South Street Partners buys Kiawah Island’s master developer
Steve’s breakdown: After 25 years in the making, South Street Partners, has bought the 10,000-acre island community development. Clearly, there will be changes up-and-down the island including the entire marketing department. Their phone number is 704-334-3212
CHARLOTTE, NC: A Charlotte real estate investment firm has bought out the longtime developer of Kiawah Island, giving it control of future development in one of the Carolinas’ premier luxury resort destinations.
South Street Partners, a boutique investment and management firm based in Charlotte’s Dilworth neighborhood, on Monday acquired Kiawah Partners, the Charleston-based firm that has spent the past 25 years as Kiawah Island’s master developer.
Kiawah, a 10,000-acre island community with more than 10 miles of ocean frontage, is located 21 miles south of Charleston.
Terms of the deal weren’t disclosed. It gives South Street control of the remaining developable residential inventory on Kiawah, as well as the members-only Kiawah Island Club, a real estate company, a utility company, a shopping center and resort properties in Ireland and the Caribbean.
The Kiawah Island Club, described by developers as the anchor of the island, includes restaurants, a spa, a beach club and two golf courses: the River Course and the Cassique Course.
Excluded from the deal was the Kiawah Island Golf Resort, home of the Ocean Course – site of the 2012 PGA Championship and the 1991 Ryder Cup matches – and four other golf courses. Also excluded: the Five-Star/Five-Diamond hotel, The Sanctuary.
Still, the sale leaves the Charlotte firm in charge of day-to-day management of the overseas properties and key elements of life on the resort island, including sales, development and operations.
“We are excited to be involved with the most distinguished residential community on the East Coast,” Patrick Melton, managing partner of South Street Partners, said in a news release.
He didn’t immediately return a call from the Observer. His firm’s website lists Melton and three other partners, and says the group has $500 million in equity invested in 15 luxury residential club developments.
In an interview Monday with the Charleston Post and Courier, Melton said his firm is evaluating the overseas properties, but has no immediate changes planned.
He said the purchase represents a minimum 10-year investment for his firm and its backers.
Kiawah has roughly 4,100 property owners, and about 400 undeveloped lots, according to a spokesman for Kiawah Partners.
The sale comes a year after a messy family feud between two cousins behind Kiawah Partners burst into public view.
The dispute centered on Leonard Long, a former Kiawah Partners executive vice president, and his first cousin, Charles “Buddy” Darby, CEO of the firm.
The two were part of a group that bought most of Kiawah Island from the Kuwaiti Investment Corp. in 1988 for $105 million.
They built it into one of the more prestigious resorts in the Carolinas, if not the East Coast. U.S. Census Bureau estimates show more than 500 owner-occupied housing units on the island were valued at more than $1 million between 2007 and 2011.
According to the Post and Courier, investors filed a lawsuit last June alleging that Darby tried to squeeze the smaller partners out of their ownership stakes.
The minority partners also expressed concerns about projects Darby was pursuing beyond Kiawah. Kiawah Partners owned the Lodge at Doonbeg, a resort in Ireland, and the proposed Christophe Harbour resort on the Caribbean island of St. Kitts.
Both resorts were included in the sale to South Street Partners.
Charles Lipuma, mayor of the town of Kiawah Island, said the lawsuit led to Kiawah Partners being placed up for sale. He expressed confidence in the new development group from Charlotte, whose members he met Monday.
“They are a very affable group of young men. I believe they will be a good addition to our community,” he said.
He added that despite the dispute between Long and Darby, the town had a good relationship with the longtime development group.
“Any differences among the partners were differences among the partners,” he said.
Darby, in a news release, wished the new owners well.
“It’s rare that a developer like Kiawah Partners remains with a project for 25 years,” he said. “It’s been a unique opportunity and I am very proud to have been at the helm of an outstanding team which has made Kiawah what it is today.”