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Bi-Lo site owners shopping around plan for new East Side grocery store

December 22, 2016

Developers have a plan to lure a new grocery store to the former Bi-Lo site on Meeting Street, but getting the city’s help could be a tall order.

The owners of the property – Anthony McAlister of McAlister Development Co. and Sean Litton of the Peninsula Co. – want to raze the single-story building and replace it with a tall mixed-use complex mostly dominated by apartments and a parking deck, with a small market and a pharmacy on the ground floor. They said this week it’s the only plan that makes financial sense to bring another grocery store to the property.

The Meeting Street BiLo sits empty as the developer of the property struggles with trying to incorporate another grocery store in its plans for the property. Brad Nettles/Staff

City officials mostly agree with that part. But McAlister and Litton said the deal can only go through if the city agrees to meet certain demands, like generous zoning exceptions and a fast-track to approval.

Some city council members said they are open to concessions that would lead to a new grocery for the area, but Mayor John Tecklenburg is hesitant to give the developers too much special treatment, according to his senior advisor Josh Martin.

“We don’t think this is the last opportunity at all for a grocery store site,” Martin said Wednesday. “The grocery discussion is coming up on other sites, too.”

East Side void

McAlister and Litton have owned the property at 445 Meeting St. with other investors for a year and a half. When Bi-Lo abruptly pulled out of its 15-year lease in late September, it stunned the East Side community that has relied on the store since it first opened as a Piggly Wiggly in the 1960s.

The Meeting Street BiLo sits empty as the developer of the property struggles with trying to incorporate another grocery store in its plans for the property. Brad Nettles/Staff

Local officials scrambled to come up with solutions to what is now considered a “food desert.” Tecklenburg released a multi-step plan that included the launch of a produce market at Hampstead Square, and he promised to work with developers to bring another supermarket to the area.

Meanwhile, McAlister and Litton have met with East Side community leaders and elected officials from the district, such as City Councilman James Lewis and S.C. Rep. Wendell Gilliard, D-Charleston. The developers said they promised the community at those meetings not to sell the property for three months after Bi-Lo closed, to give them time to get another grocery store to take over the lease.

That hasn’t been successful.

The Meeting Street BiLo sits empty as the developer of the property struggles with trying to incorporate another grocery store in its plans for the property. Brad Nettles/Staff

“What’s been interesting to us is that after Bi-Lo surprised us and the city with an early move, that we haven’t had 10, 15 grocery stores begging to be on that site,” McAlister said. “What we’ve learned is that the demographics are not there. Two stores have failed, and you see all these cranes and you think all this residential is being built, but that’s not what’s going on up there.”

He said the land values in that part of downtown Charleston are too high for a single retailer to support the rent price anymore. So, the most logical thing to do is include a retailer in a larger development plan with other uses that can pay the bulk of the rent, such as apartments.

While concocting a plan that would satisfy investors and attract another grocery store, McAlister has told community leaders that he’s losing upwards of $70,000 a month, according to city documents provided to the Post and Courier through a Freedom of Information Act request.

At the same time, he said they’re turning down bids from eager buyers who’d be willing to pay well above market price for the property.

The owners said they are willing to give it a few more months to get city officials on board. McAlister said they could feasibly get the permitting process started in January, starting with a request for a Planned Unit Development.

“Then we’ve got to go raise four or five million dollars, and we’ve got to lure a store,” McAlister said. If their vision for a mixed-use development doesn’t take shape soon, they’ll have to sell the property, Litton said.

“This has to happen in such a tight window, because it’s investor risk, it’s market risk, it’s interest rate risk,” he said.

What they’re asking

McAlister met twice this month with city officials to discuss the project - one with Mayor John Tecklenburg and his senior adviser, Josh Martin, and another with mostly planning staff.

A fact sheet passed around at the latest meeting included a list of things the 2.3-acre development would need to become a reality. Martin said it was presented as a starting point for negotiations:

Density to include no less than 450 residential units.Up to 120,000 square feet of commercial space.Zoning for a “hospitality use” on the rear of the property facing the U-Haul site, which the city eventually plans to turn into a park.Help from the city subsidizing the cost of the parking deck, which would have to include at least 210 spaces for the pharmacy and grocery store.Five stories over retail facing Meeting Street and a nine-story setback, and permission to build two “bonus stories” if the U-Haul property becomes a park.An expedited approvals process.

The list also included a request for real estate tax incentives, which Martin said would be up to Charleston County Council.

The proposed project, if allowed to rise 11 stories, could be the tallest building in the area, and it would also include more units than any other apartment building currently planned in the city.

The Courier Square apartment project owned by Evening Post Industries that’s going up next door is a 2.8 acre site – about a half-acre larger – and it includes 226 apartments and 90,000 square feet of commercial space. There aren’t any plans for a grocery store there, according to Ron Owens, chief financial officer of the company, which also owns The Post and Courier.

Martin said McAlister’s requests aren’t totally outside the realm of possibility. For instance, the city has helped other developments like Elan Midtown by helping to build a city-owned parking garage on or near the project. But some requests – particularly the added density and height – might prove more problematic.

“It would be hard to even fit all of that on the site,” Martin said.

The Meeting Street BiLo sits empty as the developer of the property struggles with trying to incorporate another grocery store in its plans for the property. Brad Nettles/Staff

There will be some support for trying to make the plan work. Lewis, a city councilman who worked for years at the former grocery store, said he supports efforts to bring a new grocery store back to the site.

City Councilman Mike Seekings also expressed interest in making that happen. “We as a city have to give residents the opportunity to live in a place where they can have all the amenities they want at an affordable rate. The only way to do that in a place like downtown Charleston where you have a limited amount of dirt is to give density,” he said. “The perfect part of the city for density is the upper King Street area.”

Most likely, city officials will meet again with the developers before they apply for zoning to give a final answer on all their requests.

“We have not formally told them ‘no,’” Martin said.