A year-and-a-half ago, Mayor Keith Summey hoisted a yellow Gadsden flag over the South Carolina flag at North Charleston City Hall. To all familiar with the city’s lawsuits against the state over proposed railroad lines at the northern end of the Navy Yard, the message was as clear as the all-caps text beneath the coiled snake: “Don’t Tread On Me.”

Last Wednesday, with little fanfare, Summey took the flag down. The lawsuits were settled. North Charleston was getting a cool $14.6 million in settlements and debt relief from the state, and the state was keeping its proposed rail route, which some had feared would stifle urban renewal in the nearby Park Circle neighborhood.

The city and the state will also make a land swap on the Navy Yard, with North Charleston gaining ownership of more than 85 acres on the northern end while the state gains some property on the southern end. Significantly, North Charleston will be able to ensure access to its multimillion-dollar Riverfront Park and work to renovate the historic officers’ quarters, but it will offer the state the Power House Building, an iconic structure visible from the McMillan Avenue entrance to the Navy Yard. In schematic drawings of the Navy Yard’s gleaming future, an impeccably renovated Power House Building was often a focal point, but new plans will have to focus elsewhere.

“I’ve often been told that a perfect mediation means nobody is happy,” Summey said at the start of his pitch to North Charleston City Council, which would eventually vote 10-1 to approve a settlement with the S.C. Department of Commerce and the Division of Public Railways. At times, the litigation between the city and the state agencies appeared to be at an impasse as Gov. Nikki Haley dispatched Commerce Secretary Bobby Hitt to hash out an agreement with Summey and the city’s lawyers. In September 2011, when the City Paper asked Haley how far the rail talks had progressed, she said, “I told Bobby Hitt I wanted it done yesterday.” Six months later, in March 2012, Haley said essentially the same thing: “Well, I keep yelling at Bobby Hitt and telling him I want it done yesterday.” Summey estimates that the litigation cost the city three-quarters of a million dollars, but he said last week, “It was worth every penny.”

A speedy resolution was important because as long as the rail lines remained in question, development would remain in limbo in Summey’s two most visible redevelopment pet projects: Park Circle (where Summey lives) and the former Naval facility that has remained largely unoccupied since the Navy left North Charleston in 1996. The city and the Noisette Company have spent the past decade pitching the Navy Yard as prime real estate for new businesses and housing, but many of the warehouses and officers’ houses remain unoccupied, some in disrepair.

New rail traffic was inevitable. Additional train and truck traffic is coming to North Charleston, and the reason is the Panama Canal. In 2014, new locks will be built in the all-important Central American cut-through, allowing an increase in the “Panamax” size limit for trade vessels. Hitt estimates that the state has invested about a billion dollars in preparations for additional port traffic as a result of the Panamax increase, including a deepening project in Charleston Harbor. To handle the increase in cargo coming into the port, S.C. Public Rails intends to build a new train yard in the southern half of the Navy Yard.

Many Park Circlers fear that the additional train traffic will mean noise pollution and an increase in traffic holdups. Commuters in the neighborhood already have to contend with trains that stop dead on the tracks across East Montague and North Rhett avenues, and new train traffic could exacerbate the problem if not managed properly.

Ricky Hacker, co-owner of the Park Circle restaurant EVO, says heavy train traffic can be a deterrent to outsiders who venture into the neighborhood to dine at its restaurants. “We’re definitely concerned about the neighborhood turning into a Newark, N.J., where it’s nothing but industry,” Hacker says. “The idea wasn’t thought through too thoroughly for the people that are in the community.”

The good news for the city and the Noisette Company is that, under the current plan, a new rail line will be built around the west side of the Navy Yard, running north parallel to Spruill Avenue and skirting the city’s property on the northern end of the Navy Yard before connecting to an existing line along Virginia Avenue, at the eastern edge of Park Circle.

At a town hall meeting the night after City Council approved the settlement, Summey indicated that he would push for road overpasses at railroad crossings that will likely become much busier — one on North Rhett and two on Rivers Avenue. Moving forward, the city’s involvement with the rail plans will be through a Surface Transportation Study (for which the city will provide half of the funding) to determine the best routes for new train and truck traffic coming through the new rail yard. Jeff McWhorter, president and CEO of S.C. Public Railways, said the current plans for rail routes are “not set in stone,” but he recognizes that the city wants some overpasses.

Here’s the thing about those overpasses, though: There’s no guarantee that they will be built. The only place they’re promised in writing is in a 2002 Memorandum of Understanding between the city and the State Ports Authority — the same MOU that promised new rail lines would come from the south side of the Navy Yard, and the same MOU whose breach prompted the city’s lawsuit in the first place. The settlement agreement signed last week states that “the City will reasonably consider alternatives to overpasses that the Surface Transportation Study may recommend.” City Councilman Bobby Jameson, the lone City Council member who voted against the settlement, balks at this wording. In a packet explaining his objections to the settlement, Jameson writes, “Who determines reasonably, the courts?”

The Surface Transportation Study will be conducted by two different engineering firms —one hired by Public Railways, the other by the City. It remains unclear what will happen if the engineers don’t see eye to eye. “If they don’t find a better alternative, we will not allow the port to open until those overpasses are constructed,” Summey said at the City Council meeting last week.

One unexpected impact of the lawsuit settlement will be on North Charleston’s cultural arts programs. At a town hall meeting last Wednesday night to address North Charleston citizens’ concerns about the rail deal, one of the speakers was Daniel Nadeau, co-owner of letterpress stationery company Ink Meets Paper and president of the North Charleston Artists Guild. Nadeau, who has lived in the neighborhood for five years, asked about the fate of three buildings in the Navy Yard that are currently managed by the city’s Cultural Arts Department.

In addition to the Power House, which was intended to hold some art studios (and for which the city had already spent money renovating the exterior), the city will hand over to the state three buildings currently being used for the arts: an unnamed building for rehearsal spaces and meeting rooms, the Rhodes Arts Center next to the former Academic Magnet High School campus, and Sterett Hall, a 986-seat auditorium and reception hall.

“Our vision for the arts is still intact,” Summey replied. “It’s just that now we’ll probably build something new that won’t take redesigning like the Power House.”

The day after the town hall meeting, Nadeau said he was concerned that the city no longer had definite plans to build an arts center. “It’s great that the city has money to put forth the arts, but not knowing anything more concrete is a little bit disappointing,” Nadeau said. Still, he was impressed when City Councilman Bob King called him the next day to talk more about his concerns.

Nadeau isn’t alone in being worried about the impact of new rail traffic on the neighborhood. There has long been a concern that extra rail traffic gumming up the roads and rattling people’s windows could put a brake on the urban renewal that has happened in Park Circle in the past decade. That’s why so many businesses and homes in the neighborhood sport “Save Park Circle” signs and stickers.

And the complaints aren’t just coming from the artists, business owners, and young professionals who moved in after the city’s crime rates dropped and the neighborhood’s craftsman-style bungalows became desirable. Longtime residents are worried, too. Suzanne Thigpen has owned Johnny’s restaurant, a diner in the neighborhood’s Olde Village, since 1982, and she says Summey fought a “David and Goliath” battle for the city. She can see a railroad from the sidewalk in front of her business, and she knows the stakes. “I am all for progress, but not at the expense of everything we’ve worked so hard to accomplish,” Thigpen says. “I don’t think there’s any point in complaining at this point. The plans need to be tweaked, and we need as much protection as we can get.”