Master Plan February, 1999 The Boudreaux Group

City council gets on–the–job training

In the spring of ’94 City Council embarked on the Air South airline venture. They were taking no risk because from the beginning it was guaranteed to fail. The Air South shutdown stiffed employees, vendors, contractors, suppliers, and other small businesses out of $60,000,000. Together the city and the state had invested $20,000,000 in start–up capital, with the state outspending the city six to one. No one on city council knew anything about the airline business, and few knew much about business in general.

Jim Gambrell One year later, spring ’95, city council embarked on another business venture. They bought 28 acres at the CCI property for $3,279,000. This time maybe one or two members of council knew something about the real estate development business. But essentially Columbia had the Air South team in charge of another business enterprise sure to fail.

The city’s office of economic development, under the direction of Jim Gambrell, managed the deal and oversaw all kinds of expenditures, there were lots of overhead items no real developer would suffer so far up front and so far from necessity. But Gambrell had never been a real estate developer, and neither had anyone on city council. Everybody was in for on–the–job–training.

There were even some opportunities for historic preservation with Cell Block #1 and the Prison Industries Building. However, neither had a real chance for survival in a practical conversion.

Many consultants and

two master plans

In April ’97, two documents were delivered to Gambrell: a market analysis and a development financial analysis. In October ’98, another document came through: neighborhood development guidelines, to include a master plan by architects RTKL of Baltimore. In the winter of ’99, a fourth document arrived at Gambrell’s office: a solicitation of interest for the development’s hotel on the canal to include a different master plan by architects Boudreaux of Columbia. What the four documents cost city council is yet to be discovered, but by the end of the fiscal year (June ’99), Gambrell had spent just under $5 million putting the property together and taking on pre–development projects.

As of June ’99, the $5 million was about where city council could have stopped and possibly broken even on a sale – possibly. City council bought 28 acres for the $3.2 million, but city council planned to sell only 25 acres for development. At the market–driven maximum of 33 rental units per acre, and at the market–driven land cost maximum of $6,000 per unit, the 25 acres possibly could have sold in late ’99 for almost $5 million – then. Now the sale parcel is less than 25 acres.

Leaving the $5 million mark

Soon after the $5 million mark, Gambrell published a small brochure, something presentable to mail around the world to attract investment in CanalSide, the name for the CCI property development. Exactly when it went out and what it cost are uncertain, but other than a small history error and the promotion of Ice Land USA as a main attraction, it was the little brochure that could. Unfortunately for city council, it could not.

The street plan laid out by Boudreaux was fine with Gambrell and fine with city council, but no one knew if the final development team would embrace it. Gambrell received another thick study, the kind with the heavy “thunk” factor when it’s placed on a conference table. This time it was April ’01 and the document was a traffic impact and access study based solely on the Boudreaux master plan. On the other hand, regardless of the CanalSide layout, the impact on Huger and Taylor and Hampton was worth investigation – just a little premature.

In early February ‘02, Gambrell got another promotional study: development guidelines, again with Boudreaux on the cover. Inside were familiar illustrations on what made the New Urbanism, an urban design trend, to include a few pictures of Columbia. It was mostly photographs of Charleston and Savannah, the same thing Disney did well over a decade ago when they built their idealized new town, Celebration, south of Orlando. It’s also what was done before Seaside was built over two decades ago. The Florida panhandle town Seaside was so idealized it was the set for The Truman Show , Jim Carey’s rare serious movie role.

Tearing down buildings

and prepping the site

Demolition cost more than it should because city council couldn’t make up its mind what buildings to save, changing its mind twice. Demolition cost almost $1 million, and it had to be done in three phases. First, the buildings no one wanted were torn down. Second, Cell Block #1 fell when its practical adaptive reuse could not be found. Third, the Boudreaux master plan recommended the Prison Industries Building be converted to a hotel, an idea never to make business sense. A real developer would have decided up front what to save and what to demolish, leaving all the demolition for one affordable phase.

Over another $1 million went into a large storm sewer system, following a street plan the winning development team might reject as they configure their own street plan for more efficient and marketable use of the real estate.

In–house management not in control

Managing all this was Gambrell and his office of economic development. His office’s annual costs were reported as $301,023, which included his salary ($111,980) and “other departmental salaries” ($93,543). The salaries might cost another 30% for personnel expense (vacation, insurance, sick leave, and the like). Gambrell’s total office costs were at least $362,680 for last year.

As head of the city’s office of economic development, Gambrell claims he spent no more than 10% of his time on CanalSide. Out of the last ten years from when city council bought CCI in ‘95, 10% is one full year. When the director spends his time on a project, the director’s abbreviated office staff dutifully spends the same time on the same project. Altogether they spent at least one year and $362,680 on CanalSide.

Trying to stop at the $9 million mark

Gambrell disclosed in early 2005 a total of $8,758,956 had already been spent on CanalSide. Add to that his one year of $362,680, and CanalSide so far has cost the city over $9 million. That’s about $5.5 million to purchase the property, demolish buildings and prep the site, and about $3.5 million to carry Gambrell and consultants either recommended by city council or introduced by Gambrell.

With over $9 million in it, the city appears to be getting about $4 million for it, according to the pending offers by the two developers bidding to buy and develop CanalSide.

Gambrell’s office of economic development and the Air South team are at another $5 million loss.

Property purchase: $3,279,000 – 1995

Demolition: $971,623

Storm sewers: $1,276,433

Sub–total: $5,527,053

Consultants: $3,500,000±

2005 Total: $9,000,000+

Current bidding to buy CanalSide: $4,000,000

Total loss to the city: $5,000,000.00