July 2013: Mayor Drew Laughlin
Author: Drew Laughlin | Photographer: Photography by Anne
The Condominium Conundrum
Normally, I don’t like presenting problems without solutions and options. As a Hilton Head Island attorney for over 30 years now, I like to provide my clients, when appropriate, with options. The same is true as mayor when dealing with island issues; it is my responsibility and duty as an elected official to not simply declare “we have a problem,” but to explore and articulate solutions to these problems. That normal way of doing business doesn’t easily apply to the following conundrum: Condominium units are individually owned, and the association decision process is dependent on complete agreement. So what happens when the conventional wisdom is that a condo needs to be redeveloped but not all condo unit owners agree?
Condominiums came into popularity beginning in the 1970s, and Hilton Head Island began experiencing their development at about the same time (11,436 units on HHI now). So, now we have condos that are nearing 40 years old. I used to like birthdays as much as anyone, but the older I get, the more different I look, and that is not always good! The same can be true for some condos. We have seen a surge of redevelopment and reinvestment on the island with hotels, clubhouses, and commercial centers, but what condominiums have you seen redeveloped? I can’t think of any, and the reason is that condos are individually owned. They are, in effect, floors of apartments layered inseparably atop each other and inextricably bound in ownership. You can’t keep your fourth floor while someone demolishes their second floor unit. Some island condos are visually feeling their age, aesthetically, and functionally. Whether an island condo or two ought to be demolished and rebuilt, I do not know, but there will be a day when that is needed. Demolishing or substantially rebuilding a condo, even with a reasonable expectation of a return on investment, isn’t easily achievable. So what to do?
Should the Town of Hilton Head Island change its LMO to allow or incentivize greater density for condos that wish to redevelop? Maybe, but under property right law, it still would require all unit owners to agree to the redevelopment, and that becomes complicated. Should the town condemn a condo? No, for a variety of reasons too numerous to mention. Should we pursue a legislative initiative with the state that has been used elsewhere called “en bloc sales,” where if a certain percentage of a designated building’s residents choose to sell their units, then the developer wins the option to buy all the units, which he can exercise at whatever price the supermajority agreed to? This doesn’t appeal to me.
The only tool I know that is available to me as mayor is simply to encourage condos unit owners in need to evaluate the potential return on investment. Condominium redevelopment sounds easy; it’s anything but.