Hilton Head restaurant group proposes turning offices into dorm-style housing for workers

It’s time for Hilton Head’s employers to address the workforce housing crisis, SERG Restaurants Director of Operations Alan Wolf says.

As the island’s largest employer, the group’s interest in keeping on-island housing affordable is clear: It needs affordable places for its workers to live.

That’s why SERG, in partnership with the University of South Carolina Beaufort and other island businesses, are looking to invest in a bloc of mostly abandoned workspace on Office Way with plans to redevelop it into dormitory- and studio-style housing for workers and students.

Around 14,000 workers commute to Hilton Head each day, according to the town’s Workforce Housing Framework, with some traveling as far as 50 miles — passing other quickly growing Lowcountry communities that could offer similar employment opportunities closer to home.

The Town Council must still approve the project itself and a new zoning classification called islander mixed-use zoning.

Wolf said SERG was approached about the idea by J.K. Tiller Associates, a Bluffton-based architecture firm, roughly a year ago.

“SERG group has finally put our money where our mouth is, we’re invested in the product and we believe that we can help solve this problem of workforce housing,” Wolf said at a Dec. 21 Planning Commission meeting. “That burden should fall on us as employers to some degree to say, ‘How bad do you want an employee?’”

SERG wouldn’t be the first major island employer to commit to housing for service employees. Last summer, Sea Pines Resort completed its own housing complex, Palmetto Village, where its workers can rent subsidized units.

The parcel encompasses 6, 8, 10 and 12 Office Way. Wolf said redevelopment of the existing unused office space would result in 132 units, 16 of which would be quad dormitory-style units to house 64 students attending the nearby USCB campus on Hilton Head.

USCB Vice Chancellor Beth Patrick said the student housing area would be a separate building on the same property.

“The hope would be to keep them working here in the summer as well, and make those annual leases if possible,” Wolf said.

Wolf said it’s too soon to know what the exact price range would be for the living spaces. The town’s workforce housing framework identified rent of around $566 a month as affordable for “a 1-person household working in accommodation and food service.”

USCB would also be part of a shared parking agreement for 75 spaces on the HHI campus if town councilors OK the proposal, Patrick said, to help meet code ordinances for parking.

To avoid rent spiraling out of control, Wolf said he’d seek out contracts with “hoteliers, service providers, firefighters, restaurant providers” and other parties that would have an interest in keeping working islanders on Hilton Head. A minimum lease term would be established to avoid an influx of short-term rentals as well.

To facilitate the project, developers have requested a new “islander mixed-use” zoning for the parcels.

“The request is for an LMO [Land management Ordinance] text amendment to the Sea Pines Circle district that would apply for all parcels in that district that meet the use-specific conditions,” said Missy Luick, town assistant community development director.

The new use would allow for dormitory living, currently not allowed in the district, and prohibit short-term rentals by definition. The developers also have requested a 10-foot increase to the current 45-foot height limit for architectural features, like a peaked roof.

Additionally, developers have requested an undefined density, with density limited by “applicable design and performance standards, such as height and parking,” according to the request.

The Planning Commission voted to forward the proposal to the Town Council.

“I want to thank the applicants for this creative proposal. It’s a different kind of animal, because here you’re running a dormitory space for the university [and] service employee housing for the island at the south end, which is hard to find,” said commission Chairman Michael Scanlon. “Shared parking is a great idea ... the idea of committing to short-term rentals is another very positive thing about this proposal.”

The proposal is not currently on the agenda for the next meeting town council meeting on Jan. 17.