A real estate investment venture that has purchased the historic Cigar Factory plans and is reigniting the long-stalled overhaul of the vacant Charleston landmark.
Cigar Factory Development LLC paid about $24.18 million this week for one of the largest and best-known buildings on the peninsula, according to a deed filed Thursday with Charleston County.
Renovation work will begin immediately, and the total cost is expected to exceed $55 million, the buyers said.
The new ownership group includes Charleston-based Roi-Tan Investments, which is made up of about 10 mostly local investors, including William Cogswell of WECCO Development, Jay Weaver of Weaver Capital Partners and Sticky Fingers restaurant chain co-founder Chad Walldorf, who is chairman of the S.C. Board of Economic Advisors.
Its joint venture partner is Federal Capital Partners, a large, privately held real estate investment firm. The Chevy Chase, Md.-based company also will serve as a financier for the Cigar Factory overhaul.
Their plans for the 244,000-square-foot property at East Bay and Columbus streets call for a mix of commercial uses, including offices, restaurants, event space and retail stores. No tenants were announced Thursday.
Unlike the previous developer, the new owners aren’t proposing any residential units.
“We are excited to create a unique environment to address the growing demand of office and retail users that want to be downtown,” Cogswell said in a written statement.
Charleston Mayor Joe Riley said the deal will enhance other real estate projects planned or under way along the East Bay-Morrison Drive corridor, a mostly industrial area of the city that’s attracting buyers and developers.
“The purchase of the Cigar Factory by local developers ensures a great future for this building and its superb location, and is reflective of the improvement of our national economy,” Riley said. “The mixed-use will provide life and vitality to what has been a vacant property.”
Like many Charleston structures, the Cigar Factory has a storied past. It was built in the 1880s as a cotton mill. Some say it was where the song “We Shall Overcome” first was used in a protest during a strike by American Tobacco Co. workers in the mid-1940s.
It’s also on the National Register of Historic Places and is one of the largest privately owned commercial structures on the peninsula.
The building has been sealed up and dormant for more than four years.
The previous owner was Atlanta developer Boyd Simpson’s TSO Cigar Factory LLC. It bought the property for about $20 million in mid-2007 and envisioned 66 residential condominiums over retail shops and office space.
That sale closed about six months before the last recession took hold and sucked the air out of the local real estate market.
Simpson’s plans were derailed completely in 2009 when the bank that was funding his Charleston project failed. By that point, he had tapped about half of his $37 million credit line. The Federal Deposit Insurance Corp. terminated the loan, forcing him to shut down the project in late 2009.
Simpson sued the FDIC, and the case was settled out of court two years ago. He managed to hold on to the building, which sits on about 4 acres, until this week’s sale.
Bryan Kane, vice president at Federal Capital, called the property “a unique opportunity to invest in the history and future of Charleston.”
“The building’s redeveloped commercial and retail components fulfill the strong and growing demand for high-quality lifestyle spaces on the upper peninsula,” he said in a statement.