As Charleston booms, city’s Upper Peninsula emerges as development hotspot

One of the country’s cultural and culinary capitals, Charleston, South Carolina, has a particular reputation for those who didn’t grow up within the city or in the nearby coastal area of the Southeast known as the Lowcountry.

“People’s impression is that it’s all buttoned-down shirts and bow ties,” says Stephen Zoukis, a co-founder of the local development firm Raven Cliff Co. A mecca of Southern food, narrow streets, and historic buildings, the city and its charming downtown have recently been booming.

A centerpiece of the state’s hot tourist economy, which made $20 billion in 2015 and has posted five straight years of growth, Charleston’s recent success has arguably become a bit of a problem.

Tourist traffic has led to congestion, and locals are feeling pushed out. Property values in the traditional downtown have skyrocketed. Median home prices in the region have increased from $190,000 in 2012 to $240,000 at the end of 2016, a sharp jump for locals, but still cheap enough on a nationwide level to attract new residents from more expensive cities. The city’s senior planner, Katie McKain, says the city expects to double its population in 20 years.

Raven Cliff Co.

Zoukis and many others believe that development in an area known as the Upper Peninsula—a former industrial strip just north of the city’s traditional downtown—will create new staging points for business development and become the catalyst the growing city needs.

New hubs for startups, such as the Harbor Entrepreneur Center, have given the city’s nascent tech scene the nickname Silicon Harbor. Zoukis’s firm recently completed Pacific Box & Crate Company, a newly opened, 130,000-square-foot development that includes tech offices and Workshop, a food court and restaurant incubator seeking to become a proving ground for the city’s next culinary stars, a follow-up of sorts to their Half Mile North project, another tech-heavy development.

And this week, the city council is expected to continue debating the creation of the Lowcountry Lowline, a 1.6-mile rail-to-trails project that will create a backbone of public parkland through the Upper Peninsula. “The days of the old downtown are numbered,” Zoukis says.

But the changes that are reshaping the Upper Peninsula have brought the kinds of big-city problems not immediately associated with a tourist town. The signs of urban renewal and gentrification are already here: An industrial stretch north of downtown, known for car dealerships and warehouses, has historically been bordered by African-American neighborhoods. Lately, these neighborhoods have wrestled with displacement and rising rents.

As residents stream in and rents increase, many of the city’s historic African-American churches, long seen as icons of the city, have had to consider leaving the area. Advocates in a heritage-obsessed city worry that some of the city’s character may be fading in this era of extreme growth.

“We ain’t seen nothing yet,” said Winslow Hastie, chief preservation officer of the Historic Charleston Foundation, during a presentation about growth in the city’s historic district. “We’re barely seeing the tip of the iceberg in terms of density and development. The future is happening, and it’s happening fairly rapidly, and we have to get this figured out sooner rather than later.”

Ginny Deerin, a former mayoral candidate and now director of the Friends of the Lowcountry Lowline, has seen the neighborhood shift dramatically, especially as the historic Lower Peninsula becomes increasingly expensive.

Friends of the Lowcountry Lowline

“There is a tremendous amount of change happening here,” she says. “About 15 years ago, people would say this is a neighborhood of ‘newlyweds and nearly dead.’ In the last five to 10 years, the issue of gentrification has really been right in your face.”

A former fertilizer warehouse turned tech and culinary hub, Pacific Box & Crate embodies changes happening in the neighborhood. Developed by Zoukis’s firm, the three-building project is anchored by tech offices, such as real estate software company BoomTown; the Harbor Entrepreneur Center, a startup business accelerator; and Workshop, a restaurant hub run by chef Michael Shemtov. The “fancy food court” provides new businesses with kitchen space, a built-in customer base, and support to help them grow.

Shemtov, whose Butcher & Bee restaurant, which opened in 2011 in the Upper Peninsula, helped popularize the neighborhood, says that as Charleston has become more and more popular for visitors—which has been great for servers, bartenders, and the culinary scene—businesses need a place to expand. The quaint, small-town spirit of Charleston past has made way for a growing population of entrepreneurs who need space beyond the tourist traffic and new downtown hotels.

Charleston’s charms have turned a lot of former visitors into full-time residents, and Shemtov says they brought networks of investors and entrepreneurs from other cities looking for the kind of lifestyle the city can offer.

Zoukis sees these kinds of developments as a prelude to something bigger. The food and tech hubs, he hopes, will eventually bring more commercial development to the neighborhood, which he expects will be followed by multifamily developments.

“We put the food and restaurants in so they aren’t just moving to an office park,” he says. “We want to give people something special, something you don’t normally get. I always think along the Chelsea Market model of development.”

That kind of dynamism is what most cities look for. But Deerin says population growth, and the impact of new arrivals on the city’s housing market, have been a problem. The gentrification of the peninsula is at the top of people’s minds, she says, and was a big issue in the last mayoral election.

“Protecting the quality of life is a big issue here,” she says. “The economy is booming, things are getting really vibrant, great restaurants, wonderful things are happening. But the people who live here don’t like it that much. They’re sick of big developments and more hotels, and are getting active and pushing back.”