InvestmentThe Dangers of Fire in a Charleston Renovation Project

A roaring fire can bring both comfort and camaraderie, or disaster and destruction. Charleston has known many fires over its years, some of which have wiped out substantial areas of the city. A preference for building in wood and cooking with open fires is one reason why so much of Ansonborough is now brick built; why tin roofs replaced wooden shingles in the 19th century, and why our buildings have “hyphens ” as the connection to the kitchen house. We are better at preventing and dealing with fires these days, but that does not mean to say we are immune to their less than tender mercies.

We have been working on a Planned Urban Development (PUD) on the East Side. This development is planned as 24 renovated and new build “Fee Simple ” homes between Line and Columbus St., bordered by Hanover and Nassau streets. Our development is 1 block from the new $250M Courier Square construction site and should be a great use of what was vacant land and mostly derelict buildings. Planning and development takes a considerable time, during which we consult with and agree upon the conceptual and later detailed scope and designs with the city, the neighborhood and the Board of Architectural Review (BAR).  In our case it has taken some two years to reach this point (Note to potential developers: that is quite a large holding cost even before construction begins).

Some properties on the site remained occupied during that time in an effort to maximize investment return.  We have up-fitted and renovated where we can before placing on the rental market.  Some have become vacant and rents rolled over and it is these vacant ones that are at the highest risk. At the City’s request, all buildings have been cleaned out, cleared of refuse and boarded up.  That goes some way to protecting them and the neighborhood but not really far enough.  84 Nassau St was one such example. According to neighbors, it has recently been used as a temporary shelter by the homeless.  We were not aware of this.  It may also have been used for drug transactions, but again that is very difficult to control or identify in the absence of obvious drug paraphernalia.

The photographs below are to show you just what happens when it all goes horribly wrong. For whatever reason, a third party lit a fire and left it unattended. It does not take much for 150-year old wooden buildings to catch light and once the fire starts it will very rapidly spread.  The fire department was called promptly but not before the fire had penetrated the roof sheeting creating an effective wind tunnel sucking in oxygen at the base. The building could not be saved and only the action of our firefighters saved the buildings next door on Nassau St from igniting. Destruction was total and complete.  One historic family home has now been removed from the City’s stock and will never be restored. Had this occurred during Hurricane Matthew when travel around the city was difficult for first responders then the result could have been much worse. The building was due substantial renovation (already agreed to by the BAR) in a process to restore it to the design of the other two matching homes further along Nassau St.  As such it was not insured and is now a total loss.  Our company is big enough to take that loss on the chin, but for many it would mean the end of their project.

So what have we learned from this all?  Always keep a site clear and accessible as we had done.  Clear all building internals giving firefighters a chance to limit the damage.  Tragedy can and will strike at some point, do not make the mistake of thinking it will not strike you.  If you cannot afford the loss then you should certainly spring for the insurance.

Note: A house fire is an event that we wish no one has to experience. Although this is not a regular occurrence or one that we could prepare against, it is indeed indicative that as real estate investors, your risk should not be one that you can not adequately cover loss against. Have a look at some of the other downtown and Charleston area renovation projects we have achieved.