December 1, 2023
Charleston mayor’s real estate connections spawn heated ethics debate | News

A city of Charleston real estate deal is on hold after concerns were raised about Mayor John Tecklenburg’s personal connections to the property’s owners.

Although city legal counsel said the mayor did not run afoul of state ethics laws, the proposed transaction sparked a heated debate about how elected officials separate their personal, professional and public lives.

Councilman Keith Waring said the mayor should have recused himself from the discussion of the proposed property purchase because it involved two of his son’s colleagues. 

But because the property was a personal investment of his son’s colleagues and his son would see no financial gain from the deal, the mayor dismissed the idea of recusing himself. The city’s legal council agreed.

“Under what I would believe to be a fairly reasonable reading of the state ethics laws, it does not seem to me that that would be a conflict of interest,” city legal counsel Wilbur Johnson said.

By the time Johnson was able to weigh in at the Feb. 22 council meeting, the allegation had escalated into a spirited back-and-forth. It highlighted a broader issue in South Carolina: Elected officials often struggle to navigate the state’s comparatively weak ethics laws, and do so mostly at their own discretion.

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Punctuated by the mayor banging his gavel, Tecklenburg and Waring spoke over each other, each accusing the other of speaking out of order.

“All of the facts about this matter need to be brought forward,” Tecklenburg said to Waring.

“I am not out of order,” Waring said. “If you have a conflict, let’s root it out and the mayor pro tem should preside, not you.”

Staying out of the discussion to keep up appearances would have been an abdication of his duties, the mayor said.

“As long as I don’t have a conflict of interest, which I don’t, I view it as my job to advocate for what my staff put together,” he told The Post and Courier.

The dispute ultimately prompted City Council to vote 11-1 to defer their vote on the matter. The mayor voted against the deferral. Councilman William Dudley Gregorie was absent.

Council members did so to give themselves more time to evaluate both the mayor’s connection to the property’s owners and its appraised value.

“Beyond Councilman Waring bringing that to my attention, I would not have known that otherwise, so that’s why I seconded the motion to defer,” Councilwoman Caroline Parker said during the meeting of the mayor’s relationship to the property owners.

After visiting the property himself and reading through its appraisal, Councilman Peter Shahid said during the meeting that he had grown concerned that its $1.3 million appraised value was too high for its location.

“There is something with that appraisal that makes us uncomfortable,” said Shahid, a member of council’s Real Estate Committee that first reviewed the proposal.

It was not the first time City Council and the mayor have had to interpret where state law draws the line between his former career in real estate, his personal connections and his role as a public official. In 2019, council voted to commission an audit of the mayor’s office. The estimated $50,000 effort culminated in a report that found “no evidence of self-dealing.”

Johnson said City Council members have the ability to file a complaint with the State Ethics Commission if they disagree with his assessment. So far, Waring has not chosen to file a complaint but said he is considering proposing an amendment to the City Council Code of Conduct to address the issue.

“It’s an age-old question. Is the appearance of impropriety equal to impropriety itself,” said Glen Halva-Neubauer, a professor of political science at Furman University who specializes in state and local government.

The land deal

Waring’s concerns at the Feb. 22 council meeting centered on the proposed $1.3 million purchase of an upper peninsula office building at 11 Cunnington Ave., near where the northeastern edge of the Charleston peninsula sprawls into a group of historic cemeteries. The property is located next to another lot where the city plans to build affordable housing. The city’s Housing and Community Development Department proposed purchasing the office building to relocate its homeless outreach service hub, The Navigation Center.

The Navigation Center, which the city plans to rename the Hope Center, is currently located in an office building at 529 Meeting St. under a month-to-month lease, Housing and Community Development Director Geona Shaw Johnson said.

When the building’s owner told city leaders that he planned to sell or redevelop the building, Shaw Johnson said that led her to inquire about the office on Cunnington.

11 Cunnington Avenue

The city of Charleston is considering purchasing a former crematorium, located at 11 Cunnington Ave. that has been converted into office space. Due to its location surrounded by cemeteries, some council members feel it is not a good use of $1.3 million. Brad Nettles/Staff

Local real estate professional Robert Clement III bought the building as an investment property in 2019 with his associate Stuart Coleman, county tax records show. The two of them rent the space out to their real estate firm, Clement, Crawford & Thornhill Inc. Clement is co-founder and president of CC&T and Coleman is the vice president and head of brokerage. The mayor’s son, Joseph Tecklenburg, is currently a principal and stockholder at the firm as well. The mayor was a commercial real estate agent there before he ran for office.

Clement and Coleman created an LLC together when they first bought the property as they typically do when purchasing an investment property for personal purposes, Coleman said. 

“Robert Clement and I have bought a ton of stuff together,” Coleman said. “We bought 11 Cunnington Avenue three years ago with the intent to lease it out because it seemed like a good investment. We bought it, renovated it and decided to move CC&T in there with the intent to move in there and never move again.”

When the city proposed buying it and using it for homeless outreach services, Clement said he felt an emotional connection to the idea. He is chair of the Mayors’ Commission on Homelessness and Affordable Housing, a regional group that fundraises for homelessness prevention efforts in Charleston, North Charleston, Mount Pleasant and Summerville.

Although Joseph Tecklenburg works at Clement and Coleman’s office, he said he will not gain any financial benefits from the transaction. The proceeds would go to Clement and Coleman’s LLC, not the real estate firm.

“The comment that I had a financial interest in this seems kind of out of left field,” Joseph Tecklenburg said. “It’s pretty simple. I have no interest in the ownership. I would not benefit in any shape or form.”

The mayor reiterated this point to the council. Not only would his son see no financial gain from the transaction but he would also have to relocate to a new office with the rest of his colleagues.

“The real impact on my son will be the inconvenience of having to move his office,” the mayor said at the meeting.

But Waring was not convinced that the office’s location next to a cemetery made it worth its $1.3 million appraisal, especially because the same property was sold to Clement and Coleman for $650,000 in 2019. The mayor’s son’s relationship with the owners added to his skepticism.

“I said, ‘Wow, 100 percent appreciation in less than three years.’ I know our real estate market is hot, but it’s not that hot, particularly for a property that is surrounded by graveyards,” Waring told The Post and Courier.

Waring said he wants a second set of eyes on the property to ease his concerns about its valuation. When City Council voted to defer the decision, they agreed to commission a second appraisal. 

As of March 3, the property purchase was not on the March 8 council agenda. Shaw Johnson said the appraisal will likely take longer than two weeks to commission.

The mayor pushed back on the claims that the original appraisal, done by Charleston Appraisal Co., was inaccurate, especially because Clement and Coleman gutted and renovated the building, a former crematorium.

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“I am not an appraiser but I am very familiar with the real estate market. Everyone can concur that prices are going up in that area,” he told The Post and Courier. “The cost of new construction has ballooned as well.”

It’s not unusual for these kinds of overlapping interests to appear in local politics, Halva-Neubauer said.

“So much of local government are land-use decisions,” he said. “The mayor is probably going to have to use his best judgment. If he recused himself in every kind case because of the appearance of impropriety, the people lose the expertise that they voted him in there to have.”

On the other hand, he said, even an appearance of conflict of interest can be politically damaging.

“There’s old adage in politics, ‘If you are explaining, you’re losing,'” he said. “And I think here there is a lot of explaining that you have to do when a recusal isn’t legally necessary.”

Conflicts of interest

After working for over a decade in real estate, the mayor voluntarily rescinded his license. But his connections to the industry do not disappear overnight, especially in a city of 150,000 residents.

“The kind of people who can be really dynamic and robust leaders and are attracted to being elected officials at the local level are often people who have been deeply involved in civic life,” Halva-Neubauer said. “The most prominent kind of people in a growing sunbelt city such as Charleston are going to be those that are involved in the real estate and the development business.”

The way state ethics laws are structured, elected officials are responsible for evaluating their own conflicts of interest and whether they call for a recusal.

Since these laws did not force the mayor out of the conversation, the onus is on Charlestonians to decide if their mayor is behaving ethically, Halva-Neubauer said.

“The real tricky thing for the voters to asses is if a mayor’s motivation to do this kind of work is to line their pockets and get better deals or to use the kind of expertise they have to better Charleston,” he said.

In some cases, the mayor has offered to recuse himself.

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In August, the city’s Real Estate Committee met to review a proposal to buy a 10-acre tract on Sewanee Road in the Neck Area to house its public works division.

In that instance, the mayor recused himself from the discussions. The reason, he said, was that his son was a stockholder of CC&T Real Estate Services, which was representing the seller and would be paid a commission if the $6.18 million deal went through.

Also, the property owner, Shipyard Creek Associates LLC, included Clement, his son’s business partner and CC&T co-founder, though that was not disclosed at the meeting.

“Even though (Joseph Tecklenburg) wasn’t the agent involved, his company that he had an interest in would be getting some portion of a commission so I felt that I should recuse myself,” Tecklenburg told The Post and Courier.

Waring challenged the deal but not over the Tecklenburg family connection to the seller and its real estate agency. He was mostly concerned about the price, the location, environmental complications and the fact that other less-expensive properties weren’t being considered.

“I think we need to seek several sites and make a decision from there,” Waring said at the Aug. 16 meeting. “I don’t think we should have one site and one site only to choose from.”

The proposed purchase was scuttled the next day after North Charleston Mayor Keith Summey sent a letter saying the city would not allow Charleston to annex the property.

John McDermott contributed to this report.