01 - Combine whole milk, water, and kosher salt in a medium saucepan and bring to a gentle simmer over medium heat.
02 - Whisk in stone-ground grits gradually, stirring continuously to avoid lumps.
03 - Reduce heat to low and cook, stirring frequently, until grits are thickened and tender, about 20 to 25 minutes. Add additional water if necessary to maintain a creamy texture.
04 - Stir in heavy cream and unsalted butter until fully combined and smooth.
05 - Remove from heat and fold in shredded cheddar cheese until melted and cohesive.
06 - Adjust seasoning with additional salt if needed.
07 - Plate hot grits garnished with chopped fresh chives and freshly ground black pepper.