JUST A VISION OR AN EMERGING REALITY?
When the Great Recession slammed into Hilton Head Island in 2008, it zeroed in the island’s primary revenue sources: Real estate and tourism. The malaise sent the number of visitors plummeting and, more importantly, property values tumbling. Local business people scrambled to try to stop the free fall.
Throughout 2009, local business leaders arranged meetings to sound the alarm that Hilton Head wasn’t alone in battling the outgoing economic tide. Tony Fazzini, then president of Hilton Head Hospitality Association, was among the first to invite community leaders to open discussions about what they were experiencing. The talks also were intended to help the association, representing primarily food and beverage businesses, plan its direction, said Ann-Marie Adams, former executive director of the association.
A study the year before stated that the number of visitors — representing 70 percent of the island’s retail revenue — had fallen 20 percent in less than 10 years. People were bypassing Hilton Head for brighter, shinier resorts and developments elsewhere.
Developer David Ames and Town Manager Steve Riley and others implored islanders to put their heads together to reverse the trajectory. Hilton Head had to decide what it wanted to be in the future.
“I believe it was in April 2009, there was a town council meeting where it was being discussed that we’ve got a real problem with commercial space that isn’t being utilized,” Ames said. “People didn’t like the word ‘decline’ of the island, but the non competitiveness. I think there was a sincere concern that we weren’t tending to things that were going to keep us competitive.”
The town had just completed its comprehensive plan, but it had 350 recommendations.
To bring focus to the issues, then-Mayor Tom Peeples formed the 13-member Task Force for the Island’s Future, Vision 2025, in December 2009 and appointed Ames its chairman.
After a flurry of meetings involving hundreds of people, the August 2010 report laid out the ground rules in the form of eight core island values and established three areas on which to pin the local economy: Hospitality, Retirement, and a third prong, a “Business” category in hopes of weaning the island from an over reliance on a steadily eroding flow of visitors.
The report set out a Vision 2025 where “Hilton Head Island is recognized as the most extraordinary and desirable resort, residential, retirement and business community on the East Coast due, in large measure, to its commitment to preserve its barrier island as a natural sanctuary for future generations.”
Getting there required immediate action. The task force laid out 11 essential steps toward that goal, in no particular order, from saving the Heritage Golf Tournament to sparking private venture capital via an island “angel fund” to streamlining town permits.
The report garnered a lot of attention, particularly as it arrived amid the spirited 2010 mayoral campaign, fueled by Tom Peeples’ announcement that he wouldn’t run after a 15-year reign. Seven people crowded into the race, picking up various banners straight from the report: a friendlier business environment, sustainability, historical significance, and technology. At last, attorney Drew Laughlin, who ran on a platform of making Hilton Head an easier place to do business, won a runoff election against architect Tom Crews, who focused on a wellplanned, sustainable community.
Laughlin was an ex officio member of the task force as a town council member. “I thought it was a significant event and an important exercise,” Laughlin said of the task force. “It was a discussion that needed to be had. The recommendations weren’t a surprise.”
However, as mayor Laughlin said he doesn’t refer often to the task force because he has his own vision for Hilton Head.
“It was a call to arms rather than an actual program,” he said.
“The makeup of the task force may not have represented the broadest section of the community because they all had an economic interest.”
He said people had been talking about diversifying the economy before the recession, but there wasn’t much incentive to change the status quo, even if the number of visitors was steadily declining.
“There just wasn’t a movement,” Laughlin said. “We have to get out of these rigid boxes. Otherwise, our shopping centers and resorts aren’t ever get updated. Everyone was so busy making so much money, they didn’t give it much thought.”
But then the recession took a swipe at the island’s elite.
“People in the gated communities saw their 401Ks and property values were whacked,” he said. Then they asked, “who are we?”
“There was pressure at the end to come up with some product,” Laughlin said.
Since then, some of the first steps from the task force report have been completed, some combined and a few haven’t made it off the page.
Here’s what has happened in the past three years.
PROGRESS, STEP BY STEP
1 Enhance the long-term position of the Heritage Classic Golf Tournament with shortterm public support to help bridge the gap while promoting and supporting PGA efforts to seek a longterm private sponsor. This is a high priority due to the tournaments estimated $80 million impact and visibility to the community.
The town and Beaufort County each provided $1 million and the Heritage Classic Golf Foundation drained its $4 million reserves to save the 2011 tournament. RBC signed a five-year title sponsorship and Boeing agreed to be a major sponsor in time for the 2012 tournament. “We are getting close to where ticket and hospitality sales were before the recession hit,” said Angela McSwain, Heritage Classic Foundation marketing director.
2 Create an Island Master Plan to identify priority revitalization and investment zones and areas suitable for “village center” redevelopment. This master plan will clearly communicate public commitments, incentives, priorities and revitalization options available to property owners, business owners and investors who may then choose to redevelop.
Ames said the idea for the Master Plan segued into rewriting the massive Land Management Ordinance (LMO), designating types of development by zoning district. “The town didn’t like the idea of a master plan the island,” he said. “It was too ambitious.”
Tom Crews is leading the rewriting effort, now in its third year. “We talk about our intention of what we want in a master plan as we discuss the LMO. I’d like for that to be happening now. But after three years working on the LMO, I don’t know if I’d have any sailors left on the ship” if they took on that task, too.
Crews notes that the LMO applies to only 30 percent of the island because the rest of it falls under planned urban development agreements, or PUDs, which were custom drafted for each gated community. The hope is the private communities will adopt much of the LMO changes, most of which come in chapters four through seven. Crews said driving the rewrite committee’s decisions was a frequent cry, “We don’t want to be like Myrtle Beach.”
The changes are intended to preserve Hilton Head’s “look,” but also make zoning easier to understand and more flexible. Crews said the changes “will strengthen the things that are wise and good in the LMO.” It also will try to iron out the frequent conflict between protecting “signature” trees and fire and emergency access. “Those things have butted heads over the years.”
The committee‘s work is nearly done, Crews said. He expects to submit the recommendations to Town Council this fall.
“In five years, you’ll start to see some things are being redeveloped because of incentives and removing obstacles that were in the way in the past. The market will take over. Long term, we’ll start to see some new development encouraged by a more reasonable LMO, perhaps because we changed density or height and now they can build a five-star hotel.”
3 Institute Town ordinances, policies and procedures that stimulate private sector investment. In the simplest terms, steps should be taken to encourage and facilitate private sector investment consistent with island Core Values.
Steve Riley, town manager, said the town streamlined its permitting process to make it easier to follow.
“The way it was structured, you had to jump all over the document to find all of the aspects that apply to your project. Now it’s zoning-district specific,” he said. “We’re getting a lot of positive comments. Volunteers helped staff to make permitting easier.”
Their work slashed the paperwork from 30 forms down to five. The town also created the position of a sustainability coordinator, who helps point private investors toward local resources and helps guide projects through the permitting process.
Riley said the town hasn’t changed local building codes because a state directive requires communities to seek permission to deviate from international building codes.
“We’ve streamlined processes and stimulated private investment,” Mayor Laughlin said. “A lot of it simply attitude. It’s changing your organization’s culture. I’m skeptical of creating whole new organizations.”
He said getting everyone on the same page is difficult. “It’s a tough sell when someone has specific goals. We’re very good at criticizing our institutions, but not so good at creating viable alternatives.”
4 Create a “Redevelopment Authority” or “Community Development Corporation” to devise and promote revitalization programs identified by the Island Master Plan. This autonomous or semi-autonomous body will be created to facilitate effective and timely revitalization of key areas. Although several areas on the Island could benefit from these efforts, reinvestment in the Coligny Area should be prioritized, due to its potential for greatest leverage, its popularity and epicenter qualities.
5 Establish an Island “Economic Development Leadership Commission” to promote, advocate and facilitate development of new business opportunities. At the outset this may be a task force with the goal of recommending to the Town and County the most effective structure for stimulating economic diversification. In the long term this effort may include the addition of a permanent Town staff position to collaborate with county, state and regional economic development agencies.
Riley said they are interviewing candidates for the EDC, which should be up and running this year. The town also is in the process of hiring a consultant to evaluate the arts community.
However, a 20-year debate over who should develop Coligny Plaza — government or private enterprise -- continues. Laughlin, o far, is letting private businesses lead the charge, much like the work at Shelter Cove.
“While some task force members wanted the town to assume a larger role in buying property and developing it along the task force’s outlines, particularly Shelter Cove Mall, I think there is some degree of a philosophical difference,” Laughlin said. “That property was privately owned. It would have been a huge undertaking to put the town in the position of controlling it and the only way to do is for the town to own it. That makes us a developer. We should be creating an environment that would be favorable for the private sector to invest in HHI. I’m not at all confident in the capability of the town to run Shelter Cove compared to people who have their own money in it.”
6 Establish a private sector sponsored venture capital fund called “The Hilton Head Island Angel Fund” to kick start business ventures. The island is fortunate to have the potential of having its own “Angel Fund” and the experience and knowledge to run it. This effort would send a strong message to prospective businesses and entrepreneurs and set the island apart from other communities.
“There have been conversations, but nothing significant has been done. Something might percolate in the next few months,” Ames, task force chairman, said.
7 Appoint a “Sustainability Advisory Committee” to identify, explore and promote environmental and “sustainability” options, policies and practices. The Advisory Committee will consist of representatives from the public and private sectors. The purpose of the committee would be to strengthen the Island’s environmental leadership position, enhance long-term economic and environmental sustainability and attract “green” businesses and “green oriented” travelers.
Experience Green Hilton Head, a nonprofit founded by Teresa Wade, plans to work with the town, county, gated communities, businesses and residents to educate people about environmental efforts that take the edge off of the word “sustainable.”
“Sustainability is a loaded word for a lot of people,” Ames said.
“It’s not people living in trees and hugging stuff. It’s good stuff.”
The nonprofit has an all-star advisory board, from Ames to Joseph Fraser III to Dana Beach, founder of Coastal Conservation League. Its first events, a forum on “Sustainability in Golf” at Sea Pines, is slated for October.
Laughlin wants to gently prod voluntary sustainable endeavors, not dictates, such as rigid building requirements.
“I don’t think there has been any disagreement about the importance of living in harmony with nature,” Laughlin said. “But there is substantial cost associated with requiring people to adhere to set criteria, such as LEED certification. The question becomes is the actual LEED certification worth it? At what point is the cost of these things exceeding the benefit? In public buildings, even if not certified, we tried to follow that template. I would be reluctant to make that recommendation without knowing the costs.”
He said rather than adding regulations, the key is to market what people already voluntarily do to protect the island’s natural attributes. “That’s part of the culture here. To a certain degree, it’s making people aware of that.”
8 Enhance access to technology and improve technology infrastructure. Access to technology has become an essential basic infrastructure requirement of the Island’s resort, residential and business community. All three economic drivers depend on and will benefit from improved access to technology infrastructure.
Jim Collett, a former Verizon executive and 2010 mayoral candidate, headed a cell tower committee to work with cell phone companies and private communities to develop more attractive cell towers that resembled flag poles. Carriers had put off updating towers because of Hilton Head’s lengthy permitting process.
9 Increase funding for and coordinate the messages of resort and retirement marketing. The intent is to reinforce the “island message” while stimulating demand for real estate, accommodations and services. With increased occupancy and stronger balance sheets, private sector reinvestment is more likely.
“That and the angel fund are two that haven’t gotten very far,” Ames said. He said the Hilton Head Island-Bluffton Chamber of Commerce seems to focus more on large resorts than smaller businesses that also cater to tourists.
Bill Miles, president and CEO of the chamber, said in a statement, “We’re an organization serving 1,600 members, the vast majority of those are small businesses. Bringing more visitors to the island means cash registers are ringing for businesses large and small and we’ve seen tourism rebound in a very positive way. The Mayor’s Task Force helped create discussion about the critical link between tourism and retirement. Today’s travelers are tomorrow’s residents.”
10 Establish a “Hilton Head Island Institute” for the study of community health, wellness, lifestyle, ecology, planning and design where experience, theories and knowledge are shared and leveraged for the benefit of this and other communities. An institute, dedicated to enhancing communities, would, by association, elevate Hilton Head Island’s reputation as an extraordinary and desirable place to live and visit. But more importantly, it would institutionalize the island’s leadership in community planning and keep “Quality of Life” in the forefront of island thinking.
“I was the strongest proponent for it,” Ames said. “It’s fundamentally important to the island’s future to have this innovation and creativity and intellectual curiosity.” At first, the task force envisioned that the institute would address community planning, “but when it came out in the newspaper, people suggested other things.”
Institute Executive Director Jack Alderman said work on the institute began within the Greater Island Council, but went on its own a year later as a new nonprofit.
“Long term, the institute’s success will be the future vibrance and vitality of the community,” Alderman said. “Short term, we’re looking at programming this fall and being profitable. This is a forum for thinking about what can be. We’re creating the connections that allow us to think big. We’re working a lot with a lot of existing organizations like Honey Horn, the Arts Center, and music and arts groups.”
However, gauging progress will be difficult. “Frankly, a lot of this is intangibles. You can’t always measure in mathematic terms the success of new community initiatives.”
He said Hilton Head was developed by a visionary, Charles Fraser, and the institute‘s goal is to “continue that pioneering thinking. I think that’s always a temptation to look backward as communities mature. We don’t ever want Hilton Head Island to be in that position.”
11 Become the preferred hospitality destination for youth and adult learning by developing great historical and cultural sites and by building a center for the performing arts and intellectual and cultural activities. These endeavors underscore the community’s commitment to its core values and will be most appealing to residents and guests who share those same values.
Ames said 10 and 11 have combined. He said the Institute is embracing several local organizations, such as the Mitchelville project, to draw more attention to Hilton Head’s history and the arts.
With some of the initial steps completed or underway, the next job is to stay on task, especially as the economy returns to pre-Recession levels.
The number of visitors to Hilton Head Island has rebounded from 2.3 million in 2009 to 2.4 million last year, according to the Lowcountry and Resort Islands Tourism Institute at the University of South Carolina Beaufort, and hotel occupancy was 61.9 percent through July this year, compared to 60.8 percent in 2012.
Tracking progress toward Vision 2025 is the Greater Island Council, which created the Vision Steering Committee.
The committee is split between task force members and Island Council members. It meets twice a month and regularly meets with the mayor and town manager, Ames said.
Vision committee member Ackerman said, “In many ways, the task force achieved its purpose already. The trick moving forward is to keep that fresh outlook going. I think it has been extremely positive. There is a new optimism in the area.”
He said some of that positivity comes from the rebounding economy and some big investments in island resorts, but he concedes that redevelopment might have been made without the task force’s impetus.
Ames thinks the challenge is to keep Hilton Head out of its comfort zone.
“When I came here in 1973 and worked with Charles Fraser, everything was an opportunity rather than everything is a problem. Today, the town has a tendency to avoid risk.”
However, agreeing on what constitutes progress is the next hurdle.
John Salazar, director of the Lowcountry and Resort Islands Tourism Institute at the University of South Carolina Beaufort, would like to see the island adopt factbased barometers to track the island’s economy and quality of life.
“But it requires extensive study and financial support. No discussions have taken place taking the fact-based approach further,” Salazar said. “If we are gong to make movements from point a to point b, we have to measure that movement. We haven’t agreed on data points, nor whom is going to measure them. The conversations need to continue to reach agreement on the metrics. That’s where the challenge lies.”
There have been a few fitful attempts, from Beaufort’s Together for Beaufort effort to develop data points and Beaufort County’s similar data-driven approach that looks at graduation rates, test scores and the overall economy.
“In all reality, the island is not an island. You can’t separate HHI from Bluffton from Beaufort County’s watershed,” Salazar said. “It involves a powwow.”
Salazar says USCB would be the perfect partner to lead the discussion. “The most exciting thing about USCB is we don’t have a dog in this fight, but we can’t do all this for free.”
He cited Jacksonville’s Quality of Life barometer, which drew national accolades, but he realizes “each community has unique characteristics. Ecosystems vary and even from a tourism standpoint, each area has different characteristics,” referring to Hilton Head Island, Bluffton and Beaufort.
“We can look at county well being, but we have to drill down further than that. Money movement is different in Bluffton than HHI. There are three different economies because Bluffton is developing differently, but it’s one ecosystem that we all share.
“Big data is where it’s at.”
Riley said much of the town’s focus remains local, but are working with regional alliances. “You can’t be insular.”
However, even those efforts are rocky. Infighting between Beaufort and Jasper counties and a poorly timed investment in an industrial park toppled the Lowcountry Economic Network and Alliance.
“For the past 12 months, we’ve been with the BASE Alliance, which includes the state’s military bases and Beaufort and Sumter counties,” Riley said.
Laughlin said, “I think it’s very short sighted to think that you don’t have to work with other institutes in your region. We all have a stake. We should be functioning independently, but work with others within our fabric. We’re doing well at communicating, but we don’t always agree.
Clearly there is a need to have information and facts. When you get into public sector, there should be measures to gauge performance. You can hide a lot of value judgments within a structure that is supposed to give you objective measures. I think there is an effort to get data, but the time frame and the resources available to them dictates the approach.”
Riley is wary of fact-based measurements. “We’re kind of tiptoeing into it. We don’t want to sign up for a bunch of artificial measures. We want to make sure you don’t create some math-based measurement that people think is objective because numbers are involved.”
Ames said a metric-driven approach isn’t imminent. “It could come from the private sector or a public official who has a background that says this is my management style. I need data.”