CHARLESTON, S.C. - Some local politicians say a developer was not investigated thoroughly enough before North Charleston officials handed him the reins to a $1 billion project to redevelop a closed Navy base.
John Knott, the chief executive of the Noisette Co., said that some failures in his past are attributable to forces beyond his control and that he has an equally impressive string of successes.
But two years after the Noisette deal was signed, the company is more than $23 million in debt and is rushing to complete the first piece of the project - $6 million Riverfront Park, which is scheduled to open today.
An investigation by The (Charleston) Post and Courier shows that companies Mr. Knott created in the late 1980s and early 1990s left a trail of unpaid debts, lawsuits and unfinished projects. One failed real estate deal even cost Mr. Knott his seven-bedroom Maryland home, the newspaper reported Sunday.
In 2002, City Councilman A.C. Mitchum asked fellow council members and the mayor to hire an outside company to do a background check on Mr. Knott and other key players in Noisette.
The city was about to sign a deal to sell 320 acres of the former base to Noisette and relied on Mr. Knott's national reputation for developing Dewees Island, a resort getaway north of Charleston lauded for its environmentally sensitive restrictions.
Mr. Knott's rsum also listed scores of national awards and projects ranging from the restoration of Baltimore's Inner Harbor to environmental planning for Mepkin Abbey in Moncks Corner.
The council, liking Mr. Knott's plan to turn the Noisette portion of the base into a community of thousands of homes, offices and shops, signed a no-bid deal that required no down payment from Noisette and no mortgage payments on the land for five years.
The newspaper's investigation found that, like many developers in the real estate market of the late 1980s, Mr. Knott's companies borrowed heavily to finance projects just as thousands of savings and loans were failing nationwide. Those failures led to the collapse of financing for real estate deals.
Among the newspaper's findings:
- One of Mr. Knott's companies missed a payment on a townhouse community in suburban Washington, D.C., resulting in a foreclosure and a tangled web of lawsuits among Mr. Knott, the bank and property owners.
- A Knott company development of single-family homes in the Washington area ended in foreclosure and more than a dozen lawsuits from vendors, ranging from unpaid concrete workers and roofers to the financiers.
- In South Carolina, Mr. Knott provided financial backing for a limited partnership that tried to develop 12 condominiums on Wild Dunes near Charleston starting in 1988. Only four were built, and the developer's failure to pay taxes on three units led to them being seized by the county and sold at a tax auction in 1993.
Mr. Knott blames much of his past difficulties on the savings and loan meltdown. He also said he paid off most of his debts at great personal expense and does not think his past affects his ability to redevelop the part of the base his company bought.
Mr. Knott says problems at Noisette stem mostly from the federal government being slow to transfer portions of the land that is to be redeveloped.
"I am proud of all of my work accomplished with others over a 40-year career," he told The Post and Courier in a written statement. "I have been involved in literally thousands of projects, and I am proud of each one."