Mel Sembler's Checkered Past as a Commercial Developer

Okatie Crossings developer had problems with past projects, critics say
February 13, 2010

Anyone who doubts The Sembler Co.'s commitment to fulfill its promises need only ask people with whom it has done business, president Jeff Fuqua told a packed chamber in Beaufort this week.

"They'll tell you we've always done exactly what we say we're going to do," Fuqua said while explaining to County Council why the company wants tens of millions of dollars in state tax incentives to build Okatie Crossings, a 280-acre shopping center and luxury outlet mall in Beaufort and Jasper counties.

Sembler's history, however, indicates its plans sometimes go awry.

Although Fuqua showed his audience slides of several of the company's gleaming, completed developments across the Southeast during Monday's meeting, interviews and news accounts suggest several of the company's projects have not gone smoothly.

County Council Vice Chairman Paul Sommerville, who is opposed to Okatie Crossings, expressed concern about such cases in a recent statement sent to the Island Packet and Beaufort Gazette.

"No doubt (company founder and chairman Melvin) Sembler can point to some successes in his long list of projects, but not all of his developments have ended happily," Sommerville wrote.

Officials at the Coastal Conservation League and South Carolina Policy Council have also questioned the company's track record, citing many of the same cases as Sommerville.

The cases they have cited include:

• In May, Sembler asked Georgia's DeKalb County for a 20-year, 100 percent property tax abatement worth more than $40 million after economic development officials had already granted a 10-year abatement worth $20 million for the company's Town Brookhaven development, according to the Atlanta Journal-Constitution.

Holding up photos of the cleared-but-unfinished 54-acre mixed-use project in Brookhaven, Fuqua told DeKalb officials he feared "the project will look like this for a long time" without the expanded, extended abatement, according to the Dunwoody Crier.

"We just want to finish this thing, and it would be a crime if it was left like this," Fuqua said in the newspaper's report.

In August, Sembler announced the signing of four anchor tenants, although Fuqua told the Journal-Constitution the company still wants a more extensive tax break to finish the project with restaurants and boutiques.

• In January 2009, a St. Petersburg (Fla.) Times analysis of mortgage and city records showed taxpayers spent at least $20 million to build a downtown entertainment complex --significantly more than Sembler, the complex's original developer, or its then-owner.

Sembler CEO Greg Sembler told the paper the company invested heavily in the project, but an analysis of mortgage and city records determined it was unclear how much the company spent.

The complex was announced in 1999 and built by a complicated public-private partnership in which the city committed to build an $11.6 million parking garage and make $2 million in nearby landscaping, utility and street improvements, the newspaper reported.

After unsuccessfully trying to sell the complex in 2007, Sembler agreed to turn its interest in the property over to another partner, who refused to make mortgage payments.

The paper has since described the development, which was in foreclosure before a new owner took over, as a ghost town.

"Empty storefronts dominate what once symbolized a retail renaissance and, for years, a golden era in the city's downtown core for entertainment, dining and shopping," the paper's business columnist wrote this month.

• The same year, Sembler agreed to reconfigure a 90-acre commercial development in Canton, Ga., pay $500,000 to preserve land elsewhere and use more innovative sediment controls than it had originally proposed after it was challenged by the Coosa River Basin Initiative, an environmental group, executive director Joe Cook said. The group had filed lawsuits disputing a federal water-quality permit and a Georgia stream buffer variance permitting the piping and filling of streams on the site, according to GreenLaw, an environmental law organization that represented the group.

• In 2004, the city of Tampa, Fla., took over payments of $750,000 a year on a $9 million federal loan used to help build a retail and entertainment complex when developers including Sembler said they could no longer make them, the Times reported.

When asked Saturday about the company's track record, Fuqua said the cases Okatie Crossings' opponents have cited should not concern South Carolinians. The company frequently faces opponents who point to portions of news accounts about past problems and controversies that can appear unflattering, he said.

"They'll create any story that goes to help that cause," Fuqua said. "There's always going to be detractors."

The company also sometimes gets blamed for events that occurred after it is no longer involved in a project, he said.

He encouraged anyone concerned to do more research before believing such accusations.

"We have zero to hide about anything," Fuqua said. "You just don't build projects like this without attracting attention."

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