The developers of River Place, the project replacing the Water Street parking deck in downtown Wilmington, hope to see the deck demolition start by next month.
“We are planning to take the deck down in earnest in the second half of September,” said Lucien Ellison, partner at River Place developer East West Partners and project manager for River Place. “But we still have a fair amount to accomplish before we can get to that point.”
The public-private partnership’s cost increase, revised Purchase and Development Agreement (PDA) and related measures were approved by Wilmington City Council on Tuesday night in 4-1 votes. Council member Kevin O’Grady, who has said he plans to purchase a condo in River Place, and Council member Margaret Haynes recused themselves from the vote, and Council member Paul Lawler voted against three of the measures related to the changes. Before the votes, Lawler said Tuesday evening that he and others still have concerns about the amount of taxpayer investment in the development.
Because of rising costs since the original PDA was approved, the budget for the construction of River Place has risen from about $75.6 million to $83.6 million, and under the revised agreement, the city’s maximum allowable investment has increased from about $21 million to $24.2 million.
“What has caused the increase? Time,” said Deputy City Manager Tony Caudle in a presentation to the council.
Other factors include the fact that the original PDA costs were estimates and not fully detailed, along with labor shortages, he said.
The contractor and developer “have had some difficulty in finding subcontractors,” Caudle said, explaining that before the Great Recession, “there was a plethora of subcontractors [in the Wilmington area] and many of those folks were not able to make it through that recession, and so we’ve been left with less subcontractors in a market that is now beginning to boom.”
Additionally, some costs, including a flood slab necessary for building on Water Street that falls below the air rights to be purchased by the developer, were placed on the developer’s side of the ledger rather than the city’s, where they should be, Caudle said.
In discussing the rise in construction costs, Caudle used the example of the fire station built on Cinema Drive, which cost $60,000 more than the one currently under construction off Shipyard Boulevard, but is also 30 percent bigger.
River Place will be a 13-story development that will replace the defunct Water Street parking deck with a new 403-space deck, 32,000 square feet of retail space, 92 luxury condominiums and 79 high-end apartments.
While it's possible more changes could be in store for River Place in terms of pricing, the current costs are based on guaranteed maximum pricing that East West has worked out with a contractor, Caudle said.
The benchmark date set for the parking deck demolition and site preparation in the new project schedule for River Place is Nov. 1, with certificates of occupancy set to come for the new parking deck in July 2019 and the building's towers in 2019 and 2020.
On Wednesday, Ellison said, "I think both sides have done a great job of working together to come up with fair and reasonable splits" for the costs of River Place.
Almost 50 percent of the retail space has been leased and 70 percent of the condominiums are under contract in River Place, according to East West Partners owner Roger Perry.
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