Legal battle over hotel approvals highlights Charleston's accommodations angst 

Hotel Hell

click to enlarge The approval of two neighboring 50-room hotels on North Market and Anson streets is being contested by nearby property owners

Dustin Waters

The approval of two neighboring 50-room hotels on North Market and Anson streets is being contested by nearby property owners

Examining the rapid growth in the downtown hotel market, a recently completed study by city staff offers new insight on a few problems with Charleston's current system.

Conducted by the Department of Planning, Preservation, and Sustainability, along with the Division of Business and Neighborhood Services, the study came about as a compromise after Mayor John Tecklenburg proposed a moratorium on new hotel approvals on the peninsula. With several members of City Council unwilling to completely pull the plug on any new projects, city staff was tasked with figuring out where Charleston stood in terms of new accommodations popping up downtown. The results of the study have led to a proposal to add a few additional hurdles for developers planning to construct hotels on the peninsula. The new rules still await a vote from City Council, but that hasn't stopped other groups from opposing projects they feel abuse the current regulations.

This past spring, a lawsuit was brought against the city's Board of Zoning Appeals for the approval of two 50-room hotels on North Market and Anson streets. The board granted variances for the projects that would permit the construction of a three-story building in the Old City Height District. Developments in this area are usually limited to two-and-a-half stories, but the developer states that the added half-floor does not infringe upon the allowable height for the district.

The owner of two buildings on East Bay Street in the area of the City Market— identified in the suit as 241-243 East Bay Holdings LLC — claims that the approval of the proposed projects was "unlawful, arbitrary, and capricious, contrary to the applicable city ordinances, and beyond the powers of the BZA," according to court documents. Chief among the owner's complaints are claims that current plans do not account for the added strain of congestion and limited parking that would be created by the projects, which would sit next to one another. Specifically, the suit alleges that the developer — named in the complaint as Rainbow Market Group LLC — failed to provide the minimum number of off-street parking spaces and the traffic study associated with the project was inadequate.

These particular projects also gained specific mention in the recent hotel study under a section titled "Circumventing the 50-Room Limit." According to the final report, "The separate approvals of two adjacent 50-room hotels (for example, 2 Anson St. and 40-44 North Market St.) exhibits a disregard for the intent of the 50-room limit first imposed in 1998. We recommend strengthening the special exception criteria in the current Accommodations Overlay Zone to ensure that the intent of the 50-room limit is honored."

Under the current ordinance, which was last amended in 2013, the 50-room limit line currently runs along the Septima P. Clark Parkway. According to the Planning Department's report, this essentially limits all new hotel uses south of this boundary to 50 rooms or less, but several small parcels scattered across the peninsula were carried over to allow for larger hotels. Also, an area bound by King, Meeting, Mary, and Line streets can exceed the 50-room limit if the buildings include 20,000 square feet or more of conference space, as well as an on-site restaurant that serves breakfast, lunch, and dinner seven days a week.

In response to the suit, the defendants argue that both hotels function as separate units. Last October, an applicant submitted plans for the construction of two hotels on the Anson and Market properties in question. The designs for those projects included shared parking and an elevated courtyard connecting the two buildings. Those applications were denied by the Board of Zoning Appeals on the grounds that they technically functioned as a single facility.

During a Board of Zoning Appeals hearing on the project in November, board chairman Leonard Krawcheck said, "It's a very clever project that's put together. It's a 100-room hotel that's presented as two 50-room hotels. But it is 100 rooms. The impact is 100 rooms. The owners are saying there's some separation, but to me, its impact on the area and on the neighborhood is a 100-room impact."

In December, Rainbow Market Group submitted the plans for the current projects, which they say included revised traffic patterns and a full separation of the two properties. Those plans were approved by the Zoning Board in February.

According to court documents, the defendants claim that any invasion of the plaintiff's interests in the case is "speculative and conjectural" and that the "alleged injury is not particular to East Bay but common to the general public." As it relates to the claim that the two 50-room hotels essentially function as a single facility, Rainbow Market Group's brief in opposition to the appeal states that "the evidence shows that if one building were to fall down, the other building would remain standing." According to the developer's claim, the only shared element between the projects is the driveway for traffic circulation, which crosses the Anson Street and Market Street properties.

So, which one is it — two 50-room hotels that just happen to sit next to one another or an attempt to squeeze a 100-room hotel where it's not allowed? That's up to the court to decide, but as the city takes a closer look at how new accommodations shape Charleston's landscape, it seems it's become more and more difficult for property owners, developers, and city officials to see eye to eye. As of June, there are currently 4,930 hotel rooms existing or under construction in 45 individual properties on the peninsula with 10 new properties and an additional 731 rooms already approved by the Board of Zoning Appeals. Overall, the Planning Department estimates that 150 rooms will be added to the peninsula in 2016, and more than 1,100 room could be built between 2017-2019 based on projects that have received approval.

As is the case with the Anson and Market projects, all this added development is sure to draw its fair share of opposition, both legal and otherwise, from businesses and residents of the peninsula. The question city leaders will be asking is whether the concern over new hotels is an unwarranted prejudice or if Charleston really does need to pump the brakes before the city reaches a tipping point.

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