01 - In a medium saucepan, warm milk, water, and kosher salt over medium heat until it reaches a gentle simmer.
02 - Slowly whisk in the stone-ground grits, stirring constantly to avoid lump formation.
03 - Lower the heat to low and continue cooking, stirring frequently, until the grits thicken and become tender, approximately 20 to 25 minutes. Add additional water if necessary to maintain a creamy texture.
04 - Stir in heavy cream and unsalted butter until the mixture is fully blended and smooth.
05 - Remove from heat and fold in the shredded sharp cheddar cheese until it is completely melted.
06 - Taste and adjust seasoning if needed. Serve immediately, garnished with chopped fresh chives and a sprinkle of freshly ground black pepper.