Traffic circle the beginning of a major overhaul for Dunnagans Alley, Arrow Road

The Town of Hilton Head Island wants to start building a south-island traffic circle a year earlier than planned, with construction of the roundabout at Arrow Road and Dunnagans Alley to begin in fall 2010.

The circle is expected to improve one of Hilton Head's more dangerous intersections. But equally as important, town officials also hope the public investment will trigger nearby property owners to redevelop so the aging area of town can become more than just a shortcut around the Sea Pines Circle.

Town leaders would like to see many of the existing buildings demolished so a new neighborhood -- a pedestrian-friendly district of shops, restaurants and villas -- can take root.

"The whole area is a challenge," said Councilman George Williams. "There's no doubt about that."

"It's going to take somebody with a lot of money and a large vision," he continued.

In recent years, the town has bought property on two of the intersection's four corners: Dunnagan's Alley Theatre and the former Rock's/Remy's site. The other corners are occupied by Espy Lumber and a consignment shop, both of which will remain when the circle is built.

Town Council also created a special zoning district for the area that doesn't require property owners to fully comply with parking requirements if they rebuild, something that would be difficult to do in the tightly packed corridor. Instead, the businesses could use a public lot planned once the theater is demolished.

The zoning district also allows apartments to be built atop businesses, a mixed-use component that historically hasn't been allowed in many places on the island.

The traffic circle is the first in a series of public projects meant to nudge the revitalization effort along. Eventually, the town plans to build a park on the Rock's/Remy's tract -- tentatively scheduled for 2012 -- and a second traffic circle at the intersection of Arrow and Target roads.

"Hopefully the private community will see some opportunities here and start rethinking how to work their properties," Williams said.

Construction of the first roundabout at Dunnagans Alley is expected to cost about $750,000 and should take about three months to complete. It will be roughly the size of the circle outside Wexford and be able to accommodate large vehicles like tractor-trailers, fire engines and RVs towing cars, said town engineer Jeff Buckalew.

"A roundabout's inherently more safe than the intersection that's currently out there," he said.

Al Vadnais, chairman of the town's Planning Commission, agreed that the current intersection is nerve-wracking.

"I drive that road just about every day ,and in my experience, it's the most dangerous intersection on the island," he said, noting how difficult it is to see traffic coming down Arrow Road. "If you pull out, you're proceeding at your own risk."