North Charleston hotel conversion faced foreclosure roadblock

A shuttered North Charleston hotel slated for affordable housing was pulled from a foreclosure auction less than 24 hours before bidding was set to begin, potentially creating a roadblock in a redevelopment deal backed by $1.6 million in Charleston County funding.

The timing could have created a problem for Brick Lane development group, which is under contract to purchase the property and convert it into apartments with a 75 percent affordable housing component — but had not yet closed on the deal when the foreclosure sale appeared on the docket.

The former Grand Hotel, at 3640 Dorchester Road, was on the Charleston County Master-in-Equity sale schedule for Aug. 4, where lender Loan Funder LLC was seeking a judgment of more than $4.3 million against CG21 LLC for the shuttered 134-unit property. The sale could have opened ownership to the highest bidder.

Washington, D.C.-based Brick Lane is expected to close on the sale Aug. 14, according to Tyler Kelly, principal of the development. He declined to reveal the purchase price of the former hotel until after the closing.

The county’s $1.6 million affordable housing investment will transfer to Brick Lane at closing, according to county officials. The funding translates to a subsidy of about $17,000 per unit.

The project does not yet have a final name, although Charleston County records refer to the development as The Palms Dorchester. Kelly said that name was scrapped because it was already associated with another entity in the area.

The week of the scheduled foreclosure auction, Charleston County officials said they were not immediately aware that 3640 Dorchester Road had appeared on the sale schedule, but confirmed the $1.6 million investment would not be released to Brick Lane until the developer closes on the property.

“It’s common for County Council to vote on funding projects that may not be closed or sold yet to avoid (funding) delays,” said Chloe Field, public information officer with Charleston County.

Just before 5 p.m. the day before the scheduled auction, the property was pulled, with the address marked with a strikethrough on the Master-in-Equity website.

Andy Shook, with Cobb Hammett law firm, representing Loan Funder LLC, declined to comment on why the property was pulled from the Aug. 4 docket at the last minute.

“I’m presently unable to comment on my client’s pending matters,” Shook said.

Lawyers for the defendants CG21 LLC and Abraham Anisfeld, could not be reached for comment.

Interest accruing

According to foreclosure documents, CG21 LLC acquired the 2.25-acre property near the Dorchester Road exit off Interstate 26 with financing from Loan Funder LLC through a mortgage agreement dated Jan. 28, 2022, for $4 million. CG21 LLC lists a New Jersey address.

The loan matured June 30, 2025, and court filings state that payments were not made when due.

The principal balance totaled about $3.8 million, but the judgment grew to more than $4.3 million after interest, fees and other charges, including a 23% default interest rate, according to court documents.

Interest has continued to accrue on the property at $717 per day since May 15.

Additionally, Constantine Engineering Associates LLC has filed a mechanic’s lien against CG21 LLC and Abraham Anisfeld for $51,565 on the property.

Stakeholders are hoping the former hotel will soon enter a new chapter. If the sale closes as expected, Brick Lane plans to begin renovations within about 30 days.

The project’s $1.6 million county investment comes through the Affordable Housing Land Acquisition Grant Program, a pilot initiative created to secure land for affordable housing projects under the Housing Our Future Plan.

The agreement requires 75% of the planned apartments to be affordable to households earning up to 80% of area median income, or $65,800 annually for a single person based on 2026 U.S. Department of Housing and Urban Development figures.

The Master-in-Equity’s office acknowledged that properties are often removed from the auction block shortly before a scheduled sale for a “myriad of reasons,” including loan negotiations, resolutions between parties or bankruptcy filings.

Kelly said the brief auction sale listing has not deterred Brick Lane and the project remains moving forward as planned. Kelly expects renovation work to begin within 30 days of the scheduled mid-August closing, several months ahead of the December deadline tied to the county’s funding agreement.

“It was just a slight hiccup in the process and it’s been resolved,” said Kelly. “We’ve been in touch with the seller constantly throughout this process.”

The redevelopment will include infrastructure upgrades, plumbing and electrical improvements and a new roof while taking advantage of the building’s existing concrete structure.

“We feel very comfortable doing this,” Kelly said. “We’ve done a lot of adaptive reuse (projects) and worked within existing buildings.”

Brick Lane has completed similar projects in Rockville, Md., and has others underway in Charlottesville, Va., and Charlotte, along with three completed projects in the Charleston area. The company has worked on affordable housing projects, warehouse conversions and office-to-residential redevelopments.

Charleston County minutes for its May 2026 meeting state the forthcoming project will be managed by Brick Lane LLC and its nonprofit affiliate Brick Lane Better