Home News Charleston’s surging real estate values helped sweep Carnival out to sea | Business

Charleston’s surging real estate values helped sweep Carnival out to sea | Business

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Rising tides lift all boats and go to old economic sayings.

You can also cast them offshore.

Carnival Cruise Line noticed that it was involved in such a sea change last week when the State Port Authority announced that it would not renew its contract with the company when it expired in late 2024.

“We have a very good relationship with Carnival. We have respected them and have worked with them for their benefit and for our benefit,” said SPA Chief Executive Officer. Jim Newsam said on Wednesday. “But this decision became more and more clear over time and ultimately became the best business decision for the port.”

Not so long ago, the operator of the locally-based 3,001-seater Carnival Sunshine sought to secure a 20-year agreement to stay moored at Union Pier Terminal in downtown Charleston. There is none. The charm of the historic district.

“In my understanding, they love this market, they are very successful in this market, and Sunshine is a big hit for them,” Newsom said in early 2020.

The ink was never written on paper due to a long-term contract.

Meanwhile, the value of real estate in downtown Charleston continued to rise to attractive levels, and Newsom said that Union Pier’s equation “probably changed the calculation.”

“We have always considered it the final trade-off between maritime and non-maritime businesses, and that trade-off has really shifted … in the last few years,” he said.

Fit and start

SCPA (copy)

Jim Newsom will retire next month as Chief Executive Officer of the State Port Authority.File / Provided

SPA acquired ownership of Union Pier from the city after lawmakers set up an agency 80 years ago. According to local news archives, industrial property has handled passengers and all types of ocean freight, from cotton to bananas to lumber, since at least the 1830s.

Known as Union Wharf at the time, it was once one of several steamship destinations on the eastern side of the peninsula, from Trad to Columbus Street.

Charleston Port Authority begins sales process for major waterfront sites

The city purchased a series of maritime facilities in 1921 for about $ 1.5 million.

Union Wharf, with its wooden hut and eerie dock, didn’t get much attention a century ago. It was in “a devastated state unsuitable for commercial use,” the chairman of the city’s Port Public Utility Commission said in a 1930 report to elected officials.

By that time, the bones of modern Union Pier were already in place. In the mid-1920s, the city invested more than $ 300,000 in a new stake-backed rail service port terminal at the foot of Market Street. It measures 630 feet x 415 feet and was equipped with two warehouses.

According to a 1926 news article, “10 years ago, Charleston didn’t have a modern waterfront facility like the new Union Pier … it was meant to handle foreign commerce.”

One of the site’s first redevelopment proposals in the early 1980s when the revitalizing Mayor Joe Riley announced plans for a multipurpose “festival marketplace” to be built on part of a 63-acre port terminal. One has surfaced. The idea was abandoned about two years later.

In the mid-1990s, SPA began exploring increasingly outdated but valuable waterfront real estate options. The effort has reached the shelf.

Shortly after Newsome took office as CEO in 2009, the SPA and the city announced an update to their previous Union Pier overhaul plan. One idea was to move the cruise business from the passenger terminal in the 1970s to the northern end of the accommodation. This decision infuriated neighbors, conservationists and conservationists who wanted a tour boat expelled from the historic center. Subsequent legal debates have confused the future of Union Pier for more than a decade.

Opposition groups didn’t take the winning lap last week, saying they were waiting for details in a joint statement when they learned that carnival days were being counted.

Pier pressure

Carnival Cruise Line departs Charleston in late 2012 and Union Pier redoes

When SPA decided to move its office from an adjacent property on Concord Street to Mount Pleasant, it began to move away from Union Pier, at least physically and geographically. In 2017, we sold our downtown headquarters to Rowe, a real estate investment company looking to build a 255-room luxury hotel on the premises.

Port authorities took the relationship one step further in 2019. It hired Rowe to devise a new reuse plan for 25 acres of Union Pier’s developable land, including ensuring all zoning approvals. The consulting deal has brought back Jacob Lindsey, a former Charleston planner who joined a Los Angeles-based company about 13 months after leaving Los Angeles for a new job in Colorado, Newsam said. Stated.

“They are doing the gist of the plan, and that plan actually … needs to take the steps necessary to get this property … there is a master plan that can be approved, … Developers can buy and run properties and what they are most interested in in the property. “

Lowe has already stated that he intends to be one of UnionPier’s bidders when SPA begins looking for offers.

New math, dominated by the proliferation of downtown real estate, did not affect the carnival, which launched a five-day annual cruise from Charleston to the Bahamas more than a decade ago. According to Newsam, one issue was the parking requirements for private vessels, which generate a small portion of the SPA’s revenue pie.

Vessels on Miami-based routes will be able to partner with Union Pier after 2024. This is because the existing passenger terminal remains in the hands of the SPA to accommodate short-term “port of call” visits.

A carnival spokesman said last week, “We will work with port authorities to explore future opportunities for Charleston.”

Newsom's decade as SC Port CEO has revived Charleston's maritime industry

The port’s decision to withdraw from the cruise ship business for the full year is one of Newsome’s last major strategic moves, which will retire on June 30 after nearly 13 years of command. He said UnionPia’s long and elusive sale and redevelopment would bring valuable government-owned property back to the tax office and give citizens more access to the city’s waterfront.

Part of the proceeds will help SPA build a new container terminal in North Charleston and repay the $ 1.5 billion debt it has incurred to make other high-value investments to stay in the top 10 ports in the United States. There is a possibility.

Newsom refused to speculate on how much UnionPia would get after it hit the market, but he said, “I have an idea.”

“It’s no exaggeration to say that this is a transformative amount …. Because we are a capital-intensive business, we get the right profits from what we consider to be the most valuable assets on the East Coast of the United States. It’s really good for our core business of growing the container and freight businesses and bringing economic benefits to South Carolina and the region. “

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