Chimney Cove evicts low-income residents to house seasonal resort workers

After its first major update in about 40 years, a mid-island Hilton Head Island neighborhood is now home to seasonal workers from some of the island’s largest resorts.

But where the sale of Chimney Cove in December eased a shortage of lodging for resort workers, it also shrunk the already-limited housing options for the island’s poor. Before renovating the 52-unit community, which is made up of modular homes, the new owners forced out about 40 low-income Hispanic families, some of whom had been living in the neighborhood for decades, says Don Cadman, who previously managed the property for about 10 years.

When the new owners, cousins Sam Johal and Hari Johl, asked Cadman to evict the residents, he told them, “No thanks.”

“I said, ‘Are you kidding me?’ I knew these people for 10 or 12 years,” Cadman said. “And I handed (the new owners) the keys.”

Johal, who co-owns Hilton Head’s Best Western Ocean Breeze Inn on Lemoyne Avenue and the old Metropolitan Hotel on South Forest Beach Drive with his cousin, said Monday he didn’t want to displace low-income families. However, he said it took “an extensive amount of capital” to do the needed renovations on the units, some of which he completely gutted due to leaky roofs, water damage and age.

Some of the modular homes, installed in 1973 as housing for Palmetto Dunes workers, had not even been rented out in recent years due to their poor condition, according to former owner Kim Davis, a Realtor with Dunes Real Estate.

Johal added that he gave residents ample warning that they would be evicted and that he allowed some of them to move out as late as this month. Residents knew for several months prior to the sale of the property that they’d be evicted when the sale was final, which was in December, he said.

Most former residents have since moved to other low-income communities in Bluffton and Hilton Head, though two families are living at a local economy hotel because they haven’t found new, affordable homes, says Cadman and Besty Doughtie, director of The Deep Well Project on Hilton Head.

Doughtie acknowledged the property was in bad shape but said she’s concerned about the trend of a lack of affordable housing on the island.

“They are old, but again, it’s a roof over people’s heads, and it houses the people that do much of the low-paying work on Hilton Head,” Doughtie said. “What we have found is with the economy improving in the last 18 months or so, rents are going up in the less expensive places.”

“I don’t know where workers are going,” she added.

This season, from March to November, all of the residents are Jamaican H-2B visa holders — workers granted temporary visas for non-agricultural work like hospitality and food and beverage, according to Johal.

While he and Johl have long-term plans to redevelop the $3 million property, they decided in the short term to pursue seasonal housing because they had seen first-hand how resorts struggled with the dearth.

Upon buying the Metropolitan Hotel, they found that a few of their customers were seasonal workers with nowhere else to stay. The demolition of Hilton Head Suites on Marine Side Drive last year eliminated more seasonal housing.

“There was definitely a need on the island, and we found this opportunity, and we’re trying to alleviate a shortage,” Johal said. “Without these workers, it’s pretty difficult for the hotels to function.”

Warren Woodard, marketing and sales director for Omni Hilton Head Oceanfront Resort, echoed Johal, adding that H-2B visa holders — temporary nonagricultural workers — now make up about 40 percent of the resort’s 200 employees in peak season. Along with Omni, Chimney Cove now caters to Sea Pines Resort, The Westin Hilton Head Island Resort and Spa, Sonesta Resort and others, Johal said.

“We’re securing spaces wherever we’re able to to really provide appropriate housing for them,” Woodard said.

Chimney Cove now fits the bill, after heavy remodeling that includes new carpets and flooring, upgraded bathrooms and quality furnishings. Rent also includes basic utilities, said Johal, though he declined to say what residents are paying.

“It’s not rented out how it was previously,” he said. “It’s a superior accommodation.”

On Monday, renovations were ongoing in the mid-island community, which was dotted with dumpsters, piles of insulation and dry wall, and Hargray trucks bringing service to the finished units. Several residents who work at Omni have been coming to the island for years.

Still, Cadman said he’s saddened the sale of Chimney Cove cost other long-term islanders their homes.

Davis, who owned the property since about 2000, said he decided to sell because his partner was getting older and wanted out of the business. He and Cadman said they had no problems with late rent payments, the reason another island property owner gave for evicting 20 percent of his tenants from the low-income housing complex 90 Dillon Road in October.

Off the island, many low-income residents have also moved out of the Bluffton House affordable housing complex after it began converting units into luxury apartments and said it would raise rents for those who renewed leases.

Chimney Cove did not offer subsidized housing, but Davis said he rented three-bedroom units for about $800, far below market value. The prices allowed people to save up and buy land of their own and put their children through college in Mexico City and in the U.S., Cadman said.

It was a safe, friendly community, Cadman said, where the front office offered parents informal English lessons and help filing taxes and managers had a years-long waiting list for new residents.

“An awful lot of people started out there at Chimney Cove,” he said. “It’s been a good story for a lot of them.”

This story was originally published March 29, 2016 at 1:59 PM with the headline "Chimney Cove evicts low-income residents to house seasonal resort workers."