Captain Sam’s Spit continues to be the subject of litigation

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I’ve blogged about “Captain Sam’s Spit” in Kiawah Island previously. Googling that name will reveal a treasure trove of news, opinion and case law involving the proposed development of a gorgeous but extremely precarious tract of pristine beach property on South Carolina’s coast.

The South Carolina Bar’s Real Estate Intensive seminar in July of 2016 and again in July of 2018 included field trips to view this property, from a distance at least. Professor Josh Eagle of the University School of Law is an excellent tour guide, and how many opportunities do we, as lawyers, have for field trips? South Carolina Dirt lawyers should calendar the July 2020 version of this workshop.

Real estate development is my bread and butter, but two visits to the area told me that property should not be developed. A fellow field tripper, however, pointed out that the south end of Pawleys Island, where my parents took me to the beach as a child and which has been developed for many years, is just as precarious.

Captain Sam's Spit

Aerial view of Captain Sam’s Spit from The Post & Courier

The South Carolina Environmental Law Project located in Pawleys Island fights these cases. Amy Anderson, an attorney with that entity, joined us and explained the environmental issues as well as the legal battle.

Six months ago, the South Carolina Supreme Court held that a bulkhead and retaining wall could not be built to develop the property.  Just last month, however, Administrative Law Court Judge Ralph Anderson ruled that a road can be built to support the development because the economic benefits of building homes on Captain Sam’s Spit outweigh its natural preservation.

Here are greatly simplified facts in a very complicated South Carolina Supreme Court case: the developer and the community association entered into a development agreement in 1994. That agreement covered many issues, one of which was the proposed conveyance from the developer to the community association of a ten-mile strip of beachfront property, basically, the entire length of the island. A deed consummated that conveyance in 1995. All of the property conveyed was undevelopable because of the State’s jurisdictional lines.

I didn’t learn the following fact from the published case, but I learned it from one of the lawyers who was kind enough to speak with me. When the jurisdictional lines were redrawn by the State, the 4.62 acre tract became developable. The developer then took the position that the 1994 development agreement and the 1995 deed resulted from a mutual mistake, and that the parties never intended to include that tract.

The Master-in-Equity and Court of Appeals did not see it that way. Both found that the agreement and deed were unambiguous and that parole evidence of the intent of the parties was not allowable. The Supreme Court agreed.

In the recent Administrative Law Court case, Judge Anderson said the economic benefit of developing the property would include real property taxes of $5 million per year. This case is just the most recent in a decade of litigation.

Count on an appeal in this case and other litigation to follow. I’ll keep you posted!

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Charleston is exploding!

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The locals are expecting a quarter-million neighbors!

Last weekend, about sixty commercial dirt lawyers attended South Carolina Bar’s Dave Whitener Real Estate Intensive Workshop in Kiawah Island. This workshop is held every-other-year and honors the memory of the late, great real estate lawyer and law school professor who planned and moderated it for many years until his untimely death in 2014. I think Dave would have enjoyed the collaboration and education we all enjoyed last weekend*.

And I think he would have been shocked at changes in the Charleston area!

Charleston Ravenel Bridge

Charleston is exploding! Kiawah Island itself is in the throes of a major renovation anticipating its next PGA tournament in 2021. As we left Kiawah Island early Sunday morning, a time we could survey our surroundings with no traffic, we were amazed at the new subdivisions that have sprung up between the beautiful island and I-26 as well as those in the North Charleston area where the Boeing plant is located. The area is changing so fast it’s hard to recognize even for someone who does business in the area and visits it often.

I was not surprised to see this Charleston Post and Courier article entitled “105,000 homes await construction in the Charleston metro area” by David Slade dated July 18. The article begins with the premise that Charleston-area residents are about to welcome 250,000 neighbors—roughly equal to the population growth Charleston, Berkeley and Dorchester Counties have experienced since 1990. Wrap your brain around that thought! The anticipated housing, according to this report, is nearly enough to accommodate the combined populations of Charleston and neighboring Mount Pleasant, which are the largest and fourth-largest cities in South Carolina.

Traffic is already horrible in the area. We hear from many lawyer friends and their staff members who fight increasing traffic to get into work each morning. When the I-526 bridge over the Wando River was closed recently for emergency repairs, we heard that some lawyers found it easier to take boats to work rather than to deal with the detour around the bridge. The emergency repairs required for this bridge are an example of the challenged infrastructure in the area.

But, as this article points out, area governments will see added tax revenues from the new growth, which will be needed for the roads and other infrastructure. Mr. Slade points out that residents of John Island, Kiawah Island, Seabrook Island and Wadmalaw Island have been waiting for many years for planned improvements to the Maybank Highway and River Road intersection which bottlenecks each day. The islands are beautiful places to live, but getting into Charleston to work can be problematic at best.

Charleston is the number 1 tourist destination in the United States and the number 2 tourist destination in the world. All of us in the real estate business will be looking with interest as this anticipated growth unfolds in the Holy City and its surrounding areas.

 

*Among the speakers this year was Dave’s widow, also a commercial real estate lawyer extraordinaire, Patricia Wharton Whitener, and two of Dave’s best friends, litigator Robert E. Stepp and USC Law Professor S. Alan Medlin. The line-up was excellent, and I encourage other lawyers who practice in the area of commercial real estate to attend this workshop at each offering!

Development of precarious beach properties…

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Exciting for developers; problematic for environmentalists

A quick search the Internet for stories on “Captain Sam’s Spit” in Kiawah Island will reveal a treasure trove of news, opinion and case law involving the proposed development of a gorgeous but extremely precarious tract of pristine beach property on South Carolina’s coast. This link contains a picture.

The South Carolina Bar’s Real Estate Intensive seminar in July of 2016 included a field trip to view this property, from a distance at least. (And let me put in a plug for the same seminar to be held in July of 2018. Stay tuned! It will be great!)

Real estate development is my bread and butter, but one quick look told me that property should not be developed. A fellow field tripper, however, pointed out that the south end of Pawleys Island, which has been developed for many years, is just as precarious.

pawleys-island-sc

Image by www.whereverimayroamblog.com

An entity that fights these cases in our state is the South Carolina Environmental Law Project located in Pawleys Island. A recent case* fought by this entity was decided by the South Carolina Court of Appeals on September 27. This case involves a 4.62 acre tract of beachfront property on Kiawah Island, not far from Captain Sam’s Spit.

Here are greatly simplified facts in a very complicated case: the developer and the community association entered into a development agreement in 1994. That agreement covered many issues, one of which was the proposed conveyance from the developer to the community association of a ten-mile strip of beachfront property, basically, the entire length of the island. A deed consummated that conveyance in 1995. All of the property conveyed was undevelopable because of the State’s jurisdictional lines.

I didn’t learn the following fact from the case, but I learned it from one of the lawyers who was kind enough to speak with me. When the jurisdictional lines were redrawn by the State, the 4.62 acre tract became developable. The developer then took the position that the 1994 development agreement and the 1995 deed resulted from a mutual mistake, and that the parties never intended to include that tract.

The Master-in-Equity and Court of Appeals did not see it that way. Both found that the agreement and deed were unambiguous and that parole evidence of the intent of the parties was not allowable.

Simple enough, right? As the football prognosticator, Lee Corso would say, “not so fast, my friends.” If the litigation history of Captain Sam’s Spit is a barometer, litigation may continue for years over the 4.62 acre tract. Captain Sam’s Spit has been argued in the South Carolina Supreme Court four times. I understand one of the justices used the term “weary” to describe the reaction of the court to the most recent round in the battle.

Count on a petition for rehearing and an appeal in this case, at least. I’ll keep you posted!

*Kiawah Resort Associates, L.P. v. Kiawah Island Community Association, South Carolina Court of Appeals Opinion 5517 (September 27, 2016)