New investment building coming to Hilton Head. What we know about the $1M project
A new “spec building” is planned for Hilton Head Island.
If you’re not an investor, a speculative building is a pre-constructed building that goes straight to the market so companies can move in.
The new building was discussed on Tuesday at the Town of Hilton Head Island finance and administrative committee meeting, when executive director of the Beaufort County Economic Development Corporation John O’Toole came to the meeting to present on opportunity zones for private investors on Hilton Head.
“Hilton Head is getting a spec building?!” Chairman of the committee Tom Lennox asked in disbelief.
Since the speculative building is being privately-funded, the Hilton Head Town Council doesn’t need to approve it.
The building will be around 12,500 square feet, and will be built on Blue Jay Way on the island’s north end. The approximate private investment in the project is $1 million, O’Toole said.
“If you’re picking up your bags at the airport and you look (north) through the trees, that’s where it’s going to be,” O’Toole said.
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Speculative building solves the problem of having to purchase land and construct a site before starting a business, but brings the uncertainty of how long a building without a planned tenant will be on the market, O’Toole explained.
The project is being spearheaded by Hilton Head-based Steve Dill construction, O’Toole said. Dill will move into part of the new warehouse and lease the other parts to other businesses.
The new warehouse sits in the “opportunity zone” — a district based on lower income census tracts where investors can get tax breaks if they buy into projects there.
“I’m glad to see it,” Town Council and finance committee member Bill Harkins said Wednesday of the new building. “It could be encouraging smart growth and opportunities for new jobs.”
Pros and cons of speculative building
The speculative building industry is beneficial to companies because permitting, utility lines and planned road access are all complete, according to an article about speculative building written by The Austin Company — and design and building firm based in the U.S. and Mexico.
This makes speculative building “a cheaper and quicker alternative, with reduced site work and construction costs.”
However, “spec buildings constructed with no owner in mind are built using educated guesses on a one-size-fits-all building size, location on the selected site, and virtually no guidance on layout, materials and specifications,” the article says.
Beaufort County is home to many speculative buildings, according to a listing on the Southern Carolina Regional Development Alliance website.
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Businesses moving nearby
This type of building is being built as town leaders look to use empty commercial space for new purposes such as workforce housing and new retail.
“Around 35 percent of commercial space on the island is vacant,” Harkins said. “That’s low-hanging fruit for economic development.”
In the area around the new building, there are lots of changes underway.
The speculative building will be about a mile north from the Triangle Square strip mall, which is being relocated by the Public Storage to build more storage units.
It’s also less than a mile south from St. James Baptist Church and Old Cherry Hill School, which are being moved by the town to accommodate the Hilton Head Island Airport’s “object-free zone” for the newly-extended runway.
The property on Blue Jay Way does not sit in the object-free zone, according to the airport master plan.
