by John McDermott, The Post and Courier
The State Commerce Department is proposing to sell four buildings on the old Navy base in a deal designed to spur the restoration of the historic but deteriorating Power House property.
The economic development agency is scheduled to seek approval Tuesday from the S.C. Fiscal Accountability Authority to dispose of the North Charleston structures.
Commerce acquired the buildings in 2012, when it bought 233 acres as part of a plan to develop a 90-acre rail and trucking hub to serve a future port terminal at the south end of the former base.
They are being put up for sale because they "have now been deemed surplus," the department said in a document. The proceeds will go to Commerce's Charleston-based Palmetto Railways division.
The state said an appraisal this month determined that three of the buildings are valued at $9.4 million. Known as Store House Row No. 7, No. 10 and No. 11, they contain office and warehouse space that is being leased to tenants, Bobby Hitt, head of the Commerce Department, said in a letter to the accountability authority last week.
The hulking Power House, which can't be torn down, is vacant and is unmarketable by itself, he added. It has a negative value of $995,000 and "will continue to deteriorate and become a larger liability unless it is restored," Hitt said.
The sale is being arranged in a way that the Store House Row properties can't be sold without a "suitable buyer" in place for the Power House, which Commerce called the "most prominent and architecturally significant building on the former base." Also, the terms will require that the 108-year-old neoclassic landmark be rehabilitated by a specific date. Otherwise, its ownership would go back to an "approved public entity."
Hitt said the state will seek "nominal consideration" for the North Hobson Avenue property if the top bidder can show "demonstrated experience in successfully" redeveloping historic properties. North Charleston has said in a letter that it supports that approach, he said. A city spokesman could not be reached for immediate comment.
At least one prospective bidder is looking at the deal. Hitt said Palmetto Railways has been approached by an unidentified party "who has a track record rehabilitating historic properties in Charleston and North Charleston" and is interested in acquiring all four properties. This purchaser would use available state and federal tax credits to offset some of the costs of the Power House project, he said.
The renovation promises to be expensive. Hitt said another would-be buyer who previously looked at the property "walked away when a 2015 estimate determined it would take over $15 million to rehabilitate the building and turn it in to office space."