Developer shopping ‘Promenade’ to maritime industry

By Molly Parker
mparker@scbiznews.com
Published April 24, 2009

The mayors of Charleston and North Charleston say they would be open to using the Ginn Co.’s ‘Promenade’ property for a maritime-related venture.

North Charleston Mayor Keith Summey and Charleston Mayor Joe Riley both said they have been approached by local developer Robert Clement about the possibility of turning the 180-acre site into a noncontainerized break bulk cargo terminal, an intermodal facility with a rail yard serving Norfolk Southern or a logistics park — or some combination thereof. The property is located in the city of Charleston’s upper peninsula area.

Questions linger over whether the idea is even workable.

It would represent an about-face for the Florida-based Ginn Co. In the fall, the company and the city of Charleston hosted a three-day charrette to gather input on plans to create a ritzy waterfront development that would include homes, office space, businesses, at least one hotel and a public marina. As with most developments, the recession has hampered those plans.


SPECIAL REPORT

DERAILED: North Charleston, railroads, 
developers, state at odds over rail plan

Summey says ‘no deal’: Senate lawmakers have offered North Charleston a gift for the city’s cooperation in developing rail at the north end of the former Navy base, which would cut through redevelopment that has been under way for years.

Developer shopping ‘Promenade’: As plans fell apart for a mixed-use retail and residential community, developers have asked whether the state wants to develop the land as a port-related venture.

‘Port of second order’: A senior railroad official warns Charleston needs to provide shipping customers with competitive access.

“We studied it and we think a port-related activity there would be very beneficial to the region, and we would be supportive if it could help the Port of Charleston and create economic growth for the region,” Riley said.

Summey: Great idea
The property is located not far up the street from the Port of Charleston’s Columbus Street and Union Pier terminals.

Summey called the Promenade pitch a “great idea for a rail yard for Norfolk Southern” and championed the project as a solution to the complicated debate regarding how to provide Norfolk Southern and CSX with equitable access to the port’s customers. Summey’s demand is that equal access be given without rail coming from the north end onto the former Navy base, where the State Ports Authority is building a new container terminal. CSX already has access from the south.

Using the Ginn Co. property provides a workable solution for Norfolk Southern on the south end, Summey said, and would not disrupt a North Charleston-backed residential and business development slated for the former Navy base.

Furthermore, Summey said, the SPA could use the property as a roll-on/roll-off facility, servicing cargo such as the vehicles produced in the Upstate by BMW, one of Norfolk Southern’s largest customers in South Carolina.

That would free up the Union Pier’s Ro-Ro operations for other break bulk or containerized cargo operations, Summey said.

Riley said it would be up to the SPA to “ultimately say whether they thought it was the right idea.”

SPA: No, thanks
Thus far, the plan has generated little interest with the agency.

“The ports authority is familiar with the property,” SPA spokesman Byron Miller said, adding that the SPA is not interested in it.

Both S.C. Public Railways, a division of the S.C. Department of Commerce, and Norfolk Southern say it is an unworkable offer.

A facility on the Ginn property would require an expensive addition of rail line. Furthermore, trains coming out of that location would wreak havoc on downtown traffic, causing a headache for commuters and bringing the port’s Columbus Street and Union Pier terminals to a halt, said S.C. Public Railways President Jeff McWhorter.

An intermodal train load — which generally stretches the length of 100 boxcars — would have to head southeast and enter S.C. Public Railways’ line that runs along East Bay Street from the north. The train would have to go far enough into downtown Charleston to be able to go all the way onto the terminal property. Then it would have to reverse to the northeast and onto the Ginn property.

“When you look at the congestion that would result, it’s going to create more problems than it solves,” McWhorter said. “There simply is not the capacity to do it.”

Armed with a new rail study commissioned by the S.C. Department of Commerce, of which Public Railways is a division, McWhorter said the most viable option for a Norfolk Southern rail yard is on the Clemson University Restoration Institute’s property on the former Navy base. Who would build such a facility is unclear, but McWhorter notes that state government has provided these types of operations in Georgia, where the Port of Savannah has considerably advanced its market share in recent years.

Norfolk Southern would like a rail yard on or around the former Navy base, said Rob Martinez, vice president of business development for the company, based in Norfolk, Va. The options presented for south-end access thus far are not acceptable to Norfolk Southern, he said.

Norfolk: No way from the south
“There is no way we can come in from the south, because of the way the railroads are operated, to where our level of access will be equivalent to what CSX would have,” Martinez said.

A Norfolk Southern rail yard on the Ginn Co. property would still require Norfolk Southern to cross over a section of tracks owned by CSX, “which is not a workable solution,” he said. The two companies share a small swath of track in that area now, but only as part of a decades-old agreement that predates either existing company.

Even if a deal could be brokered, it would be “extraordinarily expensive,” Martinez said.

Norfolk Southern would instead like to sit down with the North Charleston mayor to see whether there is room for negotiation on the north end.

“I think Mayor Summey has every right to try to push what is in the best interest of the community, and I am hopeful that we can persuade him to a different point of view, that he can come around and see a different way of looking at this issue,” Martinez said.

For several years, Clement has said the Macalloy property on Shipyard Creek would serve as an ideal intermodal facility with a rail yard and warehousing space. CSX’s rail line runs adjacent to the property.

The concerns with that site are twofold: One, Clement’s plans would require the state to redraw its blueprint for the port access road. And though it would have to move only slightly, port and political leaders are concerned that it could open up the Army Corps of Engineers’ environmental impact study and that environmental groups could use that as a tool to derail the port project.

Second, CSX has no plans to share its rail line access with Norfolk Southern. That’s where the Promenade pitch comes into play.

Same financial backer
Unlike with the Macalloy property, Clement is not a part-owner of the Ginn Co. land. But the same holding company is backing both properties financially. A call to that private real estate equity firm, Pennsylvania-based Lubert-Adler, was not returned.

Clement also did not return a phone call seeking comment. He has provided renderings of the proposed rail yard to local city leaders and S.C. Public Railways. Clement’s spokesman, Jonathan Scott, said it makes sense for two rail yards to serve Norfolk Southern and CSX, but he declined to discuss specific plans for the Ginn Co. property.

“I would have to say it’s premature for us to be able to talk about it,” Scott said.

Reach Molly Parker at 843-849-3144.

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