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City Staff Recommends Rejecting Only Proposal For Castle St. Redevelopment Project

By Christina Haley O'Neal, posted Jul 12, 2019
The property at 1110 Castle St. is owned by the city. The city staff is recommending rejecting the only proposal it received for a redevelopment project at the former Wave Transit site. (File photo)
Wilmington City Council is set to consider a resolution to reject the only redevelopment proposal submitted for the old Wave Transit maintenance facility on Castle Street.

The resolution states that a proposal from Hipp Architecture and Development PC to redevelop the city-owned property located at 1110 Castle St., lacked confirmed financial commitments and included nearly $197,000 of “unbudgeted environmental remediation costs to the city and did not include a specified public use.”

On May 15, Hipp Architecture and Development PC submitted the only proposal to the city’s advertisement for a request for proposals (RFP) to redevelop the city property.

What had been proposed was a mixed-use project that included affordable housing and would bring together private investors and community development partners, including Clark Hipp, of Hipp Architecture as the lead developer, Cape Fear Community Land Trust and Cape Fear Habitat for Humanity.

The RFP included language that encouraged affordable and workforce housing to be included in proposals. It was listed as several criteria for evaluation.

George Taylor, chairman of TRU Colors, had sent an unsolicited proposal into the city prior to the RFP process, by way of a newly formed nonprofit corporation TRU Impact.

When the RFP process came up, TRU Impact did not submit its proposal to build a brewery and other offices. The group did not submit its proposal because of the affordable housing aspect of the RFP, and decided to look elsewhere in the city, Taylor said in June.

The redevelopment proposal submitted by Hipp Architecture (rendering pictured right) in May, included repurposing existing buildings on the 1.5-acre property, constructing three new buildings and parking on site, according to city documents.

Residential units in the development proposal included, through a proposed builder partnership with Cape Fear Habitat for Humanity, bringing 18 to 20 housing opportunities to qualified individuals and families.

The project was estimated to cost $7.1 million, with funding anticipated from multiple sources, according to city documents.

“We proposed what we believed the city and the community was looking for on that site, which is a mixed-use facility that includes housing affordability and the opportunity to provide some community-related services in that general facility,” Hipp said Friday.
 
“We feel like it’s a strong proposal and makes a lot of sense for the community and the city,” he added.

Based on an economic impact study done after the proposal was submitted to the city, Hipp said that the study showed a significant economic benefit to the community, including the potential of 61 new jobs and a city-county tax revenue of more than $75,000.
 
Because of the players involved and the partnerships that had been put together, Hipp said that the group needed time to finalize all the agreements and financing to make it happen.
 
According to city documents, there were three options considered by city staff: Give the development team 120 days to confirm commitments to the project and complete the predevelopment phase; reject the proposal and resolicit a revised RFP to include the benefits of being in an opportunity zone; or sell the property outright “as is.”

The first option included an additional request of the city, "including transfer of property (appraised value of $390,000) and the cost of remediating environmental concerns that do not have funding appropriation (est. $196,910)."
 
Staff is recommending to city council the second option, city documents state.
 
“We’re disappointed that staff recommended they want to put this back out there,” Hipp said.

The development group had requested 120 days to evaluate and gain the financial backing for the project, he said.

“The city spent two years negotiating with developers on the Water Street parking deck. We are asking for 120 days,” Hipp said.
 
Hipp said he will attend the council meeting and if council moves forward with reissuing the RFP, he would likely not spend additional time and funds to resubmit a second time.

“Again the parties who are involved, the Cape Fear Community Land Trust and Cape Fear Habitat for Humanity: these are people who have demonstrated that they are community-minded and we have all given back to this community in the last 30 years," Hipp said.

Wilmington City Council is slated to consider the resolution at its meeting Tuesday. 
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