Palmetto Bluff SC Owners File Legal Action Against Developer

More than a dozen homeowners in one of Bluffton’s luxury communities claim the developer hatched a plan to ‘perform a deceptive and costly prank’ on them, according to an 83-page civil action filed last week in the Beaufort County.

At base, the plaintiffs’ primary frustrations are overcrowded amenities, forced paid membership in the Palmetto Bluff Club, and an attack on short-term rentals, according to the suit.

“The lawsuit relates to the unlawful actions of the developer of Palmetto Bluff, who works with the other defendants to carry out a deceptive and costly hoax on the owners of Palmetto Bluff,” the lawsuit states.

It alleges that Palmetto Bluff Development, LLC “built a house of cards, buttressed by deceptive and illegal governing documents – intending to get out before the cards collapsed”.

Crescent Communities, a Charlotte-based development company, purchased Palmetto Bluff in 2000, and it has since grown to become the largest area in the town of Bluffton, with space for 4,000 residential units and 180 acres of development commercial.

The waterfront gated community features residential properties, including a number of multimillion-dollar homes, with amenities such as swimming pools, fitness facilities, restaurants, clubs and grounds for children. racquet sports.

The community’s master plan calls for about 4,000 homes, of which “at least 800” lots have already been built and another 400 are underway, the lawsuit says.

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The Palmetto Bluff community is also known for its luxury resort Montage Palmetto Bluff. Provided by Palmetto Bluff

It’s also the location of the five-star Montage Palmetto Bluff hotel and spa, which made national headlines in 2019 when Justin Bieber and Hailey Baldwin married multiple times as the No. 1 NFL Draft pick. , Trevor Lawrence, and his longtime girlfriend have married. there last year. Palmetto Bluff has never been short of celebrity visitors.

Residents, who pay for amenities, find themselves “often” “overwhelmed” by hotel guests and events, who receive “Preferential treatment” according to the lawsuit, adding that homeowners no longer have access to the amenities that enticed them to buy in Palmetto Bluff.

“There is no room in the restaurants; there is no place near the swimming pools; there is no space on the courts; there is no room in the fitness areas,” the suit reads.

Plaintiffs allege that Palmetto Bluff passed on the costs of amenities to landlords, but kept the benefits to itself by prioritizing resort guests.

Dozens of defendants targeted

The prosecution names 12 defendants – Palmetto Bluff Development, LLC; Palmetto Bluff Preservation Trust, Inc.; Palmetto Bluff Club, LLC; PBLH, LLC; Palmetto Bluff Real Estate Company, LLC; Editing Palmetto Bluff, LLC; Palmetto Bluff Preservation Trust Board of Stewards and four of its officers, and South Street Partners, LLC – and 25 “John Does”, which are “unidentified companies, entities and/or individuals” who will potentially be added to the lawsuit as and as it progresses.

The main defendant appears to be Palmetto Bluff Development, but the lawsuit accuses the others of acting “in concert with each other” while Palmetto Bluff “orchestrated its fraudulent scheme”, the lawsuit alleges.

A “catalyst” for the lawsuit was a change in ownership of the development in June 2021, according to the lawsuit, where South Street Partners, LLC is now “making the day-to-day decisions” therefore “directly responsible for the current situation.”

South Street Partners is a Charleston-based private equity firm, co-investor with London-based private equity firm Henderson Park. The lawsuit alleges that the companies “have a business plan to flip Palmetto Bluff within eight years … after making as many profits from it as they can make.”

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May River Golf Club at Palmetto Bluff. COURTESY OF PALMETTO BLUFF

“These profit-driven private equity executives view Palmetto Bluff as a lucrative, short-term trade on a manipulated spreadsheet,” the lawsuit states.

He also alleges that owners being required to join the for-profit Palmetto Bluff Club, which requires membership fees and dues, is illegal because it is not a homeowners association. However, the lawsuit says the owners have no stake in the club.

Finally, the lawsuit states that although the developer initially permitted short-term rentals of certain designated homes, he “later realized, to his chagrin, that these rentals were in direct competition with his hotel business.” and diluted the station’s profits. Now the developer is “weaponizing community governing documents to propel businesses away from” those homes.

An internal document included in the lawsuit says the company’s goal is to “remove” neighborhood amenities and short-term rentals in addition to their own.

No other actions or responses by plaintiffs or defendants have yet been filed publicly.

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Palmetto Bluff, surrounded by 32 miles touching the River May, is home to the largest residential developments in Bluffton. Provided by Palmetto Bluff

This story was originally published April 19, 2022 5:38 p.m.

Lana Ferguson typically covers stories in Northern Beaufort County, Jasper County, and Hampton County. She joined The Island Packet & Beaufort Gazette in 2018 as a crime news reporter. Before coming to the Lowcountry, she worked for publications in her home state of Virginia and graduated from the University of Mississippi, where she was editor of the student daily. Lana was also a 2019 Fellow of the University of South Carolina Media Law School.
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