carolina Opry – to millions of readers nationwide, providing the spark for many of them to make their first visit to the Grand Strand.
By that time, Ward – who died in 2003 – had changed his mind about economic impact of the base closure. Ward said at the time that The Wall Street Journal article gave Myrtle Beach instant credibility. “It shows we’re not a moss-gathering rock,” he said. A steady influx of new businesses, jobs, visitors and retirees quickly offset the economic impact of the departing military. A few months after The Wall Street Journal discovered Myrtle Beach, American Demographics magazine dubbed the Myrtle Beach MSA the nation’s second-fastest growing area for jobs and people. As 1995 drew to a close, the air base authority and others had replaced most of the 800 civilian jobs that had been lost when the Air Force moved out of town. Among the biggest economic development announcements was electronic manufacturer AVX Corp.’s decision to build a $6 million, 58,800-square-foot research and development facility on former base property.
While the rest of Myrtle Beach was in the midst of a $1 billion building boom in the mid-1990s, redevelopment of the base proper moved at a slower pace. The authority, which was created by the governor’s executive order in 1994, knew it wanted to create an urban village, but the property’s roads, utilities and other infrastructure needed major upgrades and the authority didn’t have enough money to foot the bill. In addition, the authority was fielding requests from numerous groups – homeless advocates looking for shelters, the YMCA seeking recreational facilities, a preacher looking to build a private school, among others – who saw the opportunity for free or low-cost land.
The military had created a public benefit conveyance program in which local officials could transfer base land for free or at a reduced cost if the property was going to a group that served an important need for the community.
The authority was the final say for land transfers at the Myrtle Beach base, and some groups exerted tremendous political pressure in an attempt to get their way. “Those were probably some of the most difficult times for the authority,” Styers said. “We already had a development plan for the base, though, and the authority members stood their ground. They said, ‘This is our plan and we’re not going to change it’. They weren’t swayed by political actions. They made their decisions based on the economic and development needs of the community.” The authority eventually awarded public benefit conveyances to Horry-Georgetown Technical College for its Myrtle Beach campus, the city for its recreational needs, the Red Cross for an administrative building and property for a private, Christian school. The city also won the base’s Whispering Pines golf course for free – the area’s only municipal course – after negotiating with the Air Force.
The authority unsuccessfully applied for a free transfer of the base land under an economic development conveyance program that provided closed military property at no cost to communities struggling to rebound from economic hardships caused by base closures. The Air Force wasn’t buying the authority’s argument that it qualified for free land. “When you walk into the Pentagon and ask for special economic concessions for Myrtle Beach, you’re not met with a straight face,” Pat McCullough, who was the Southern region manager for the Air Base Conversion Agency, said in March 1995. “People all over the country think of Myrtle Beach as very prosperous. In Washington, it’s seen as a place that can stand on its own.” Three years after the military left, the authority was still struggling to find money for redevelopment. “There are a lot of specific hopes for breaking things loose on the base, more now than there’s ever been,” Harold Stowe, the authority’s chairman, said in March 1996. “But we aren’t going to support our operations beyond this year unless we generate some revenue sources pretty quickly.”
The money was slow to come, but when it finally arrived, it was a flood. In 1998, the state legislature earmarked all of the money Horry County businesses paid for Sunday liquor, beer and wine sale permits – about $1.8 million a year – to go to the authority for its operating costs. The authority continued to receive that annual amount for five years. The authority agreed to buy the 280-acre, 770-unit base housing complex from the Air Force for $5.9 million and negotiated with a local developer who agreed to fund the authority’s down payment to the military and lease the housing for $360,000 a year. Four years later, that developer bought the housing complex for $16.6 million. “We literally had no money in that deal,” Styers said, adding that the developer picked up all the costs of renovating the housing, sewer lines and roads in the community. The authority netted $10.7 million on the sale. Later, the state legislature set aside 5 percent of the state income taxes paid by federal employees at S.C. military bases for redevelopment efforts at closed facilities, including Myrtle Beach. And the authority got another $6 million from the sale of property called the Ross tract, where a theme park initially was planned and the Withers Preserve housing development now is being built.
All of the authority’s newfound wealth went toward infrastructure costs and improving community resources. For example, Styers estimates the authority has given $10 million to Horry-Georgetown Technical College for its base campus and another $6 million was spent helping the city upgrade Crabtree gymnasium and build new ball fields for its recreation programs. “We’ve put every dime back into public use,” Styers said. The authority’s biggest coup occurred after Congress changed the rules on how economic development conveyances could occur. The authority in 1997 negotiated with the Air Force to buy 420 acres of base property – including land where The Market Common was built – for nearly $9 million, with interest-only payments for the first three years. As the authority’s initial interest payment was coming due, Styers said he was summoned to a meeting with Air Force officials in Washington, D.C. “When I got there, they told me that Congress had changed the law and if I could justify why I couldn’t make that payment [for the base property] they would forgive it,” Styers said. “Needless to say, on the flight back home I wrote my justification letter, typed it up the next day and we got that payment forgiven.”
The economic development conveyance the authority had been denied in 1995 was now approved.
Styers said the Air Force “did a terrific job cooperating with us, bending over backward numerous times to make it possible for us to do what we needed.” Maxwell credits the Air Force for “allowing us to reap the rewards of land sales on the base to redevelop the land.” “Originally, all of the money that was generated from land sales was supposed to go back to the Air Force,” Maxwell said. “They changed that rule to the benefit of the communities and allowed the communities as they sold the land to put the money back into redevelopment. That made Buddy’s group a very wealthy group.”
With the public benefit conveyances out of the way and a steady revenue stream in place, the authority started leasing its land to businesses, such as Toffino’s bakery, and pouring money into infrastructure. The authority demolished 93 obsolete military buildings – including the old barracks, where Grand Lake now exists – and embarked on a $30 million improvement to the base’s roads, water and sewer lines and stormwater drainage.
However, the last piece of the development puzzle – a New Urbanism-type village with shops and restaurants on the first floor and residences above them – still existed only in the stack of planning documents and feasibility studies in Styers’ office. “There was a total lack of capacity in the local development community to understand what New Urbanism and traditional neighborhoods were all about because most of our developers were either hotel developers, shopping center developers or housing developers,” said Walker, who helped create the original urban village plan approved by the city in 1993, which eventually morphed into The Market Common project. “Developers didn’t understand retail on the first floor, housing above, mixing of uses, compact development and how when you create open space it creates quality of life,” Walker said. “Neither did the banks.”
The authority, beginning in 1999, spent three years trying to market the urban village concept to developers but got nowhere. Even some authority members were skeptical.
“Every time I mentioned urban village, they’d say ‘What in the devil is an urban village’?” Styers said. “It was hard not to get discouraged.” Walker said he was impressed that the authority stuck with the urban village plan even though some community leaders said it would never work. “The authority protected the plan,” Walker said. “Some decisions were tough and we had to do our homework to make it clear that if they would just simply take our advice on this, it would eventually work out.” Styers hired an Atlanta real estate broker to find a developer, but not one single prospect emerged in a year’s time. Frustrated with the lack of progress, Styers made one last attempt to find an urban village developer by asking local real estate brokers if they knew of anyone who might be interested. One of those brokers – Gary Roberts, owner of Coldwell Banker Chicora Real Estate – was friends with a real estate broker near Washington, D.C., named Tom Shuler, who had worked on major development projects with public companies. Roberts got in touch with his friend, who recommended New York-based Leucadia National Corp. and Chicago-based McCaffery Interests as possible developers for the Myrtle Beach site.
Leucadia is a deep-pocketed holding company with subsidiaries ranging from telecommunications and mining to banking and health care while McCaffery specializes in the redevelopment of under-performing real estate, with several urban village projects in its portfolio. Shuler brought representatives of both companies to Myrtle Beach and Roberts sold them on the local market and the potential of the base property. Leucadia and McCaffery signed a contract to develop The Market Common within two weeks of touring the site, Roberts said. The deal was announced to the public in September 2004. “It took a team of people to make this happen, and I’m just proud to have been a part of it,” Roberts said. “I think it’s one of the best things to have happened in Myrtle Beach.”
The economic key to The Market Common project was the city’s willingness to issue nearly $41 million in bonds to help pay for public infrastructure at the base, including roads, parks, water lines and other components needed to spur development.
The city used a law passed by the state legislature in the 1990s that designated the entire base as a tax increment financing district. That allowed the city to use property taxes generated by new development at the base to pay off the bonds. “Dan McCaffery [president of McCaffery Interests] told me repeatedly that if the infrastructure wasn’t in place, he wouldn’t have been interested,” Styers said, adding that McCaffery Interests brought a new level of nationally known retail and restaurant tenants, such as P.F. Chang’s China Bistro, Williams-Sonoma and Gordon Biersch Brewery Restaurant. More than three years after the initial announcement, the $160 million The Market Common project opened in April 2008 with nearly 400,000 square feet of retail and office space and 195 residential units, adding to the mix of housing available at other areas throughout the base.
“I’ve talked to a lot of the families that have moved out there and they just love it, and they don’t even have the whole package yet,” Walker said. “There are still a lot of little things that we want to be able to pull together that will make it a complete network of neighborhoods that work seamlessly as one.”
Among the projects still under construction is the International Technology & Aerospace Park, a business park located adjacent to The Market Common and the airport. The Myrtle Beach Regional Economic Development Corp. is charged with luring technology and aviation-related industries paying good wages to the park. “Probably the thing that’s the most hard to achieve, but we’re slowly getting there, is the technology campus of ITAP because people still think of us as just a beach destination resort,” Walker said. “I think we’ll get there with some aggressive marketing on the part of the airport and the county, but that’s still somewhat of a missing piece.” Walker said the city also eventually wants to extend Grand Park toward the Emory Road area to better serve the neighborhoods that are being developed at the base. There also are long-range plans to extend Fred Nash Boulevard to connect the base with Harrelson Boulevard, which stretches between U.S. 17 Business and U.S. 17 Bypass.
“That’s going to help ITAP because people are going to be able to fly in at the airport and zip right over to there without having to get on the bypass or Kings Highway,” he said. Included among the planning documents in Walker’s office at City Hall is a series of booklets dating back 20 years with different variations of an urban village project for the former base. The initial concept was simple – a small group of two-story buildings with retail on the ground floor and homes on the second floor. As the plan evolved, the bar was set higher and higher. The end result is like nothing Walker could have imagined when he first presented the concept to the City Council in the weeks before the base closed.
“I’d say that in all aspects, this exceeds everything I thought was possible,” Walker said. “When we first started, we didn’t have a crystal clear understanding of what we wanted the neighborhoods to look like. As we got more into it, the view of what could happen became clearer. Even so, we never envisioned an urban village with the quality we have out there now. We’ve done as good a job of redevelopment, if not better, than anybody I’ve ever seen.”
Burroughs & Chapin Company, Inc. Buys Barefoot Landing® Shopping, Dining And Entertainment Complex In North Myrtle Beach, S.C.
Adjacent To The Intracoastal Waterway, Barefoot Landing Was A Pioneer In The Outdoor Festival Shopping Concept With 100 Shops And Boardwalks Bridging A 27-Acre Lake
Midlandsbiz.com -- MYRTLE BEACH, SC - April 15, 2013 - Officials with Burroughs & Chapin Company, Inc., have announced that they have finalized their purchase of Barefoot Landing®, the iconic shopping, dining and entertainment center that pioneered the outdoor festival shopping concept along the Grand Strand. Nestled along the Intracoastal Waterway and built in the style of a New England fishing village, the center is located on Highway 17 in North Myrtle Beach, S.C. It is home to more than 100 specialty stores, retail shops and restaurants surrounding a 27-acre lake.
"When it was built, Barefoot Landing broke new ground as a shopping destination, and it remains a major attraction today," said Steve Warner, senior vice president of capital strategies & investments for Burroughs & Chapin Company, Inc. "We're proud to be associated with the tradition and history that Barefoot Landing embodies. With the acquisition of this iconic property, Burroughs & Chapin is deepening our commitment to being the market leader in high quality retail and entertainment attractions in the Myrtle Beach area. We believe in the strength of the Grand Strand and its potential for long-term future growth."
Barefoot Landing initially opened in 1988. Outparcels on the northern perimeter of the complex later became sites for Alabama Theatre, Alligator Adventure and House of Blues. Burroughs & Chapin's Barefoot Landing acquisition includes all buildings and land within the main complex. The three outparcels will remain independently owned. However, all shops, restaurants and other attractions, including those three, will continue to be marketed as one shopping, dining and entertainment destination.
"The acquisition of Barefoot Landing is a natural step forward for us as Burroughs & Chapin has a depth of experience with similar properties," said Patrick Walsh, senior vice president of asset management and commercial leasing with Burroughs & Chapin Company, Inc. "Our management and ownership of Broadway at the Beach has similarities with Barefoot Landing in its personality, and we share some of the same business owners in our portfolio. So, we already have good relationships with many of the current merchants at Barefoot Landing. We are looking forward to working with the merchants, residents and the community of North Myrtle Beach."
A family destination renowned for its abundant wildlife, Barefoot Landing attracts roughly seven million visitors each year. In addition to entertainment venues such as Alabama Theatre and House of Blues, it features unique attractions such as T.I.G.E.R.S. Preservation Station.
"We're very excited to add Barefoot Landing to the Burroughs & Chapin portfolio of highly successful shopping, dining and entertainment properties," said Walsh. "For more than 15 years, we've owned and managed Broadway at the Beach, which attracts 14 million visitors each year. We're looking forward to growing the number of visitors who come to Barefoot Landing. "
CCIM releases quarterly market trends for the 1st quarter of 2013. Although there were economic uncertainties related to the fiscal cliff, 2012
concluded with a deal frenzy of $98 billion in total sales, setting a
post-2007 record for the greatest amount of fourth-quarter investment
activity. CCIM’s 1Q13 Quarterly Market Trends report provides insight on
major economic drivers and CCIM members’ transaction activity in early
2013. Compiled by Lawrence Yun, Ph.D., chief economist for the National
Association of Realtors®, and George Ratiu, NAR’s manager of commercial
and qualitative research, the report provides commercial real estate
fundamentals and investment and transaction activity across the U.S. Click on the link below for the report.http://www.ccim.com/sites/default/files/2013Q1-ccim-qmt.pdf
Sun News - The local paper first reported the grocer’s plans to open a
Myrtle Beach store in January after the company appeared before the
city’s Community Appearance Board, which must sign off on design,
landscaping and sign plans for new development. The Fresh Market plans to open its store on the north end of Myrtle
Beach by the end of the year according to a company spokesperson. The upscale grocer, which opened its first area store in Pawleys
Island in 2011, plans to move into the spot at 7751 N. Kings Highway in
the Northwood Plaza Shopping Center in Myrtle Beach. It anticipates
opening late this year, spokeswoman Carly Dennis said. Fresh Market stores, aiming to create the feel of open European style
markets, have old-style butcher shops, a fish market, bakery, produce
and floral stands and a deli.
Subscribe to:
Posts (Atom)