Co-Working Space Near Sullivan's Island, SC

SULLIVAN’S ISLAND — A $30-million-plus private social hub being proposed for South Carolina’s wealthiest ZIP code is probably not going to advance very quickly.

Sullivan’s Island’s Town Council didn’t give the Ocean Club on Atlantic Avenue a warm reception during its meeting Aug. 15. Elected officials indicated they wanted to wait to consider the big-ticket redevelopment project at what was known for decades as the Sand Dunes Club.

They said they hope to gather more information on the developer’s background, study traffic impacts and learn more about the financial and other implications to neighboring homes and the town.

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They also noted the club doesn’t have to be private, and alternate proposals should be considered that all residents could benefit from — not just those who can afford the estimated $60,000 membership fee and $6,000 in annual dues under the current plan.

“I don’t think we have enough information to make an intelligent decision,” said Councilwoman Jody Latham. “We don’t want to make the wrong decision either way.”

Mayor Patrick O’Neil called it “a giant decision” that will affect residents and Sullivan’s for generations to come.

Their comments came after more than two dozen residents spoke for and against the club concept.

The majority were in favor of the idea as a community gathering place while property owners who were against the plan said they viewed it as a commercial operation in a residential district. The opposition also questioned if officials would set a precedent by approving a conditional use for the property.

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The town also received about five dozen letters related to the proposed Ocean Club, with 32 in support and 27 opposed.

Shep Davis, managing partner of the Sullivan’s Island Bathing Co., is leading the effort to create the club. He asked Town Council to advance the proposal to a public hearing before the Planning Commission in September.

Brian Hellman, an attorney representing the developer, said that’s not going to happen since council members indicated they wanted more information.

The property first served as club for military personnel stationed at nearby Fort Moultrie starting in the 1930s. It later became a private beachside retreat for employees of the former South Carolina Electric & Gas Co.

Dominion Energy, which bought SCE&G in 2019, closed the Sand Dunes Club at the onset of the pandemic in early 2020. It was never reopened.

The 3.5-acre site is now owned by a company affiliated with Charleston real estate investor John Derbyshire, the former owner of the Money Man Pawn shop chain. His firm paid Dominion Energy $16.2 million for the property last year.

The Sullivan’s Island Town Council and those who attended its Sept. 11 workshop heard all about the history of Jasper Hall and the Sand Dunes Club, while the company that wants to turn the historic property into a private club apparently has revised its proposal. And an outspoken member of the Council is still “extremely concerned about the precedence of granting a commercial zoning exemption in a residential district.”

Dr. Mike Walsh, referred to by Mayor Pat O’Neil as “our resident historian these days,” spoke in detail about the property on Atlantic Avenue, which made its first appearance on the island as a military beach recreation facility, burned to the ground six years later and was rebuilt and re-opened in 1933. Meanwhile, Sullivan’s Island Bathing Company will now be offering nonmembers of the proposed exclusive club the opportunity to use the pool on a limited basis.

“Most recently, we communicated the Ocean Club’s plan to offer a community membership to island residents, which offers use of the family pool and poolside food service two designated days a week between Memorial Day and Labor Day, excluding weekends and holidays,” Sullivan’s Island Bathing Club Manager Shep Davis said. “We look forward to sharing additional new details about the club and exciting amenities and programming via our newsletter.”

“Town Council has posed additional questions about the Ocean Club, and our team is diligently gathering this information to share with Council in the coming weeks,” he added.

Following the workshop, Bathing Club team members Brian Hellman and Jim Wanless said the community membership idea was part of the plan they originally presented to the town. They said membership would cost $500 per year and that they would be at the Council’s Sept. 19 meeting to address the questions posed by Council Member Scott Millimet. O’Neil said that as of Sept. 13, that item was not on the Council’s agenda.

Sullivan’s Island Bathing Company wants to spend $30 million to renovate the property and charge members $60,000 to join, plus $6,000 a year in dues.

Millimet called the proposed zoning change “a very bad precedent.”

“Let’s just say, hypothetically, they were granted a zoning exemption. In two years, they decided to sell the club. We don’t have any control over what goes in next because we already granted the exemption,” he said. “What is critical is the request to operate a for-profit business in an area currently zoned as residential. To me it opens a big old can of worms.”

Millimet said he wants to know how many similar properties the group has developed, how many they continue to have a financial interest in and how many of those properties have been repurposed or filed for bankruptcy.

Deputy Town Manager Joe Henderson explained that Davis’ group originally requested an amendment to the town’s zoning ordinance that would permit private clubs to operate in a residential district.

He said the Council is still deliberating whether to allow that proposal to move forward to the Planning Commission. He said the group submitted an application for a business license that would allow it to use the property as it was used by former owners South Carolina Gas & Electric and Dominion Energy. However, because the license had not been used for more than a year, town staff was unable to approve that plan. Davis’ group has appealed that decision to the Board of Zoning Appeals.

Walsh pointed out that his remarks “should not be taken as biased one way or the other.” He said Jasper Pavilion, included a diving board, slides, ropes and “various other paraphernalia appertaining to the enjoyment of surf-bathing.” There also was a 1,500-seat open air moving theater. The only remnant of the facility after it burned to the ground was a large stone fireplace.

In November 1932, the Army spent $9,000 to build an officers club at the same location that, in addition to the fireplace, included an elevated bungalow, a golf shop, a large assembly room, a coat room, ladies’ restrooms and a caretaker’s apartment. The first recorded use of the term Jasper Hall, he said, was in a July 27, 1933, newspaper article announcing a reception for a visiting Army unit.

Walsh’s research discovered a few photos of the inside of the building, including sort of a watch party for the 1944 Army/Navy football game.

In 1950, after the Army left Sullivan’s Island, the building was sold by the township of Sullivan’s Island to SCE&G for $27,500.

Walsh said his best estimate of the number of officers serving on Sullivan’s Island in 1944, and thus using the officers club, was fewer than 250. He also determined that the facility never had a full-service food operation. He pointed out that according to the South Carolina Department of Health and Environmental Control, there apparently never were any DHEC inspections of the Sand Dunes Club.

“There would have been inspections by the Health Department if it had been a full service operation. This indicates there was no full-service restaurant permit,” Walsh said.

He also pointed out that in addition to wedding receptions, family reunions and church covered dinners, the Sand Dunes Club hosted the swearing in of the town of Sullivan’s Island’s first Council and first mayor – Wilfred Edward Lipman.

SULLIVAN’S ISLAND — A newly formed development group plans to invest more than $30 million to acquire and renovate a 90-year-old, vacant private oceanfront club on this seaside enclave.

But elected officials want more details before signing off on allowing a commercial project in a residential area.

Sullivan’s Island Bathing Co. is asking the town to allow a members-only social venture called the Ocean Club at 1735 Atlantic Ave. as a conditional use in an area zoned for single-family homes.

Shep Davis, the development firm’s managing partner, pointed out last week that the property operated as a private club for close to a century without being open to island residents.

Under this latest proposal, they’ll have that option for the first time — at a cost of a $60,000 sign-up fee and an estimated $500 in monthly dues.

The property had been known for decades as the Sand Dunes Club. It was a private beachside retreat for employees of the former South Carolina Electric & Gas Co., which Dominion Energy acquired in early 2019 after the V.C. Summer nuclear plant debacle 18 months earlier.

The Richmond, Va.-based utility closed the property at the onset of the COVID-19 pandemic in early 2020, and it never reopened, according to attorney Brian Hellman, a Sullivan’s resident who is representing the development group.

Built in 1933 for $14,000, the then 5,400-square-foot structure was called Jasper Hall, an officer’s club for military personnel stationed at nearby Fort Moultrie. SCE&G acquired it in the 1950s and expanded it over the years to just under 10,000 square feet.

Davis said the property has not been properly kept up for several years and is in disrepair.

One neighbor recently complained of the uncovered pool starting to smell and becoming a breeding ground for mosquitoes. Hellman and Davis said the pool is being maintained.

$30 million-plus

Davis estimated it will take an investment of “in excess of $30 million” for his group to buy the property, overhaul the building and amenities and place a stormwater retention pond underground. Retrofitting the pool alone, he said could cost half a million dollars.

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Improvement plans include offering separate pools for families and adults, upgrading the existing building and landscaping the parking area. The developers also would add a fitness center, dining terrace and gazebo along with a new entry area off a beach access path.

“We can preserve the building and re-create the club for its historical use,” Davis said.

Hellman said the current proposal comes after gathering input during several meetings with residents and town leaders over the past few months.

He said the private-membership venue will provide a place for homeowners to eat and exercise without having to drive off the island or jockey for tables with tourists at the restaurants in the town’s small business district.

“It will be a gathering place to socialize that won’t compete with beachgoers,” Hellman said. “Dining will not be open to the general public and will reduce the need for residents to leave the island.”

The 3.5-acre club site is owned by a company affiliated with Charleston real estate investor John Derbyshire, the former owner of the chain of Money Man Pawn shops. The firm paid Dominion $16.2 million for the property in 2022, according to Charleston County land records.

A large house is being built for Derbyshire, who plans to remain a partner in the project, on part of the property next to the club, according to Hellman.

Members matters

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The developer said the goal is that the Ocean Club will be open to all Sullivan’s residents who want to join. Davis estimated the venture will need at least 400 members to get the project off the ground.

The proposed Ocean Club would give priority to individuals and families who primarily reside on the island, said Jim Wanless, one of the partners. Off-island residents could join, too.

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The proposed parking rules to allow a social club in a residential area require at least one parking space for every 10 memberships whose primary or secondary residences are within 2½ miles. Sixty percent of those spaces must be designated for golf carts and low-speed vehicles.

For members living outside the 2½-mile range, which is basically anyone who doesn’t live on Sullivan’s, one vehicle parking space would be required for every five memberships.

The rules also would require one bicycle space — through a rack or corral — for every 20 memberships.

“For whatever the number will be of those living off the island, they most certainly would come by car,” Davis said. “On-island residents would have much less need for parking” since they’d have the option to come by golf cart, bike or foot.

Tentative plans call for 50 car parking spaces, at least an equal number of golf cart spaces and “adequate” bicycle parking spaces, Hellman said.

Though the membership will be open to all island residents, the developers don’t expect everyone to join. They also have not set a cap on membership.

“We are trying to come up with the right number of members for the club without excluding property owners,” Davis said.

Talking to the town

During a public workshop last week, where a standing-room-only crowd spilled into the hallway, the developers addressed a list of written questions from elected officials, including the benefit to the town if the club is allowed.

There are expensive places to live in South Carolina.

Then there is Sullivan’s Island.

CashNetUSA recently ranked Sullivan’s Island as the most expensive neighborhood in South Carolina. The ranking is part of a list of most expensive neighborhoods in every U.S. state, based on Zillow data.

Home prices across South Carolina overall have skyrocketed the last two years. For instance, the median home sales price in the state was $311,032 in the first quarter of 2023, up 22% from the first quarter of 2021, according to South Carolina Realtors.

And yet, that is all chump change compared to home ownership in Sullivan’s Island. A home there costs an average of about $5.4 million, the ranking states.

The 2.5 mile-long barrier island and its charming little beach town is about 10 miles from downtown Charleston. The island has a strict preservation plan and so doesn’t have the usual accommodations that visitors would expect, like major hotels and motels. Instead, only vacation rental homes are available.

The island does feature a strong restaurant scene, with plenty of options for fine dining and family eating.

Sullivan’s Island also has a good bit of history. The island was settled in the late 17th Century by Capt. Florence O’Sullivan and was later the site of a major Revolutionary War battle.

To compile the rankings, CashNetUSA used real estate data from Zillow to group together neighborhoods of towns and cities in all 50 U.S. states. It then calculated the average price in each neighborhood by adding together the house prices in each area and dividing them by the number of properties.

Why Sullivan’s Island is pricey, it is still not among the top most expensive places to live in the U.S. Below is a list of the 10 most expensive neighborhoods in the U.S. and their average house prices, according to CashNetUSA.

To keep things more in perspective, here’s an interactive map that shows the latest median sales price for homes in each South Carolina county, using data from Redfin.