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For River Place, Latest Development Agreement Change Involves Financing

By Cece Nunn, posted Sep 29, 2017
A 13-story mixed-use development called River Place is set to replace the Water Street parking deck in downtown Wilmington. (File photo)
The Wilmington City Council on Tuesday night will consider another amendment to the purchase and development agreement for the Water Street parking deck redevelopment project.

The mixed-use project, River Place, is planned to be a 13-story development to replace the defunct parking deck with a new 403-space deck, 32,000 square feet of retail space, 92 luxury condominiums and 79 high-end apartments. River Place is a public-private partnership between the city and Chapel Hill-based East West Partners.

"The amendment is needed because the timing sequence of financing for the developer and the city don’t line up," according to a city news release Friday. "The developer must complete their loan approval process before the city can get needed temporary project financing and this amendment would provide adequate time for [East West's] financing to be approved. Given the delays in financing approvals, the amended contract would also provide a delay in the transfer of air rights until Dec. 29."

Air rights involve the right to build in the airspace above a property and are needed for River Place because East West will have a long-term ground lease of the site while the city remains the owner.

"If the revised agreement is approved, it separates the 'demolition' phase of the project from the 'construction' phase, which would allow demolition of the deck to begin in October," the city news release said.

If the City Council approves the amendment to the purchase and development agreement (PDA), "we are authorized to move ahead, and so we plan to give a notice to proceed to our demolition contractor and hopefully, he will start taking the deck down in mid-October," said Lucien Ellison, River Place project manager for East West Partners.

With financing planned to be in place by the time the deck demolition is complete, East West hopes to "seamlessly move forward" on construction, Ellison said. The foundations of the project will be the next step, requiring crews to excavate the entire site six feet down before foundation work can begin, he said.

City officials agreed to revise the PDA last month because the costs of the project had gone up over the two years since the original PDA was signed, from $75.6 million to $83.6 million. The city and developer are splitting the additional cost, with East West paying $4.2 million and the city $3.8 million.

The latest PDA amendment for River Place is on the agenda for the Wilmington City Council's meeting at 6:30 p.m. Tuesday in the Council Chambers at City Hall, 102 N. Third St.

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