Once feared, redevelopment of Myrtle Beach Air Force Base has been resounding success

MYRTLE BEACH — The federal government’s report had an ominous sounding name – “Socioeconomic Impact Analysis Study.”

Its conclusions appeared to be just as ominous: the loss of nearly 5,100 jobs; as many as 1,500 homes dumped on the resale market; a 15 percent drop in students attending local schools; unemployment rates topping 20 percent; and an economic loss topping $91 million from payrolls, taxes and other revenues as soon as South Carolina's Myrtle Beach Air Force Base shut down its operations.

Just as foreboding to many Myrtle Beach area residents was the sense of losing a longtime friend.

“You could never find a better neighbor than the Air Force, it was a great community,” said John Maxwell, a former Myrtle Beach city councilman who helped lead efforts to redevelop the base after its March 31, 1993 closure.

Now, 20 years later, the 3,937-acre former base has been transformed into a model for how closed military facilities can be revitalized to serve their communities.

Its mix of higher-education facilities, ball fields and parks, more than 1,200 homes with more on the way, a Red Cross headquarters and Veterans Affairs clinic, new general aviation and commercial airport terminals, a new technology and aerospace business park and a centerpiece commercial district called The Market Common, with its upscale shops and restaurants, has exceeded nearly everyone’s initial vision for what the base could become.

“Redevelopment of the base with The Market Common has been a great success,” said Cathy Jerrard, the Air Force’s program manager for the former Myrtle Beach base. "Compared to other [closed] bases, they are way ahead of the curve. What they’ve done there is impressive.”

Buddy Styers, a Myrtle Beach native and retired Air Force colonel, has been at the helm of the Myrtle Beach Air Base Redevelopment Authority – the group in charge of creating new jobs and development at the base – since August 1995. With all of the base property transferred from the military, Styers no longer draws a fulltime paycheck but still shows up at the office at least once a week to oversee the authority’s greatly reduced workload.

Styers spends much of his time these days helping Myrtle Beach International Airport with its economic development efforts, funneling about $200,000 annually in state grant money from the authority to the airport. The grant program that’s funding that development has been extended to 2017.

“Why should the authority go away when we can still help and be a benefit to the community?” Styers said, adding that the authority’s money will be used as matching funds for a ramp and taxiway at the airport’s International Technology and Aerospace Park, or ITAP.

Horry County Councilman Paul Prince, who was on the council when the base closed, said he’s “very pleased with the way things have turned out.”

“We might not have felt this way at the time, but the base closing has been a blessing in disguise,” he said.

“It amazes me sometimes that it’s been so successful,” Maxwell said. “I tell people that that’s going to be the center of Myrtle Beach in a few years.”

Shortly after taking over as the authority’s executive director, Styers said he spoke to a community group eager to hear his vision for the base’s future.

“Being retired Air Force, I hope no one ever forgets the base was here, but I told them that someday we will make something that will be so integral and important to the community that people may have a tendency to forget the Air Force was here,” Styers said, admitting his prediction at that time was greeted with some disbelief.

Today, with most of the beige and brown military buildings torn down or in reuse, many visitors and newcomers to Myrtle Beach may not realize the base once existed. But the city has kept the base history alive with a military museum at its Crabtree Gymnasium, a pair of parks – Valor Memorial Garden and Warbird Park, with its Wall of Service featuring the names of those who lived and worked at the base – and more than 150 historical markers along parks, bike paths and walkways on the base, detailing the contributions of those who served at the base.

The Myrtle Beach Air Force Base was on the 1991 list of military facilities scheduled for closure by the Base Closure and Realignment Commission, the federal agency that began disposing of unneeded Department of Defense facilities two years earlier. The Myrtle Beach base started winding down its operations in late 1991 and closed for good in 1993.

While the military’s economic projections for life after the base seemed dire, some local officials were concerned that the impact was going to be much worse.

“Everybody believes we’ll rebound from this, but how long will it take?” Ashby Ward, the former president of the Myrtle Beach Area Chamber of Commerce, said at the time. “There’s going to be immediate hardship on real estate and construction.”

Judy Fry, the former president of the Greater Horry County Board of Realtors, warned the base closing would bring the area’s real estate market “close to devastation.”

Jack Walker, the city’s planning director and the first to envision an urban village at the base, remembers the city was “real concerned.”

“Not only were we going to lose the on-base jobs, but the other off-base families that were associated with the military – civilian jobs, support jobs,” Walker said. “We knew it was going to be a real shock for us to absorb that impact.”

But even as the base was closing, other economic forces were taking shape to put the Myrtle Beach area at the forefront of national tourism destinations. Myrtle Beach was named a “metropolitan statistical area” in 1993, a Census Bureau designation that attracts the attention of chain restaurants and retailers looking to move to up-and-coming cities that might not otherwise appear on their radar.

That same year, Myrtle Beach land owner Burroughs & Chapin Co. Inc. hired its first outsider – Doug Wendel, a former public administrator – to run the family-owned company. Wendel’s arrival ushered in an aggressive era of tourism and real estate related development for B&C. Among Wendel’s first announcements was the Broadway at the Beach shopping and entertainment center, with its “New Center of Fun” slogan and pyramid-shaped Hard Rock Café and Ripley’s Aquarium as major draws.

Then, during the spring of 1995, a front-page story in The Wall Street Journal introduced Myrtle Beach and its attractions – including live-music theaters such as The Carolina Opry – to millions of readers nationwide, providing the spark for many of them to make their first visit to the Grand Strand.

By that time, Ward – who died in 2003 – had changed his mind about economic impact of the base closure. Ward said at the time that The Wall Street Journal article gave Myrtle Beach instant credibility.

“It shows we’re not a moss-gathering rock,” he said.

A steady influx of new businesses, jobs, visitors and retirees quickly offset the economic impact of the departing military. A few months after The Wall Street Journal discovered Myrtle Beach, American Demographics magazine dubbed the Myrtle Beach MSA the nation’s second-fastest growing area for jobs and people.

As 1995 drew to a close, the air base authority and others had replaced most of the 800 civilian jobs that had been lost when the Air Force moved out of town. Among the biggest economic development announcements was electronic manufacturer AVX Corp.’s decision to build a $6 million, 58,800-square-foot research and development facility on former base property.

While the rest of Myrtle Beach was in the midst of a $1 billion building boom in the mid-1990s, redevelopment of the base proper moved at a slower pace.

The authority, which was created by the governor’s executive order in 1994, knew it wanted to create an urban village, but the property’s roads, utilities and other infrastructure needed major upgrades and the authority didn’t have enough money to foot the bill. In addition, the authority was fielding requests from numerous groups – homeless advocates looking for shelters, the YMCA seeking recreational facilities, a preacher looking to build a private school, among others – who saw the opportunity for free or low-cost land.

The military had created a public benefit conveyance program in which local officials could transfer base land for free or at a reduced cost if the property was going to a group that served an important need for the community. The authority was the final say for land transfers at the Myrtle Beach base, and some groups exerted tremendous political pressure in an attempt to get their way.

“Those were probably some of the most difficult times for the authority,” Styers said. “We already had a development plan for the base, though, and the authority members stood their ground. They said, ‘This is our plan and we’re not going to change it’. They weren’t swayed by political actions. They made their decisions based on the economic and development needs of the community.”

The authority eventually awarded public benefit conveyances to Horry-Georgetown Technical College for its Myrtle Beach campus, the city for its recreational needs, the Red Cross for an administrative building and property for a private, Christian school. The city also won the base’s Whispering Pines golf course for free – the area’s only municipal course – after negotiating with the Air Force.

The authority unsuccessfully applied for a free transfer of the base land under an economic development conveyance program that provided closed military property at no cost to communities struggling to rebound from economic hardships caused by base closures.

The Air Force wasn’t buying the authority’s argument that it qualified for free land.

“When you walk into the Pentagon and ask for special economic concessions for Myrtle Beach, you’re not met with a straight face,” Pat McCullough, who was the Southern region manager for the Air Base Conversion Agency, said in March 1995. “People all over the country think of Myrtle Beach as very prosperous. In Washington, it’s seen as a place that can stand on its own.”

Three years after the military left, the authority was still struggling to find money for redevelopment.

“There are a lot of specific hopes for breaking things loose on the base, more now than there’s ever been,” Harold Stowe, the authority’s chairman, said in March 1996. “But we aren’t going to support our operations beyond this year unless we generate some revenue sources pretty quickly.”

The money was slow to come, but when it finally arrived, it was a flood.

In 1998, the state legislature earmarked all of the money Horry County businesses paid for Sunday liquor, beer and wine sale permits – about $1.8 million a year – to go to the authority for its operating costs. The authority continued to receive that annual amount for five years.

The authority agreed to buy the 280-acre, 770-unit base housing complex from the Air Force for $5.9 million and negotiated with a local developer who agreed to fund the authority’s down payment to the military and lease the housing for $360,000 a year. Four years later, that developer bought the housing complex for $16.6 million.

“We literally had no money in that deal,” Styers said, adding that the developer picked up all the costs of renovating the housing, sewer lines and roads in the community. The authority netted $10.7 million on the sale.

Later, the state legislature set aside 5 percent of the state income taxes paid by federal employees at S.C. military bases for redevelopment efforts at closed facilities, including Myrtle Beach. And the authority got another $6 million from the sale of property called the Ross tract, where a theme park initially was planned and the Withers Preserve housing development now is being built.

All of the authority’s newfound wealth went toward infrastructure costs and improving community resources. For example, Styers estimates the authority has given $10 million to Horry-Georgetown Technical College for its base campus and another $6 million was spent helping the city upgrade Crabtree gymnasium and build new ball fields for its recreation programs.

“We’ve put every dime back into public use,” Styers said.

The authority’s biggest coup occurred after Congress changed the rules on how economic development conveyances could occur.

The authority in 1997 negotiated with the Air Force to buy 420 acres of base property – including land where The Market Common was built – for nearly $9 million, with interest-only payments for the first three years. As the authority’s initial interest payment was coming due, Styers said he was summoned to a meeting with Air Force officials in Washington, D.C.

“When I got there, they told me that Congress had changed the law and if I could justify why I couldn’t make that payment [for the base property] they would forgive it,” Styers said. “Needless to say, on the flight back home I wrote my justification letter, typed it up the next day and we got that payment forgiven.”

The economic development conveyance the authority had been denied in 1995 was now approved.

Styers said the Air Force “did a terrific job cooperating with us, bending over backward numerous times to make it possible for us to do what we needed.”

Maxwell credits the Air Force for “allowing us to reap the rewards of land sales on the base to redevelop the land.”

“Originally, all of the money that was generated from land sales was supposed to go back to the Air Force,” Maxwell said. “They changed that rule to the benefit of the communities and allowed the communities as they sold the land to put the money back into redevelopment. That made Buddy’s group a very wealthy group.”

With the public benefit conveyances out of the way and a steady revenue stream in place, the authority started leasing its land to businesses, such as Toffino’s bakery, and pouring money into infrastructure. The authority demolished 93 obsolete military buildings – including the old barracks, where Grand Lake now exists – and embarked on a $30 million improvement to the base’s roads, water and sewer lines and stormwater drainage.

However, the last piece of the development puzzle – a New Urbanism-type village with shops and restaurants on the first floor and residences above them – still existed only in the stack of planning documents and feasibility studies in Styers’ office.

“There was a total lack of capacity in the local development community to understand what New Urbanism and traditional neighborhoods were all about because most of our developers were either hotel developers, shopping center developers or housing developers,” said Walker, who helped create the original urban village plan approved by the city in 1993, which eventually morphed into The Market Common project.

“Developers didn’t understand retail on the first floor, housing above, mixing of uses, compact development and how when you create open space it creates quality of life,” Walker said. “Neither did the banks.”

The authority, beginning in 1999, spent three years trying to market the urban village concept to developers but got nowhere. Even some authority members were skeptical.

“Every time I mentioned urban village, they’d say ‘What in the devil is an urban village’?” Styers said. “It was hard not to get discouraged.”

Walker said he was impressed that the authority stuck with the urban village plan even though some community leaders said it would never work.

“The authority protected the plan,” Walker said. “Some decisions were tough and we had to do our homework to make it clear that if they would just simply take our advice on this, it would eventually work out.”

Styers hired an Atlanta real estate broker to find a developer, but not one single prospect emerged in a year’s time.

Frustrated with the lack of progress, Styers made one last attempt to find an urban village developer by asking local real estate brokers if they knew of anyone who might be interested. One of those brokers – Gary Roberts, owner of Coldwell Banker Chicora Real Estate – was friends with a real estate broker near Washington, D.C., named Tom Shuler, who had worked on major development projects with public companies. Roberts got in touch with his friend, who recommended New York-based Leucadia National Corp. and Chicago-based McCaffery Interests as possible developers for the Myrtle Beach site.

Leucadia is a deep-pocketed holding company with subsidiaries ranging from telecommunications and mining to banking and health care while McCaffery specializes in the redevelopment of under-performing real estate, with several urban village projects in its portfolio.

Shuler brought representatives of both companies to Myrtle Beach and Roberts sold them on the local market and the potential of the base property. Leucadia and McCaffery signed a contract to develop The Market Common within two weeks of touring the site, Roberts said. The deal was announced to the public in September 2004.

“It took a team of people to make this happen, and I’m just proud to have been a part of it,” Roberts said. “I think it’s one of the best things to have happened in Myrtle Beach.”

The economic key to The Market Common project was the city’s willingness to issue nearly $41 million in bonds to help pay for public infrastructure at the base, including roads, parks, water lines and other components needed to spur development. The city used a law passed by the state legislature in the 1990s that designated the entire base as a tax increment financing district. That allowed the city to use property taxes generated by new development at the base to pay off the bonds.

“Dan McCaffery [president of McCaffery Interests] told me repeatedly that if the infrastructure wasn’t in place, he wouldn’t have been interested,” Styers said, adding that McCaffery Interests brought a new level of nationally known retail and restaurant tenants, such as P.F. Chang’s China Bistro, Williams-Sonoma and Gordon Biersch Brewery Restaurant.

More than three years after the initial announcement, the $160 million The Market Common project opened in April 2008 with nearly 400,000 square feet of retail and office space and 195 residential units, adding to the mix of housing available at other areas throughout the base.

“I’ve talked to a lot of the families that have moved out there and they just love it, and they don’t even have the whole package yet,” Walker said. “There are still a lot of little things that we want to be able to pull together that will make it a complete network of neighborhoods that work seamlessly as one.”

Among the projects still under construction is the International Technology & Aerospace Park, a business park located adjacent to The Market Common and the airport. The Myrtle Beach Regional Economic Development Corp. is charged with luring technology and aviation-related industries paying good wages to the park.

“Probably the thing that’s the most hard to achieve, but we’re slowly getting there, is the technology campus of ITAP because people still think of us as just a beach destination resort,” Walker said. “I think we’ll get there with some aggressive marketing on the part of the airport and the county, but that’s still somewhat of a missing piece.”

Walker said the city also eventually wants to extend Grand Park toward the Emory Road area to better serve the neighborhoods that are being developed at the base. There also are long-range plans to extend Fred Nash Boulevard to connect the base with Harrelson Boulevard, which stretches between U.S. 17 Business and U.S. 17 Bypass.

“That’s going to help ITAP because people are going to be able to fly in at the airport and zip right over to there without having to get on the bypass or Kings Highway,” he said.

Included among the planning documents in Walker’s office at City Hall is a series of booklets dating back 20 years with different variations of an urban village project for the former base. The initial concept was simple – a small group of two-story buildings with retail on the ground floor and homes on the second floor. As the plan evolved, the bar was set higher and higher. The end result is like nothing Walker could have imagined when he first presented the concept to the City Council in the weeks before the base closed.

“I’d say that in all aspects, this exceeds everything I thought was possible,” Walker said. “When we first started, we didn’t have a crystal clear understanding of what we wanted the neighborhoods to look like. As we got more into it, the view of what could happen became clearer. Even so, we never envisioned an urban village with the quality we have out there now. We’ve done as good a job of redevelopment, if not better, than anybody I’ve ever seen.”