Originally created 11/07/97

Island's environmentally sensitive development is slow sell



DEWEES ISLAND, S.C. -- It took nature's hand thousands of years to sculpt the windy shoreline and craft the groves of craggy oak and green-gold salt marshes of Dewees Island.

So John Knott figures a couple extra years making sure things are done right developing the 1,206 acres as an environmentally sensitive retreat is good for nature and for those who have bought a piece of that vision on the sea island 15 miles northeast of Charleston.

"We have stayed our course," said Knott, although sales have lagged original projections of five years ago.

The development, praised by architects, engineers and others, starts releasing the last of its lots next month, including some of the last available oceanfront lots on the South Carolina coast.

Plans allow only 150 homes on the island where residents must build with approved environmentally friendly materials, disturb no more than 7,500 square feet with building and landscaping and use plants native to the sea islands.

There is no bridge to Dewees, no cars and no paved roads. A trip to the store requires a 15-minute ferry ride to the Isle of Palms, just down the Intracoastal Waterway.

The emphasis is on nature -- crabbing, fishing, boating and collecting shells along the beach. There is a small pool, several tennis courts and a nature center. A small lodge will open late this year.

When the development started, the island was still recovering from 1989's Hurricane Hugo and there were delays getting permits for water and wastewater systems, Knott said.

Investors who financed the project with about $8.2 million of their own money later agreed to move more slowly. That allowed the scarce oceanfront property to appreciate and generate the needed cash, even with slow sales, to avoid the need for large bank loans to put in roads, sewer and other necessities, Knott said.

"We weren't going to go out and borrow a lot of money," he said. "Debt is what drives many developments under. Because of that, developments can't maintain their vision and promises."

Knott said the investors did not want to be forced to change their concept in midstream by adding a golf course, restaurant or other amenities simply to push lot sales.

In the beginning, with only a small dock, a small ferry and rough trails across the island, there was not much of a market, Knott said.

Now 71 lots have been sold and 25 homes built. Six more are under construction and eight are being designed. The 10 oceanfront lots for sale next month go for $500,000 each. Knott expects Dewees to sell out in about two years.

An original 1992 projection forecast all lots sold by now, with a $13 million profit on sales of $26 million. Now, the developers figure to make $27 million on sales of $49 million.

There are better investments, including the stock market, than the 6.5 percent rate of return that represents, said economist Al Parish, the director of the Center for Economic Forecasting at Charleston Southern University.

"If their goal was to maximize their profit, they would be doing very different things," Parish said. "It's not just a moneymaking venture, and they knew that going in."

He said just as the developers were not simply looking at the bottom line, buyers are looking for something other than convenience.

Toone Lapham of Asheville, N.C., used to camp on nearby Capers Island when she was in college and toured Dewees about two years ago with her husband and some family friends.

"Two hours later we were both writing a check," she said. "We weren't looking to buy anything. But it was perfect to be on a wild island and have a real bed."

Knott expects sales to accelerate now that homes are up and buyers have better feel for the development.

He knows Dewees is not for everyone, but is what some people are looking for in an era where coastal resorts are increasingly jammed with golf courses, tennis courts, boutiques and restaurants.

"This is just perfect," said Teri Morris as her 10-year-old son and one of his friends explored the shells and other exhibits at the nature center.

She said her family looked from North Carolina to Hilton Head Island before building their four-bedroom vacation home.

"We are away from everything here," she said. "To sit on the deck and see the blue herons and alligators and not hear any cars -- it's wonderful."

Charleston attorney Paul Tinkler said he used to have an interest in a condominium on nearby Kiawah Island but sold it and bought at Dewees where he plans to build next year.

"After you spend a few days on Dewees and then you get back on board the ferry and go to the Isle of Palms, you experience culture shock," he said.