The same broker who has been used to acquire land for the city’s library and children’s museum complex is still on retainer with the nonprofit arm of Myrtle Beach and doing research on downtown property, according to a contract obtained by The Sun News.
The contract, between Dave Sebok, the head of the nonprofit Myrtle Beach Downtown Redevelopment Corp., and Scott Taylor, the broker, was signed Sept. 12. Along with additional documents received in a Freedom of Information request, it illustrates the ways in which the DRC is attempting to spur development downtown.
Never miss a local story.
The document was provided by City Manager John Pedersen. It describes a “Project A,” “Project B” and “Project C.” Project A was the name for the library complex that showed up in several emails obtained in a Freedom of Information request roughly a month ago. Pedersen confirmed that Project A comprises the work that will lead to the demolition of much of the downtown superblock, bounded by Nance Plaza, Ninth Avenue North and North Oak Street.
Pedersen said Project B, which he understood would involve some future land acquisitions, has no specific development idea attached to it. But Sebok said that Project B is effectively dead.
“There is no Project B, at this point, going forward,” Sebok said. “We’ve done what we’re going to do, and that is look at opportunities. We’re not pursuing it in any shape or fashion.”
An idea falls through
Emails obtained in a Freedom of Information request fulfilled last week showed that earlier this year, Sebok and Taylor discussed a $6.1 million transaction.
The deal, outlined in a draft letter of intent, would have taken months to officially close and included three parcels on Third Avenue North between Chester and Flagg streets; one parcel on Flagg Street between Third and Fourth avenues; a parcel bounded by Third, Flagg and South Ocean Boulevard; and two parcels on the shore just north of the Admiral Motor Inn.
Sebok and Taylor called it Project B in emails sent in January and February.
“The LOI [letter of intent] that you saw was one idea that we discussed to try to find out the level of a particular party’s interest in selling or redeveloping their property,” Sebok told The Sun News. “There was no commitment. … It was just a draft between Scott [Taylor] and me to brainstorm.”
In a letter to Sebok, dated March 21, Taylor said, “The idea of an offer was determined by me to see if this motel property owner was interested in selling and at what price he would be willing to sell.” The land included the Sea Gypsy Inn and the Coral Sands Motel.
Taylor also wrote that research on Project B began last fall, ended in January, and that in mid-February, Sebok told him the DRC and city would not purchase any land in that area. Taylor’s letter, which Pedersen provided Wednesday, also said that the owner intends to continue to operate the motels on the property.
Chuck Martino, the chairman of the DRC, said the group had spoken with the property owner but had never sought to buy the land itself.
“The DRC had had a conversation with [the property owner] about what he wanted to do with his property, but never with the idea that we would be buying it,” he said. “We have been trying to facilitate other developers.”
Sebok said the block between Third North and Fourth North was a focal point because the two blocks above it have seen recent progress, with the Buchanan hotel project near Sixth Avenue North and the demolition of the Emerald Shores and Rainbow Court, just below Fifth Avenue North.
“This is the next block, just going down the list, that could use some attention,” Sebok said. “Part of our contract with Metro [Properties Group LLC] is to look at, in a general way, who are the owners, what are their interests, what are their ideas for values, what might be assembled and what might not be assembled by somebody — not necessarily the DRC or the city.”
Pedersen said he never even presented the deal to elected officials, citing the price.
“That is so far out of the ballpark that I declined to even take that suggestion to council,” Pedersen said March 24.
Taylor is a broker who has been working under the company name Metro Properties Group LLC but who also has a connection to well-known appraiser and brokerage E.F. Hucks. The contract with the DRC outlines both a $5,000 monthly retainer for Taylor and a 6-percent fee on the sale of each property on the superblock.
Time elapsed since the contract was signed indicates that the DRC has paid out about $35,000 in retainer fees, which also count as credits against other costs owed to Metro Properties. Sebok confirmed that amount, and said fees to Taylor are paid from the DRC’s $10 million line of credit, the same one being used to buy properties for the new library.
The DRC has paid broker Scott Taylor $35,000 in retainer fees since September.
The 6-percent fee on sale prices would amount to about $143,100 on the over $2 million in finalized sales listed Monday in Horry County land records. But Sebok said the amount of commission paid out is hard to pin down because: retainer fees can be used as a credit; there are some restrictions on the amount of commission Metro Properties can charge; and some properties are in the process of negotiation or closing.
Taylor declined to comment Monday morning.
“I really don’t have anything to say,” he said. “My client’s business is their business, and if they want to talk about it, they can, but I don’t.”
A three-step plan
More than two years ago, the DRC began discussing a three-step approach to spur development downtown, Martino, the head of the DRC’s board, told The Sun News last week.
Project A involved redeveloping the superblock, but when discussions began, officials had not identified the library complex for that space, Martino said.
The DRC was also considering building a parking deck in the south area of downtown with a police substation at the bottom. The project could have created parking for new development in the area, Martino said.
“That’s been the only discussion that we’ve done, and that’s primarily what Project B is supposed to be about,” Martino said. “Trying to find willing developers who are willing to do something with some of the properties in the south mixed-use area.”
The south mixed-use area is generally defined as Eighth Avenue North to Second Avenue North, from the shore to Kings Highway.
Then, Martino said, Project C would have addressed extending the boardwalk.
“Those were kind of our 3,000-foot discussions,” Martino said.
Sebok said that the DRC is still pursuing a project that would move a police substation to the south mixed-use area and place a parking deck above it.
“We’re still evaluating and working with various property owners and major developers to achieve that project,” he said.
‘We wouldn’t have enough’
Martino said the DRC does not have enough credit left in its $10 million loan pool to make another purchase as significant as the work being done on the new library complex.
“By the time we’re done with the children’s museum, we wouldn’t have enough to be buying any large parcels like that,” Martino said.
The library and children’s museum complex is commanding much of the DRC’s line of credit with local banks, which is intended both to help landowners tear down blighted properties and for property acquisitions by the DRC.
But Sebok said the DRC is not a developer, and that its role is more focused on facilitating redevelopment — whether by helping a builder with zoning issues that could hold back a project, connecting developers with landowners looking to sell, or connecting investors with incentives that would make a project more feasible.
For example, Sebok said the group worked with the owners of Bandito’s, who needed a zoning change for their planned 50,000-square-foot oceanfront development.
“This whole process is very normal. It’s very customary,” Sebok said. “It’s how you go about publicly and privately redeveloping troubled areas. There’s nothing unusual about any of this.”
He said the DRC will continue working with Metro Properties until “we decide that we’re done with the need for their services.”
In terms of Metro Properties’ continuing work on Project C, Sebok said, “it’s research and due diligence, is what they would do, at specific direction from us.”