3.) In 1990, this much of Main Street was planned for a matching second tower. Last June the US Supreme Court voted 5–4 in favor of the City of New London, Connecticut. The city of New London moved to condemn the homes of Susette Kelo and her neighbors. The city’s taking action was in order to deliver the land to a private developer, ostensibly for higher use and higher property taxes. The court’s decision in Kelo v. City of New London sent shock waves across the country, including Columbia.

In essence, the decision said it was all right for a city to condemn private property owned by one citizen and then deliver it to another citizen, somehow believing the second citizen could put the property to better use.

Upon hearing the news, Governor Sanford almost immediately proposed new legislation to restrict the government’s use of eminent domain.

But the City of Columbia did not similarly react to the news. The city liked what it heard. Just a year before, the city quietly withdrew from its intentions to take the Damon’s property on Senate Street by eminent domain. The city moved to condemn the Damon’s property owned by Columbian Charlton Hall, claiming the convention center headquarters hotel couldn’t possibly locate anywhere else. The city also claimed the convention center headquarters hotel was not highly speculative.

1.) A kinder, gentler Marriott moves in where the city’s partner failed. In a legal document filed September 2003 in the Court of Common Pleas, Fifth Judicial Circuit, the City of Columbia responded to property owner Charlton Hall’s requests for admission. Hall declared the headquarters hotel highly speculative, and the city denied.

By the fall of 2003, the city’s convention center headquarters hotel had hit something above $72 million in total development costs for its proposed 300 rooms. At $240,000 per room, each room would have to collect $240 a night at 70% occupancy for the building to break even. The city’s financial pro forma for the hotel deal projected a nightly room rate of about $120 in the first year. The city apparently said collecting half the money necessary to break even did not render the project highly speculative.

Photos by Natasha Whitling4.) Under city pressure, Mrs. Lowman had to leave to make room for BB&T. Nine days later, also in September 2003, the City of Columbia filed in the same court a motion to dismiss. The city backed out of its condemnation proceedings and entered into purchase negotiations with owner Charlton Hall. In the end, the city paid about $3.7 million for a 10,000–square–foot Damon’s building which it could not use until the Damon’s lease ran out years later.

In the spring of 2004, the city also backed out of its intentions to develop and own a hotel costing twice what the market could bear.

Although it has proven itself hopelessly out of its real estate development league, the City of Columbia hates to lose its powers of public condemnation to benefit private interests. So the city is clearly not joining the governor’s push to restrict eminent domain. After all, the city has a record to defend. The outrageously expensive Damon’s deal is the most recent, but there are four other city condemnation deals over the past 25 years the governor knows about.

2.) Where the DeSoto hotel once stood and once burned 1.) SCANA

Around 1980, the city wanted SCANA to vacate the company’s offices where SCANA was assessed for property taxes at a 10.5% rate. The city suggested a move into a strawman developer’s compound where SCANA could get away occupying a building that was assessed at just 6%, a considerable property tax saving.

The proposed site was the block of Main Street with the old Palmetto Building on the southwest corner. But first the city had to push out the occupants on the east side of the 1400 block of Main Street and the south side of the 1200 block of Hampton Street and the west side of the 1400 block of Sumter Street. Soon to be seen as a typical city deal, there was a Marriott hotel planned as a major part of the development. The city called it a convention center.

The city had to threaten the streetfront retail occupants with condemnation, and the occupants had to move to make room for the Marriott, which soon failed and sold.

Also, the 25–story Palmetto Center, SCANA’s headquarters office building and home for the mayor’s law firm, was planned for Main Street as a master–lease deal, which meant SCANA could directly benefit from the 40% property tax assessment reduction.

2.) GMK

A few years later, in the early ’80s, design and development firm GMK was working with the State of SC and the City of Columbia to accommodate state agencies in their next office moves. The City of Columbia wanted the agencies to move out of their tax–free public buildings into taxed private offices, benefitting the city. USC President Holderman held out as offers for the university–owned Wade Hampton Hotel property came in. Directly across Gervais Street from the capitol, Holderman’s property was where state government wanted to go.

Holderman’s property was zoned for commercial use without any city–imposed parking requirements, but obviously parking had to come with the new AT&T tower (later Affinity, later SouthTrust, later Capitol Place) or the offices would remain empty. But the development team had the City of Columbia in tow.

The city moved to condemn the adjacent DeSoto Hotel, a Lady Street/Assembly Street tax–paying occupant in the way of the new city–built parking garage to support Holderman’s and GMK’s plans for a new office tower.

In its moves to condemn property, the city was proposing to pay for only the land, not the buildings. The DeSoto Hotel was a sound building with proven projections for adaptive re–use. The owners of the DeSoto planned to convert the building into something profitable, but the city was about to condemn the property and pay for just the land.

There was a fire, and the fire insurance paid for the building while the city paid for the land. Everybody was happy, presumably. But in a few years the land underneath the AT&T tower was sold by the county to pay delinquent property taxes, and the owners of the building filed for bankruptcy.

GMK dropped out of the development business. Holderman later went to federal prison for tax fraud concerning an unrelated and unreported income stream.

3.) Edens & Avant

Next on the city’s condemnation rolls was the west side of the 1900 block of Main Street, where C&S bank, Edens & Avant, and the mayor’s law firm planned to move into a 17–story tower. There were several thriving businesses, including Rotoreau Electric, the Richland Hotel, Li’l Rascals bar, and Columbia Grinding and Sharpening. And all were told to get ready to vacate because the city had the power of eminent domain.

They all moved out, and C&S moved in around 1990, leaving a vacant grassy lot for half of the block facing Main Street. In 2005, 15 years later, the vacant grassy lot is still there, where a matching second tower was planned for construction just a year or two after the 1990 move–in.

4.) Edens & Avant II

The development arm of Edens & Avant again got in good with the city and forced Mrs. Lowman from her property on Assembly Street, right behind the C&S tower. Using the threat of eminent domain, the city and Edens & Avant fought it out with Mrs. Lowman, pushing her off her property and out of the way of the new BB&T bank building. Mrs. Lowman’s lawyer was Tom Pope of Newberry, the SC State Senator who authored legislation to restrict public condemnation for private gain. Pope’s legislation was not enough of a deterrent. Mrs. Lowman had to leave, but she was reportedly well compensated for her cooperation under Pope’s counsel.

Itemized here are five public condemnation deals in downtown Columbia clearly oriented to benefit private interests. The US Supreme Court last June made them legally legitimate. Governor Sanford wants to make such public takings much more difficult in SC. The City of Columbia is awfully quiet on the issue, even though every one of its condemnation deals was botched. Maybe if the city stays on the real estate development learning curve long enough....