When Jaime Tenny pays the rent for COAST Brewing, she makes the check out to the state Division of Public Railways, which owns some of the land at the Navy Yard. She says a few businesses around her have been hit hard with rent increases in recent months, but her company is not among the ones affected.
"Luckily we're not, or we would be in serious trouble," she says.
North Charleston Mayor Keith Summey says the State of South Carolina has been raising rents around the Navy Yard, forcing some businesses to relocate during an ongoing feud between the city and the state over plans to increase railroad traffic in the area.
Summey says the state, which owns about 200 acres of the warehouse district, is working against the city's efforts to attract businesses.
"We were making it more of an incubator," Summey says. "They're not encouraging what we're trying to do out there."
One business owner (who asked for anonymity) knew a hike was probably coming but did not expect it to triple all at once. She had signed a low-rent, four-year lease with the Noisette Company, and her company spent $15,000 installing air conditioning, updating the plumbing, and rewiring the electrical system in a building that she says was nothing but a tin can when she arrived. The Division of Public Railways bought the site this year after Noisette gave it up to a realty company, and when the four-year lease ran out, the improved property was assessed at three times what the tenants were paying.
"We said, 'Can we do a graduated lease increase or something?' " she says. " 'We don't mind paying a little bit more, but we just can't be slammed with triple right now.' " The state denied her request, and she relocated — although she didn't move far. The company is now based in another building on the Navy Yard.
When asked for comment, Public Railways deferred to a Department of Commerce spokesperson, who said Public Railways was "making an effort to manage the property like a business and generate revenue from reasonable rents to clean up the property."
Last week, the City of North Charleston sued to keep the state from building a rail yard that violates a Memorandum of Understanding signed in 2002. In that memorandum, the state promised to move new train traffic only through the southern end of the Navy Yard, but a state Commerce Department plan would send increased rail traffic through the northern end of the old base. One particularly onerous rail crossing for some North Charleston residents would be across North Rhett Avenue, clogging traffic near a busy I-526 interchange and the Park Circle neighborhood.
On Friday, the S.C. Supreme Court denied a request by the state to expedite a ruling on the 2002 memorandum, a decision Summey calls "a big win for us." The state had asked the Supreme Court to rule on whether the memorandum, which was signed with the State Ports Authority, could be enforced on Public Railways.
Summey says he thinks the lawsuits will bring Gov. Nikki Haley and Commerce Secretary Bobby Hitt to the table soon to talk about rail plans.
"The governor seems to continually indicate that she is working on this thing, but I have never spoken with her about this," Summey says. The one discussion Summey says he has had with the governor was at a town hall-style meeting, where Summey waited in line with everyone else to speak as a private citizen. Summey has spoken with Hitt three times on the topic.
One of the lawsuits, which lists the Ports Authority, Public Railways, and the state of South Carolina as defendants, is ostensibly based on environmental concerns. The Army Corps of Engineers had previously analyzed the impact of new rails on the environment, but the suit says the plans have changed since then and the environmental impact statement needs to be re-examined. Dana Beach, director of the Coastal Conservation League, says that's only part of the issue.
"There's a case to be made that failing to resolve this dispute about rails will have negative environmental impacts," Beach says. A dearth of rail access to the Port of Charleston means more trucks carrying freight, which means more carbon emissions as well as heavier traffic on an already strained stretch of I-26. "The core of all this, in my opinion, is the state's unwillingness to step up and fund the infrastructure, wherever it is, to move containers from the new terminal."
Beach estimates it would take a half-million dollars to build the necessary rail overpasses to make everyone happy around the Navy Yard. But as state agencies and the City of North Charleston fire legal volleys at each other, the pools of money that could be spent on that project are getting diverted elsewhere. Beach points to two money-suckers in particular: the controversial I-526 extension and the construction of an unconnected cloverleaf interchange near the Grand Strand for an as-yet-to-be-built stretch of I-73. The rail spat in North Charleston, he says, is only a symptom of a decade of mismanagement at the state level.
"That's what happens when the state screws up its transportation funding program," Beach says. "People end up suing each other."
Summey says the city will file an injunction to stop the state's rail plans "the day they try to move any dirt."