Special Reports

Homeless drifters, rotting buildings: How do we fix Hilton Head’s abandoned properties?

From abandoned condos to a vacant hotel, here are 3 of Hilton Head’s biggest eyesores

Hilton Head Island has a number of vacant buildings that have turned into eyesores over the years. Here are three of the most well-known on the island, including the former Beachwalk Hotel.
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Hilton Head Island has a number of vacant buildings that have turned into eyesores over the years. Here are three of the most well-known on the island, including the former Beachwalk Hotel.

A homeless man is curled up in his yellow sleeping bag at the old Beachwalk Hotel, a deserted Hilton Head Island property.

Its windows are boarded up. The pool is empty. No one is supposed to be there. But Corey Cook didn’t have a home, and he was desperate for a place to sleep.

One block away on Pope Avenue, it’s a different world. Happy vacationers bike to Coligny Beach, the island’s top tourist spot. Other visitors are dropping $300-plus for rooms at a beachside resort. Swaying palmetto trees and million-dollar homes make an impressive backdrop for their vacation photos.

Beachwalk Hotel is one of at least a dozen commercial buildings that are vacant eyesores, say Hilton Head residents. These unkempt buildings not only offer a startling contrast to the scenic tourist destinations, they also damage nearby property values and cast a shadow on the resort island’s reputation.

“Why isn’t Hilton Head Island taking these property owners to task?” said Hilton Head resident Regina Kirshbaum, who is bothered by unsightly properties off U.S. 278 and Marshland Road.

Despite complaints from residents and business owners about the decay, town officials have no property maintenance ordinance requiring owners to fix up dilapidated buildings if those buildings are not considered unsafe.

“If it’s unattractive, there’s not anything we can do about it,” said Charles Cousins, the town’s director of community development. “The neighbors think it’s rundown. The grass isn’t cut. We can’t really do anything about that.”

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And the problem is likely to get worse as an unknown number of office buildings — no longer needed and sitting vacant — fall into disrepair.

They’ll join a group of eyesore properties that span the island, including the burned-out Fairfield Square, one of visitors’ first sights as they enter the town on U.S. 278, and an empty multistory office building near Sea Pines’ front gate on the south end.

Four properties are particularly troubling to residents.

Former hotel went to ‘hell in a handcart’

Originally built in 1989 as a Holiday Inn Express, the Beachwalk Hotel has sat vacant for the past decade.

Out of place on the island paradise, it’s occasionally a sleeping spot for those who are down on their luck.

It isn’t difficult to get onto the property — Cook said he just dipped under the chain rope surrounding the hotel with its “no trespassing” signs and set up camp with a small pack of his belongings.

He had previously worked nearby on construction jobs and hadn’t seen police surveillance on the premises. So he took a chance.

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Town leaders say they’ve attempted to address community concerns at the property, which was turned into a condominium site in 2006.

Pictured from a five-story stairwell, the Beachwalk Hotel, as seen on Feb. 27, 2018, is an abandoned structure on Hilton Head Island. Drew Martin dmartin@islandpacket.com

Triton 321 LLC, the Atlanta-based developer that bought the hotel in December 2005, sold the condo units in 2006 and 2007, just before the economy tanked during the financial crisis in 2008 — “and then it all went to hell in a handcart,” said Chester Williams, an attorney who represents Beachwalk Hotel and Condominiums Association, Inc., which now owns most of the condos.

Several of the condo owners stopped paying their mortgages and were forced into foreclosure. Over the past decade, Williams’ client has gradually bought the majority of the 44 units.

In 2014, the town required the majority owner to rope off the property, cover up the pool, and tear down the stairs to prevent entry to the upper floors and board up units’ doors.

But because the majority owner didn’t own all of the units — and therefore didn’t own all of the property’s shared elements, like the roof and land — it couldn’t make any substantive changes beyond that.

The majority owner is still trying to buy the remaining units from the other owners, according to Williams. But that’s not been an easy task, as some of owners have thus far chosen not to sell. Williams declined to say why, and none of the property owners contacted by the Island Packet responded to requests for comment.

Although the property is much safer than it has been in the past, it continues to deteriorate, said Cousins, the town’s director of community development.

“Now we’re finding that there are holes in the roof, causing more damage,” Cousins said. “Hopefully, sometime in the near future, we’re going to go back to (the owner) and say, ‘Okay, it’s been this long. Where are you on acquiring those units?’”

In the meantime, it’s providing occasional shelter for the island’s poorest.

While Cook, 37, sometimes works construction on the island, he can’t afford its high rental rates.

After his sister was murdered seven years ago, he sought comfort in bad habits, including drinking alcohol.

“Over the last few years, I just lost my swag,” Cook said.

Usually he stays with his friends, Cook explained. It just didn’t work out this particular week.

Both Cousins and Williams said vagrants do occasionally find their way to the hotel. But every time the town has notified the hotel’s majority owner of trespassers, the owner responded immediately, Williams said.

Unfinished condo ‘reflects poorly’ on Hilton Head

Closer to the middle of the island, a four-story structure is covered with vines. It’s not a finished building — it looks like something out of a dystopian film. And it’s stayed that way for years.

Nearly 15 years ago, original developer Willis Baird planned to build six identical condominium buildings. Baird completed one building of his Edgewater on Broad River Creek development before going bankrupt; the second condo building stood half-finished, a skeletal shadow of the first.

The structure has hurt the value of the condo units in the first building.

Selling is now a difficult task. Eleven listings have expired in the past decade, according to brokerage listings.

Here’s a 360 view of one of the largest ‘abandoned’ structures on Hilton Head Island

“If it was somewhere else (where it was more visible), it would cause a lot more concern. But now there are 23 people who are bearing the burden,” said Bill Eisenman, president of the Edgewater Homeowners’ Association.

Why has the building remained unfinished for over a decade?

At the core of the issue is a legal dispute about property rights.

On one side: The Edgewater Homeowners’ Association, composed of the residents who own condo units in the finished Edgewater building. The HOA also owns about seven acres of land.

On the other side: Ephesian Ventures, LLC, a Nevada-based company that bought the adjacent 16 acres in 2007 from the bankruptcy trustee for the original developer after it folded.

The two sides have been in a legal dispute about their respective property rights since the Edgewater HOA filed lawsuit against Ephesian in 2011.

When Ephesian bought the property in 2007, it acquired the rights to the building permit. But the building permit finally expired last year, and nothing has happened to that structure more than a decade later.

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Williams, who is also the attorney for Ephesian, said the building has sat uncompleted for years in part because the HOA and Ephesian have not reached a settlement.

The building itself is not unsafe, according to two engineering reports commissioned by Ephesian. Because of this, Cousins said, the town cannot force Ephesian to demolish the structure.

But it’s an obvious eyesore that even Hilton Head Mayor David Bennett wants addressed.

“You have, essentially, an unfinished, roughly three-story concrete structure ... To me, that reflects poorly on our entire island,” Bennett said. “It certainly undermines the quality of life and real estate value of the building next to that structure. And I think that needs to be dealt with.”

The HOA sent a letter to the town in January, asking town council to address the issue structure. Council will do so later this month, Bennett said.

Although he did not give details, Bennett said he’d like to see the town consider a property maintenance ordinance.

The failed construction project at the private and gated community at The Residences at Edgewater on Hilton Head Island as seen on March 7, 2018, is one of the structures on the Town of Hilton Head Island's abandoned structures list. Drew Martin dmartin@islandpacket.com

An empty welcome to the island

As visitors drive onto the island, one of the first things they see is a group of empty yellow buildings on the right.

Fairfield Square, which sits at 160 William Parkway just off U.S. 278, was once home to three businesses: Versatile Cafe & Restaurant, Tienda La Guadalupana grocery store and a former Hilton Head visitor center.

Now, only the Curbside food truck sits on the property during the lunch hours, serving Mexican food.

“In all likelihood, it’ll be a tear-down,” said David Bachelder, the listing agent for the buildings.

Small, yellow outbuildings at 160 William Hilton Parkway sit abandoned along U.S. 278 as seen on April 2 visible to drivers as they come and go on Hilton Head Island. Drew Martin dmartin@islandpacket.com

The buildings have been vacant for more than four years, and their structure has already indicated signs of faultiness.

In 2014, when the buildings were already vacant, a fire broke out.

“It appeared as though people had entered the structure at some point to strip wires and look for other items to steal,” the Island Packet reported at the time.

But the location makes Fairfield Square prime property.

“It’s a fairly decent sized parcel coming on the island,” Bachelder said. “We’ve had interest from hotels and other businesses,” although he declined to give details about plans for the property.

Keeping competition out of the old Sam’s Club

When Sam’s Club moved its location to Bluffton in 2017, a big empty box store was left behind on Mathews Road off of U.S. 278 — to the dismay of many island residents.

In front of the old Sam’s Club, as island residents call it, a large parking lot is almost empty. Inside the approximately 70,000-square foot building, there are no shelves, no cash registers, no merchandise, no shoppers.

It’s not that other businesses don’t want to rent the space.

“It’s the only big box on Hilton Head available,” said Jim Bradshaw, who runs The Bradshaw Group, Limited, a commercial real estate development company. Indeed, although Bradshaw is not the real estate agent for the property, he is familiar enough with island real estate to say with confidence, “Somebody will buy it.”

The store front that used to house Hilton Head Island’s Sam’s Club as seen on April 2, 2018 now sits vacant at 95 Mathews Road. Drew Martin dmartin@islandpacket.com

So why hasn’t it happened yet?

In real estate, it’s not uncommon for big corporations to hold on to a lease until it ends, even if the corporation has moved out. It’s cheaper to pay rent than to deal with a competitor — that, at any rate, is likely the rationale behind Sam’s Club’s choice to keep the unit empty, Bradshaw said.

Sam’s Club’s lease ran out in February, opening up the option for another big box store to take its place. The space is both available for lease and for sale.

Paul Ansell, the broker in charge of selling the space, said an interested buyer is currently working on a contract. But Ansell did not reveal any details about the buyer or the price.

Town can’t force owners to improve properties

Town leaders have previously attempted to tackle the island’s eyesores.

In 2010, Town Council asked Hilton Head’s community development department to develop a property maintenance code that would require property owners to maintain their buildings and land — “paint the walls, cut the grass, those kind of things,” Cousins said.

But it failed to pass.

Introduced shortly after the 2008 recession hit, some council members worried that many owners lacked the money to maintain their properties.

Now that the economy has improved, Bennett said he would be open to considering such an ordinance if it came up in Town Council. Councilman Thomas Lennox, who represents the south end of the island, said he also would be open to taking a closer look at a new ordinance.

“I can’t say yes or no yet — but I think looking at the Beaufort County ordinance could be a good starting point,” Lennox said.

County code allows the county to tear down a dilapidated structure and then bill the owner for the work done.

It’s likely to be a controversial change, forcing low-income residents to maintain a level of upkeep they might not be able to afford.

“What someone views as their home may be viewed by others as a problem building,” said Councilman Bill Harkins, who represents the island’s north end.

Harkins said he would consider a property maintenance ordinance, although he noted that income disparities could “make the situation very difficult.”

Another piece of the problem: Hilton Head rarely condemns buildings, allowing deteriorating properties to affect nearby property values.

Only a few buildings have been condemned by the town since building official Chris Yates began working for the town in 2010.

The town always gives owners a chance to repair the building themselves, Yates added.

“You could have a situation where it’s heirs property with multiple owners,” Yates said, referring to properties that are typically owned by the descendents of slaves and have been passed down through families for generations.

“Or you could have a situation where the house was built years ago and their grandparents were born in that house, so there’s sentimental value there. So you want to give them the opportunity to make any kind of necessary repairs or, if we can, secure it.”

In some cases, if the town has notified the owners of necessary repairs but the owners have not followed through with fixing them, the town “may step in and make it safe,” Cousins said. He added that, under those circumstances, the town may place a lien on the property to cover the cost of the town’s work.

If the building is considered unsafe after inspection and the owners fail to fix it up, Yates and the property owner must argue each of their cases to the town’s Construction Board of Appeals. And if the board sides with Yates, the owner has 30 days to file an appeal with the circuit court. It’s a lengthy process, and one that seldom ends in building condemnation.

A solution for the affordable housing problem?

Several indicators suggest the number of island eyesores may increase.

First, a growing number of businesses are moving to Bluffton, particularly in the past 15 years as the mainland neighbor’s population has exploded. That has chilled the demand for commercial real estate on the island.

Additionally, many Hilton Head buildings were constructed for offices, which are increasingly becoming obsolete thanks to technology that allows people to work anywhere.

“Your office is your phone,” Bradshaw said. “Amazon is changing things for retail as we know it. Everything is in transition with this information age.”

An abandoned office building located at 120 Office Way on Hilton Head Island. Drew Martin dmartin@islandpacket.com

Even so, Hilton Head real estate agents are undeterred in their optimism.

Bachelder, who has been selling island real estate since the 1960s — not long after the bridge connecting to the mainland was built — said Hilton Head has no excessive surplus of commercial property.

“We’ve maintained an effort to not overbuild the island, and most residents are very proud of it,” Bachelder said.

“Where Hilton Head is today, in my opinion, is a very mature town, practically built-out and in excellent condition,” Bachelder said “It’s got vacancies, it will always have vacancies. There’s always a vacancy in the most healthy business arena.”

Bradshaw is convinced that the commercial buildings that now sit vacant — including an office building he owns behind the “Barmuda Triangle” near Sea Pines — will be put to better use, although he declined to give specifics.

For his part, Bennett is mulling the idea of turning some vacant buildings into affordable housing. The current shortage is fueling a dearth of hospitality workers and jeopardizing the town’s tourism economy.

The town has already compiled a list of commercial buildings with vacant units in an attempt to identify potential sites.

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“In an ideal world, the town would be able to assemble incentives and tools that would allow the private sector to respond to that demand for affordable housing,” Bennett said. “It may need to be an occasion where the town might need to take a slightly more proactive role, where the town acquires the parcel and zones it in such a way that would enable the development of the housing.”

All parties are hopeful that the town will make smart decisions when it comes to the vacant commercial buildings that dot the island — some more visible than others, but most frustrating to people nearby.

“The town of Hilton Head has very tight control on development,” Bachelder said. “Always has had it. And we’re all the beneficiaries of it.”

The Gallery of Shops as seen on Monday, Oct. 26, 2015 on Hilton Head Island. File Staff photo

Top 10 Island Eyesores

We asked readers to list the top unsightly island properties. Properties with ** are also considered unsafe by the town of Hilton Head, according to Charles Cousins, Hilton Head’s director of community development.

  1. Edgewater building, 10 Verbena Lane

  2. Beachwalk Hotel, 40 Waterside Drive

  3. Abandoned Sam’s Club, 95 Mathews Road

  4. **White building on U.S. 278 as you drive onto the island, 148 William Hilton Parkway

  5. Yellow buildings on U.S. 278 as you drive onto the island, 160 William Hilton Parkway

  6. Old Grayco buidling, 1014 William Hilton Parkway

  7. Empty commercial building at the corner of Highway 278 and Arrow Road before the Sea Pines Circle, 153 Arrow Road

  8. Gallery of Shops near Sea Pines’ front gate, 14 Greenwood Drive

  9. **Empty office building near the Barmuda Triangle before Sea Pines’ front gate, 12 Office Way

  10. Empty office building, 59 New Orleans Road

This site that used to house Grayco Inc. Building Center remains boarded up and vacant as sen on April 2 is located at 1014 William Hilton Parkway on Hilton Head Island. Drew Martin dmartin@islandpacket.com