Editor’s note: This story was updated to correct the spelling of mergers and acquisitions expert Chris Jasinski’s last name.
In a rural wedge of Greenville County between the Enoree River and its northern branch lies a swampy, spring-fed haven for a rare plant species — the bunched arrowhead — that lies in the cross hairs of sprawling residential development outside Travelers Rest.
Listed by the U.S. Fish and Wildlife Service as endangered since 1979, this watery grass doesn’t feed anything and isn’t any good to smoke. But it is an indicator species for a sensitive, wildly diverse landscape so unique, conservationists have poured millions of dollars into buying up and preserving 435 acres over the past 30 years to assure its survival.
The bunched arrowhead reportedly exists in two places in the world: Henderson County, North Carolina, and northern Greenville County.
Twice in recent years, landowners outside Travelers Rest have pitched subdivisions that — conservationists argue — would destroy the sensitive soils and groundwater sources that have kept the bunched arrowhead thriving. Developers, meanwhile, are facing an ever-increasing raft of regulations and public opposition that they say is limiting supply of much-needed housing and driving up prices.
This provided photo shows the Bunched Arrowhead, an endangered grass species found in wetlands. This plant grows near a proposed subdivision in northern Greenville County and could stand in the way of a proposed subdivision. (Photo: Provided)
Pam Barber, a biology instructor at USC Upstate and previously the land stewardship manager for Upstate Forever, described the bunched arrowhead as an “adorable little plant.”
“Really what’s happened for this plant is heart-warming,” Barber said.
The bunched arrowhead grows in so-called “seepage” forests, where foliage is fed as much by surface water as a continuous, gentle stream of clear groundwater that bubbles up through sandy soils. These forests exist in a small zone where the Blue Ridge escarpment meets the Piedmont, she said.
“When you develop land, you have driveways and roads and rooftops,” Barber said. “It’s not just about the plant. The Enoree River is right there. You have runoff from impervious surfaces. You hate to see all the blame on a little sensitive plant. It’s really the larger landscape that the plant represents.”
Two dense subdivisions pitched near preserves since 2017
Demand for home sites among the rolling hills, woods and pastures northeast of Travelers Rest — a city that has already grown nearly 15% since 2010 — is brisk and part of a larger trend. The county will add an estimated 222,000 additional residents between now and 2040, county planners say.
The area bounded by U.S. 25, the Enoree River and its northern branch is designated “suburban edge” in Greenville County’s proposed comprehensive plan, which aims to curb sprawl and push dense development in already urban areas. The first of two subdivisions pitched in this area since 2017 — with 84 half-acre lots off Blue Ridge Road — came to a halt in April of this year when the South Carolina Department of Natural Resources bought all 56 acres of the would-be neighborhood for $970,000.
The state of South Carolina along with conservation groups and individuals have preserved 435 acres of wetlands at an expense of just under $2.6 million to help preserve the endangered brushed arrowhead plant and the unique environment in which it thrives. (Photo: Anna B. Mitchell)
That property is now forever preserved as part of the neighboring Blackwell Heritage Preserve, also owned by the state natural resources department. The preserve was established 25 years ago under provisions of the Clean Water Act to help compensate for wetlands damage from construction of Interstate 85, said conservation attorney Frank Holleman of the Southern Environmental Law Center.
Population growth: Travelers Rest population on pace to grow another 14% with new housing units
The state along with several environmental groups and private citizens have spent just under $2.6 million over the past three decades buying land for preservation in the area.
In process now is a 22-home subdivision that Travelers Rest developer Craig Roy pitched this fall less than 1,000 feet from the Blackwell Heritage Preserve. Roy’s project, called Crestfield Farm, shows a 900-foot cul-de-sac road off Shelton Road lined with 0.57-acre lots on one side and 0.58-acre lots on the other, all flushing wastewater into septic tanks.
This section of the future land map in Greenville County’s proposed 2020 comprehensive plan shows the area bounded by U.S. 25 and the Enoree River as “suburban edge,” suitable for one or two homes per acre. Two developers have proposed much denser residential developments in this area in recent years. (Photo: Provided / Anna B. Mitchell)
“Oh wow, it’s right there,” Barber said when she saw a map of Roy’s proposed development.
‘A glass of water is a glass of water’
Roy argues he has already complied with stringent storm-water regulations. His plan calls for a retention pond at the southwest corner of the development — closest to the Blackwell preserve.
“A glass of water is a glass of water. It’s going to do one of two things. It’s going to sit on top, it’s going to percolate through, and it’s going to go somewhere,” he said, gesturing to county staff at a Nov. 20 planning meeting. “It’s about managing that. We can show storm-water management — as strict as they are, as tough as those people are — they can manage it the proper way.”
Developer Craig Roy makes his case Wednesday, Nov. 20, 2019, for building the Crestfield Farm subdivision near roughly 400 acres of preserved wetlands that contain the endangered brushed arrowhead plant. Conservationists argued that millions of dollars have been spent over the past three decades to protect the species, which thrives under a set of conditions unique to undeveloped areas of northern Greenville County. (Photo: Anna B. Mitchell)
Roy has spent at least $32,000 on engineering plans for Crestfield Farm and argued at the Nov. 20 meeting that the property should be deed-restricted if county planners have no intention of allowing development there.
But with a little bit of research, Holleman told The News, any developer would be aware that this area has a highly sensitive environment.
Roy’s investment, and the increasingly strict conditions on development he is encountering, are typical across the country, said Chris Jasinski, a Charlotte-based mergers and acquisitions expert in the real estate industry.
“Today, 48.6% of the revenue from new home builders come from publicly traded builders or foreign-owned builders.”Chris Jasinski, Charlotte-based mergers and acquisitions expert in the real estate industry
“Greenville is no exception,” Jasinski said. “More and more requirements are being added. That’s a broad theme that’s playing out nationally.”
To that end, independent developers like Roy are getting rarer, Jasinski said, as home builders nationwide consolidate operations in the ever more difficult pursuit of their primary raw material: land. National, publicly owned builders such as Ryan and D.R. Horton have steadily increased market share over the past decade, he said.
“In 2009, 15.4% of the revenue from all new home sales in Greenville-Spartanburg came from public builders,” Jasinski said. “Today, 48.6% of the revenue from new home builders come from publicly traded builders or foreign-owned builders.”
Michael Dey, CEO of the Home Builders Association of Greenville, told The News in September he predicts under current regulatory conditions that Greenville County’s increasing popularity and economic growth will actually push residential development into neighboring Anderson and Spartanburg counties.
Neighbors angry county isn’t blocking development
Crestfield Farm is in an unzoned part of the county, so its fate lies with the Greenville County Planning Commission, the body charged with approving subdivision applications. At their most recent meeting on Nov. 20, members voted to kick the issue to January to give Roy time to consider whether he is willing to pay for an environmental study of the site — a condition recommended by county staff:
Due to environmental issues raised, Staff recommends that … the developer hire an independent consultant to conduct a scientific study to determine the impact of this development on the Heritage Preserve and the Bunched Arrowhead endangered species. It’s also recommended but not required that the study include an acceptable distance analysis from the Heritage Preserve areas.
“We are agreeing to give the developer 60 days to work with a consultant to come back and say if he is interested,” planning commission member Mark Jones said. “If not, it’s withdrawn. And if so, we address this in our January meeting.”
When the planning commission voted 7 to 1 on Nov. 20 to hold the application until January, Tigerville resident Julie Turner threw up her hands.
Conservation attorney Frank Holleman of Greenville, center in tie, sits with fellow opponents of the proposed Crestfield Farm subdivision on Wednesday, Nov. 20, 2019, at a Greenville County Planning Commission meeting at County Square. (Photo: Anna B. Mitchell)
“This is ridiculous,” she said. “They refuse to deny it.”
Joining her was Cindy Clark, who lives on land that first came into her family in the 1950s.
“I think the planning commission would rather have the developer pull the proposal than them have to make a decision on it,” Clark said. “They could have voted, but they didn’t.”
With Turner and Clark at the Nov. 20 planning commission meeting were 37 other property owners who live near the proposed Crestfield Farm project. Turning to them, Roy said his project would increase their property values.
“No!” they answered in unison.
Attorneys: County rules written to protect this area
Roy’s project faces two challenges within the county’s Land Development Regulations, added there in April 2018 and written in part, Holleman said, with the bunched arrowhead in mind. Under Article 3.1 of the regulations, the planning commission can deny subdivision applications that are not compatible with environmental conditions or the density of neighboring properties.
“3.1 really was written to address this particular geography,” Holleman said. “And this is an endangered species and wetland and natural environment, but more than that, under the Clean Water Act we’ve all got to preserve the wetlands function of this site or the state violates its Clean Water Act obligations.”
Greenville County’s land development regulations were updated in April 2018 to allow planners looking at subdivision applications to consider road infrastructure and an area’s density and environmental conditions. (Photo: Provided)
Article 3.1 — criticized by its supporters and opponents as too vague — has already landed the county in court twice since its inception. At a September planning commission meeting, county staff said they will likely remove 3.1 as they rewrite the county’s development code over the next couple of years. Meanwhile, environmental attorney Michael Corley said, it appears the Greenville County Planning Commission is backing away from applying 3.1. That’s a mistake so long as it remains on the books, he said.
“Pretending it doesn’t exist is going to continue to generate litigation and controversy,” Corley said. “In each situation where it comes up like this one, the commission should be very direct and very explicit on how Article 3.1 applies.”
Corley, the Upstate coordinator and attorney for the South Carolina Environmental Law Project, spoke at the Nov. 20 meeting on behalf of opponents to Roy’s project. He also is representing two homeowners opposed to the proposed Ethan Richard Estates development off Tigerville Road.
The proposed Crestfield Farm subdivision, with a plan to build 22 houses on 13 acres, is just northeast of Travelers Rest. (Photo: Anna B. Mitchell)
The proposed subdivision’s neighbors consist largely of horse farms, 13 properties on lots averaging four acres. The whole area between the Enoree and its northern branch, Corley said, is uniquely suited to large properties, he said, “because of the Enoree River, because of this extraordinary ecological resource and because of this horse culture that has developed around these properties.”
But building just six homes on the site, per the average density of neighboring properties, is not feasible given his fixed costs and considering market demand for smaller lots in the $200,000 to $400,000 range, Roy said.
“That’s just not the reality,” he said, adding that limiting the number of homes would require jacking up the price of each. “I hope we don’t follow TR and make this an elitist community.”
The proposed Crestfield Farm subdivision, with a plan to build 22 houses on 13 acres, is just northeast of Travelers Rest in an area with rare wetlands that host the endangered brushed arrowhead species of water grass. Conservation groups have spent millions of dollars over the past 30 years buying up and preserving more than 400 acres to protect the unique environment. (Photo: Anna B. Mitchell)
When the Illinois legislature passed a law last spring legalizing recreational cannabis starting Jan. 1, it set off a dealmaking rush among cultivators and a months-long scramble to secure Chicago retail properties where providers could sell the product.
That jostling began even before the city passed its own ordinance in the fall governing sales, with at least several deep-pocketed providers securing more potential outlets than they could use.
Now that city officials have set down rules and granted initial licenses, lease negotiations between cannabis companies and landlords across the city are sure to intensify as the lucky license holders struggle to beat their competitors to market and meet the stringent zoning requirements. “It’s going to be the Wild West out there as we figure out who is going to go where over the next few months,” The Lord Cos. President and Managing Partner Keith Lord said. “It’s about the biggest thing since the repeal of Prohibition.
” Bisnow/Brian Rogal Chairman of the Zoning Board of Appeals Farzin Parang at the Nov. 15 City Hall lottery As in the 1930s, retailers are trying to establish a new retail category almost overnight, and Lord, a Chicago-based owner, developer and retail broker, has been fielding calls from all directions, for his own properties and from clients with buildings targeted by cannabis retailers. Faced with additional months of struggle to secure the necessary special-use permits and community support, the retailers won’t find it easy to be first to market. “They’re nuts if they aren’t locking up spaces already,” Lord said.
The companies that dominate legal cannabis sales have mostly kept quiet, refusing to divulge where they plan to open shop, but experts say it has been a bit of a free-for-all. Other firms have decided to play it relatively safe while navigating the many rule changes city officials made the past few months. “There are some people doing very aggressive things,” Grassroots Cannabis CEO Mitch Kahn said. “We threaded the needle between an aggressive and conservative approach; I’ll leave it at that without getting into specifics.” Mayor Lori Lightfoot’s administration set the stage for this competition by placing strict limitations on where recreational sellers could operate.
The state, hoping to avoid the chaos that enveloped the legal cannabis market elsewhere in the U.S., allowed the dozens of existing medical cannabis dispensaries to corner Illinois’ recreational market. Only these dispensaries, at least initially, can get recreational licenses, one for their current sites, and another for a new, recreational-only location. Lightfoot said she did not want Chicago’s cannabis shops clustered in the city’s top tourist districts, making it difficult for many residents to access the product.
She established rules banning cannabis sales on the tourist-heavy Magnificent Mile or in the Central Loop, and divided the rest of the city into seven zones, initially limiting each to seven total medicinal and recreational shops. Eleven medical shops in Chicago opted to serve both patients and new recreational customers. Under the city rules, that left 38 out of the total 49 spots available, and 31 providers from across the region and downstate vied for these chances in a sports draft-like lottery process run by the city.
Dozens of cannabis company representatives crowded into a small room in City Hall the morning of Nov. 15 and watched as Zoning Board of Appeals Chairman Farzin Parang mixed up their recreational license applications in a metal cylinder, and pulled them out one by one, letting each licensee then pick a neighborhood. The most-desired locations were apparent rather quickly. After Parang pulled out just 12 applications, the companies had snapped up all available licenses in the North and Central districts, which include high-traffic, affluent retail trade areas such as Wrigleyville, River North, the Southport Corridor and the West Loop. Applicants left unclaimed several available licenses in the Far South and Southeast districts. Selecting a neighborhood is just the first in a string of hurdles dispensaries will face in locking down sites. The product remains controversial, and most municipalities, including Chicago, plan to tightly restrict sales.
Lightfoot and the City Council narrowed the number of Chicago buildings available by mandating dispensaries be located at least 1,500 feet apart, and at least 500 feet away from schools. “Zoning is always a major challenge, so you just can’t throw in new stores wherever you want,” Mosaic Construction Client Relationship Manager Albert Marks said. Northbrook, Illinois-based Mosaic has constructed dozens of cannabis shops nationwide, and plans to help at least one Chicago provider build out its new recreational spaces in the coming year.
The design process will also have unique challenges. Cannabis is still illegal under federal law, and that makes it a largely cash-only business. Although all sellers want aesthetically-pleasing shopping environments, security concerns are paramount, and their outlets need spaces wide enough for Brink’s trucks to pull in and out.
Most suburbs typically have a lot of suitable spaces in wide-open strip malls or office parks, but Chicago’s tighter streets provide fewer options, Marks said. “It’s going to be a little trickier, and require a lot more planning,” he said. Courtesy of Cresco Labs Cresco Labs’ Sunnyside-branded store The 1,500-foot restriction may be the most troublesome hurdle, especially as the new license holders are playing it safe, and not publicly releasing the locations they have identified as potential marijuana shops. “My competitor could be working on their own dispensary just one street over, well within 1,500 feet, and then you’re in a race with hundreds of thousands of dollars on the line,” BW Strategies Director Ryan Brandt said. “Speed to market will be a huge advantage in the permitting process.” Brandt’s firm consults with a number of U.S. cannabis operators on acquiring spaces, including PharmaCann and MedMen, two of the nation’s largest, both of which own several Illinois dispensaries that participated in the Nov. 15 lottery.
MedMen and PharmaCann began locking in spaces even before the lottery took place, as did several other deep-pocketed firms. With all the restrictions on where cannabis shops can open, it gave landlords opportunities rarely seen in the retail world. “We were left with a small batch of available parcels, and it created high expectations from a lot of landlords, and many felt their properties were pieces of gold, making negotiations more challenging,” Brandt said.
Landlords were asking cannabis providers to pay at least 10% above market rates on a per-SF basis, and up to 50% for the best locations in the hottest areas, he said. The worry that last-minute zoning changes could still knock further portions of the city out of consideration has given negotiations an even sharper edge. But the amount of cash cannabis sales generates brings a flurry of investment, and most local providers are not mom-and-pop shops, but businesses with the capital needed to overcome all of those potential stumbling blocks. IN 295 DAYS! DON’T MISS THE ASCENT 2020 — National 11.1.2020 Kahn’s Chicago-based Grassroots Cannabis raised $90M from investors earlier this year.
In the summer, Wakefield, Massachusetts-based Curaleaf said it would buy the firm for $875M. Green Thumb Industries and Cresco Labs, two other big players that joined the rush for Chicago licenses, went public last year on the Canadian Securities Exchange. And by the time Parang began pulling applications out of the drum, some were ready. BW Strategies months ago began drawing 1,500-foot circles around existing medical dispensaries, and 500-foot circles around schools, Brandt said. “If a property checked those two boxes, we began a conversation with the owner,” he said. “We already had multiple leases signed in each of our districts.”
PharmaCann in particular lucked out in the lottery. Two of its suburban dispensaries were picked fourth and fifth, and the company promptly chose the Central district for both. The last Central and North district licenses were taken when Parang drew out the name of suburban Romeoville’s Midwest Compassion Center, also owned by PharmaCann, for the 14th pick. The company went with the Northwest sector this time, just before its last spot was taken. Other big players were also lucky that Friday morning.
Cresco Labs had three dispensaries with applications in the drum. Its PDI Medical in suburban Buffalo Grove and MedMar Lakeview on Chicago’s North Side were picked first and sixth, respectively, and Joseph Caltabiano, a former mortgage banker and co-founder and president of Cresco, quickly chose the Central district for both. Like PharmaCann and MedMen, Cresco was prepared, Caltabiano said, and the size and sophistication of its operation came into play. “I come from a real estate background, and our team includes real estate developers and zoning attorneys, so we were able to prep a multitude of locations, and spent the most amount of time in the Central district,” Caltabiano said.
That has meant a lot of conversations with landlords, aldermen, local business and community groups, getting them comfortable with cannabis, he said. The company’s outreach includes discussions of security arrangements, and videos that showcase Cresco’s Sunnyside cannabis brand, which Caltabiano said is designed to remind local residents of wellness-related products, rather than stereotypical head shops. Cresco generally seeks out buildings between 3K SF and 10K SF, and prefers simple vanilla box construction, the type of buildings it can put its stamp on quickly. “An old bank is a great option,” Caltabiano said. Courtesy of Cresco Labs Cresco Labs co-founder Joseph Caltabiano Cresco readied several locations and even engaged in lease negotiations, but there was one step it would not take. “We put a hold on any final execution of any leases, because we did not want to risk the capital of Cresco on something that is literally a lottery pick,” he said.
That capital is also uniquely difficult to line up for dispensaries. Federal prohibition confines cannabis to a legal gray zone, and properties used for sales can’t have federally insured bank debt, Brandt said. So providers must find debt-free properties, or work with owners willing to restructure the debt. “There are plenty of landlords that wouldn’t rent to us, and there were even landlords that would not rent us space to use for our corporate headquarters,” Caltabiano said.
Brandt said cannabis companies generally prefer dealing with independent owners instead of large institutions like REITs, which usually worry more about running afoul of federal law. That pushes dispensaries to seek out freestanding buildings with simple debt structures, rather than mixed-use buildings with complex financing. There are two things working in dispensaries’ favor: the potential of the industry and the weakness in the retail market.
Cresco officials found that retail landlords, even in the coveted Central district, were willing to hold open potential spaces for cannabis-related businesses, both due to the retail sector’s evisceration by internet competition and anticipation of the eventual payoffs. “The retail rental environment is softer than it has been in years, so landlords are a little more flexible,” Caltabiano said.
The Chicago-area retail vacancy rate rose from 8.6% in 2013 to 11.6% earlier this year, according to a recent report from CBRE. Although the rate fell to 11.1% in the third quarter, company researchers expect additional bankruptcies and store closures will plague the market in the coming year.
And if any landlords raised questions about the stability of cannabis-related tenants, Brandt said he pointed out that the providers have successfully run medical cannabis outlets for several years now without incident. If there is still reluctance, the amount of rent a cannabis operation can afford may tip the balance, Brandt said. “We can say, ‘look, what if we pay you 10% to 15% above market?’ Then they are interested,” he said. Caltabiano said his firm will move quickly next year once it secures special-use permits from the city. “We’re capable of getting this done in an accelerated timeline, and our desire is to be open by the end of the first quarter,” he said.
Courtesy of Dispensary 33 Staff of Dispensary 33, a cannabis store in Chicago’s Andersonville neighborhood Chicago-based Green Thumb Industries, which operates dozens of dispensaries nationwide, had three of its Illinois medical dispensaries in the lottery, but had to make do with the 16th, 17th and 26th picks and won’t commit to such an aggressive schedule.
“It will be in 2020, but I don’t know when in 2020,” Senior Vice President for Government and Regulatory Affairs Dina Rollman said. The firm’s relatively late picks were not disappointing, she said, even though it got shut out of the popular locations. It chose the Northwest, West and Southwest sides. “A great location for us does not necessarily mean tourists,” Rollman said. Rollman added that Green Thumb officials don’t mind taking time to build the community relationships needed to secure city approval.
“While we are a for-profit business, when we go into a community, it’s for a long-term relationship,” she said. Still, it has already surveyed its sectors for potential sites. “Now that the lottery is over, the real work begins, and we have a real estate team that hit the ground running.”
Not every cannabis dispensary in Illinois is backed by a deep-pocketed, multistate operator, and several jumped into the lottery hoping their smaller sizes wouldn’t be a barrier. “We’re one of the only independently owned dispensaries in the city,” Dispensary 33 Director of Marketing and Patient Outreach Abigail Watkins said. The medical provider in the Andersonville neighborhood opened in 2015, and was relatively lucky on the morning of the 15th. Parang picked its application eighth, and even though one central license was still available, Dispensary 33 chose the West district.
“That was our first choice; the central district is smaller, with less space, and has all these big MSOs jockeying for position,” Watkins said. She compared Dispensary 33 to a mom-and-pop shop, one with loyal customers who appreciate its neighborhood feel. And unlike the big players, the Andersonville dispensary could not work on multiple deals in its chosen area. “All we could do was scout out locations and hope we got a good pick with the lottery,” Watkins said.
The available slots in the west district were all eventually taken, so Dispensary 33 will potentially face competition if its chosen recreational-only site is within 1,500 feet of another license holder, she acknowledged. “What it comes down to then is whoever signs a lease first,” she said. But no matter how all that plays out, Dispensary 33 will soon begin selling recreational cannabis. Like many of the state’s medical dispensaries, it also applied for and received a license to sell recreational products at its existing site. It staffed up the Andersonville location, which opened with about six people, but now employs dozens. Dispensary 33 also remodeled the interior so it can serve an onslaught of customers, as well as its regular patients. “Our Andersonville location will be open on Jan. 1 at 9 a.m. for the first time as a dual-use facility,” Watkins said.