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The
Development Agreement (DA) is one of the top three concerns of
Kiawah property owners based on results from the just completed
KPOG survey and discussions during the 2004 campaign for Mayor
and Town Council. The Developer (KRA) recently requested an
extension of the 1994 DA which expires January 1, 2008. Its
contents apply to the entire Island, both inside and outside the
Main Gate, and along the Kiawah Island Parkway to Betsy Kerrison
Parkway.
KPOG believes it’s important that property owners have unbiased
facts available to them so they may voice educated opinions
during the discussions between the Town and KRA. This article
provides some critical background information on the existing
Development Agreement.
Town Notes for June 10, 1994 and September 27, 1994, quoted
liberally in this article, provided property owners with a great
deal of information about the Development Agreement, the
Comprehensive Plan, and the Zoning Ordinances approved that
Fall. They are available in their entirety at
www.kiawah.org. Clarifying comments are presented in
brackets ([]). The September 1994 issue “strongly encourage(d)
every property owner to read and become familiar with all three
documents, particularly if Kiawah is important in your personal
future.” That advice remains sound today.
What is a Development Agreement? “A development agreement
is a contract between a developer and a municipality. It is the
vehicle that allows the municipality to provide certain
assurances and incentives to a developer and in return receive
benefits for the community as a part of the development
process.” It assures a developer (in this case, KRA) that
zoning regulations will remain unchanged throughout the duration
of a large project, and minimizes uncertainty for financial
backers who may be underwriting portions of the project.
The Town/KRA’s Development Agreement. The 1994 DA is a 12.4
pound, four inch thick, 300+ page legal contract between the
Town of Kiawah and the Island’s developer. This agreement, plus
the Town’s Comprehensive Plan, and Land Use Planning and Zoning
Ordinances (Article 12), all approved in1994, control all
development on Kiawah. These documents replaced the original
Planned Development District Plan (PDD–1a) executed in 1975
between the Kuwait Investment Corp. (that owned Kiawah from
1974-1988) and Charleston County. That plan was subsequently
adopted by the Town as its Planning and Zoning Ordinance shortly
after Kiawah Island became a municipality in 1988.
The
DA was negotiated over a 16-month period and executed on
September 16, 1994. It conferred certain rights and obligations
to both signatories, and imposed restrictions on the Community
Association which is not a party to this agreement. In simplest
terms, KICA must abide by all terms of the agreement or risk the
agreement becoming null and void.
What benefits did KRA get in the 1994 agreement? The Town
surrendered most of its land use planning and zoning power, and
that of future Councils, for a period of 14 years. This power
was passed to KRA and their Architectural Review Board (ARB).
The agreement locked in zoning, i.e., what areas would be single
family or multifamily residential, resort, or commercial.
However, for KRA’s undeveloped residential-zoned properties, the
ARB (controlled by KRA) could deviate from lot standards (such
as setbacks or coverage) without recourse to public or Board of
Zoning Appeals (BZA) review. The ARB is the ultimate arbiter
for these properties.
In
the course of drafting the DA, Town Council compared terms of
the agreement with the 1994 Comprehensive Plan. They noted the
following benefits KRA derived from the DA as follows, and as
detailed in the June 10, 1994 Town Notes.
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The Plan allows an additional 1500
dwelling units for a total of 5130 [maximum] – the Agreement
allows an additional 1974 dwelling units for a total of 5600.
[The maximum number of dwelling units permitted in PDD–1a was
approximately 7,000 units.]
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The Plan allows 400,000 sq. ft. of
commercial space – the Agreement allows 485,000 sq. ft.
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The Plan recognizes only two
sites, East Beach and West Beach as hotel sites – the
Agreement adds a small site adjacent to East Beach and a large
site adjacent to Beachwalker Park. [For a total of 325 rooms]
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The Plan is strongly oriented
toward single family housing – the Agreement allows additional
multi-family housing.
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The Plan is very restrictive on
the types of commercial activities allowed – the Agreement
broadens the types allowed.
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The Plan would allow selective use
of housing densities up to 6 units/acre – the Agreement, in
some locations, allows multi-family (12 units/acre).
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The Plan limits hotels to 4
stories and 50 feet above the first floor level – the
Agreement allows hotel heights of 70 feet and 6 stories.
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The Plan delegates control of
standards (e.g. setbacks, buffers, etc.) to the Planning
Commission – the Agreement divides the island into “developed”
and “undeveloped” areas and gives the Developer much greater
latitude [control] in the “undeveloped” areas.
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The Plan calls for 100 off-street
beach parking spaces behind the Vanderhorst Gate (for an
island total of 217) – the Agreement allows 42 of the spaces
to be on-street parking.
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The Plan calls for the Rhett’s
Bluff Landing Park to be open access with no fee to all
property owners – the Agreement permits retention of the fee
but reduces it to a token amount.
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The Plan calls for an extensive
park system for the property owners including active
recreation areas – the Agreement accepts Rhett’s Bluff
Landing, Bear Island, Captain Sam’s Spit, and a park at Blue
Heron Pond as the totality of new parklands. The Agreement
also includes transfer of the lands between the high water
line on the beach and the beach front lots to the Community
Association, and a new bike trail along Flyway Drive from
Governor’s Drive to Glen Abbey.
What benefits did the Town receive in the 1994 agreement?
KICA and, to some extent, the Town also received benefits.
These benefits included:
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Transition of KICA from Developer
control to property owner control
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Acquisition of various
properties. In addition to the recreation areas listed above,
these include the Sandcastle facility property, the Sora Rail
maintenance tract, and property for the second fire station
behind the second gate.
KICA was also free to transfer the Kiawah Island Parkway from
Betsy Kerrison to the Main Gate to the Town. This transfer
relieved KRA of responsibility of 4-laning the Parkway and
transferred the cost of Parkway maintenance to the Town.
Transfer of control of KICA to property owners was the Town’s
primary motivation for entering this agreement.
What is KRA now proposing to the Town? KRA recently
approached Town Council with a proposal to extend the current
DA “with few, if any revisions” for a period of 10 years. In
a letter to Kiawah property owners dated February 15, 2005, Mr.
Darby said, “… KRA is not asking for any new land to be
included nor for relaxation of any rules. We seek
merely an extension of the status quo to undertake the remaining
development at Kiawah with care and optimal timing.” (Mr.
Darby’s boldface and italics) What Mr. Darby has not
done in his letter is to describe the ‘status quo’, which
actually includes the following:
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KRA has the right to develop
Cougar Island, the largest remaining undeveloped parcel on
Kiawah. A total of 375 single family homes can be built on
this 250-acre tract.
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KRA has the right to build condos
or commercial properties on approximately 8.5 acres adjacent
to the Resort’s Mingo Point, just outside the Main Gate.
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KRA has the right to build a
325-room, 6-story hotel adjacent to Beachwalker Park. (These
first three items are specified in the 1994 DA, Exhibit 13.2:
Parcel-Specific Development Standards.)
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The ARB retains control over
virtually all building on the Island, and the freedom to relax
rules when it is to its advantage to do so.
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While KRA has transitioned control
of KICA to property owners, it retains a tight grip on that
body. According to an article in January 1995’s TALK written
by then KICA Property Owner Directors Tug Greer and Laura
Pulleyn, even after transition, “. . . there are a huge number
of constraints which greatly limit the authority of the board
majority.” The article goes on to say that KICA’s Operating
Standards Manual, insisted upon by KRA, gives KRA Directors
control over 41% of the operating budget and “. . .an equal
vote on the use of all reserve funds even after Property Owner
Directors have a 6 to 1 majority on the board.” Further, “It
is highly questionable whether control of the board has really
been transferred to Property Owner Directors if, even when we
have a 6 to 1 majority, we are constrained in the budget
allocation process, we cannot even change our legal counsel,
and cannot propose to the membership a change in the KICA
covenants.” They conclude that, “The control which passes to
property owners prior to 2008 is greatly restricted.”
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In 1994, KRA had 1700 acres of
undeveloped property. Today, approximately 330 acres remain.
Eighty percent (80%) of their original holdings have been
platted and sold to others.
Now what? At KPOG’s March 5 Annual Meeting, Councilman Don
McIver, standing in for the Mayor, stated that the Town is now
involved in closed-door discussions with KRA about the 1994 DA.
He emphasized that no negotiations had begun and there would be
“little public discussion” until there is an outline of the
proposed new agreement.
Prior to signing the current DA, the 1994 Town Council held
three public hearings, had additional public meetings, and a
four day session where the Agreement and its exhibits were on
display and Council Members were available to answer questions.
They also solicited recommendations from the Planning Commission
which held an additional hearing. This type and intensity of
discussion is healthy, and even more critical now that the
number of stakeholders here on the Island has expanded
significantly and KRA’s undeveloped property stake is only 20%
of their original holdings.
Questions for consideration. How much development is
enough? Assuming KRA develops Cougar Island according to
standards set forth in the 1994 DA, we can expect well over 300
additional housing units at the east end of the Island. The
first phase of Freshfields is opening this spring. While it
will offer many conveniences to Kiawah’s property owners and
visitors, it is still too early to project the impact this
development will have on traffic and other intangible quality of
life issues. (We know that property owner concerns about
maintaining natural buffers around the site is one of the top
three issues for respondents to KPOG’s 2005 survey.) Do we want
additional high density (up to 12 units/acre) or commercial
construction currently permitted by the 1994 DA right outside
the Main Gate?
The
Sanctuary, Kiawah Island Golf Resort’s new hotel, opened in
August 2004 and has established itself as a key asset to the
Island. Does the Island need yet another hotel at Beachwalker
Park, as permitted by the 1994 DA?
How
much control over the Island should KRA retain as its holdings
are sold off? We need to analyze whether the authority of the
ARB should be shared with or transferred to our Community
Association as Seabrook has done. Should constraints which
greatly limit the authority of KICA’s property owner majority be
eliminated?
In
its opening gambit, KRA has done what any smart negotiator will
do. It has asked for an extension of the entire agreement with
“few, if any, revisions.” While there is less undeveloped land
up for sale now than there was in 1994, the development of what
remains could potentially forever alter the character of the
Island. What aspects of this agreement are really critical to
KRA and what concessions should the Town seek?
Potential negotiating points. Based on the information
presented in this article, here are some potential negotiating
points. The list is obviously not complete, and the order does
not prioritize.
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Changes to KICA Covenants and
voting procedures that would convey true control of the
association to property owners
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Development density at Cougar
Island
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Hotel development at Beachwalker
Park
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Commercial or high-density
residential development adjacent to Mingo Point
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Resolution of long-standing issues
regarding control and operation of Kiawah Island Utility (KIU)
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KRA payment of impact fees to
Kiawah Island Utility (KIU) to fund additional capacity for
new development
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Town acquisition of KRA properties
surrounding the Municipal Building off Beachwalker Drive
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Additional property for active
recreation or conservation purposes (in addition to what was
previously promised and not yet given). Ed. Note: Little
Bear is now under Conservation Easement to Ducks Unlimited and
Kiawah Conservancy.
Become informed! This article has just begun to scratch the
surface of this highly complex issue. The 1994 Town Notes and
January 1995 TALK article cited here provide excellent
background and are available at
www.kiawah.org. The core of the 1994 DA is contained in the
first 65 pages. Copies of that section, the 1994 Comprehensive
Plan, and the current Comprehensive Plan are available in Town
Hall.
Become involved! Mr. Darby’s February 15 letter asks each
of us to write to our Town Officials and let them know where we
stand. It is probably far too early for most of us to take a
position on KRA’s request yet. It is likely, however, that we
can all stand together in support of a process that is as open
and public as it was in 1994.
The
Town negotiates from a position of strength in 2005 as we have
more leverage than we did in 1994. We could simply stand pat
and let the existing DA expire. Once the Mayor signs, there
will be little opportunity for additional negotiation for the
duration of the new agreement.
This is not a time to
take sides. This is a time to come together to understand the
complex issues that face us and to determine collectively what
kind of place Kiawah will be in the future. KPOG calls upon
Mayor Wert and Town Council to begin a public dialogue now.
Let’s start with informational meetings so that we can all
become better educated about what is really at stake here and
become informed partners in the process. Kiawah property
owners deserve the opportunity to provide input to the process
before the process is over. This public discussion will
strengthen the Town’s negotiating position when our elected
officials speak with the force of our collective
priorities. |
