After months of back and forth discussions, the collage of yard signs along major thoroughfares and countless speeches during city council meetings, about 70 percent of the more than 50,000 Wilmington residents who weighed in on a stadium bond referendum said ‘no’ to the proposed $37 million ballpark that was to lure an Atlanta Braves franchise to the city. The proposal failed in all of the city’s precincts. 

But it’s the sheer volume of ‘no’ votes that have some current downtown investors, property owners and commercial brokers worried and leaving the future of prime real estate in the balance.

After effects

For some real estate brokers, it’s not the decision by city voters as much as it is how the overwhelming ‘no’ vote could be deciphered by outside business interest – especially larger companies seeking city incentives or abatements to establish a presence in Wilmington – that worries them.

J. Clark Hipp, president and owner of Wilmington-based Hipp Architecture & Development, said while it was unclear how the overall message might pan out, he’s concerned about the impact it could have on economic development in the area.

“I could see if it was 55 to 45 percent of the vote that defeated the referendum,” Hipp said. “But it was voted down 70 to 30 … That’s a huge margin of defeat, and I think any company that’s looking at the area to expand and may need city incentives to do it may question coming here. That’s my concern.”

Funded with a 2.5-cent property hike, the $37 million multipurpose stadium pitched to voters boasted more than 6,000 seats, executive club suites, river views and a 1.5-acre city park. City officials had focused on the roughly 8.06-acre site of the former Sawmill Marina development for the stadium’s proposed site.

Hipp said constructing the stadium and the impending development that would have surrounded it, would have boosted values and pushed vacancy rates lower for downtown, including his own properties on Front and Fourth streets.

He said a serious anchor was needed to encourage new development downtown.

“I believe the larger, national retailers and businesses looking to establish in outer markets want to see the public has a commitment to infrastructure and amenities in the area,” Hipp said. “My concern is that these businesses may not think we as a city are committed to providing first rate amenities to the public, suggesting to them that we’re not going to provide the quality of life that a more established tenant acquires.” 

The fallout from the failed referendum was quickly apparent.

For starters, Mandalay Baseball and the Atlanta Braves officials said they were no longer interested in bringing a Braves franchise to the Port City. 

“We really don’t have any plan B locally or elsewhere,” Richard W. Neumann, president of Mandalay Baseball Properties, said the day after the election. “This was the opportunity we wanted to pursue, and not being successful means it’s really over. Wilmington spoke, and they don’t want to have this.”

Neumann said that given the referendum’s wide margin of defeat, it might be a long time before any minor league baseball organization considers coming to Wilmington.

“Given the outcome of the election, it’s clear to us minor league baseball in Wilmington is off the table and will be for quite some time,” Neumann said. “In the next few years, I can’t imagine anyone taking a hard look at Wilmington for minor league baseball.”

Brian Eckel, partner and principal broker with Wilmington-based Cape Fear Commercial, said his firm had met with a number of major retailers and developers interested in investing in new projects downtown had the stadium referendum passed.

It also appears that an upscale residential project proposed for the area died alongside the referendum’s defeat.

Officials with Charlotte-based South Street Partners – a private real estate investment company – previously said they would not pursue a multi-story, luxury mixed-use development on the Upper Dean tract near the intersection of Cowan and Front streets if the referendum failed.

Days before Wilmington voters were to head for the poll, officials with the firm announced plans to build a $20 million-$26 million development on 5.42 acres for the residential development that could possibly include ground-level retail, parking and 200-250 residential units.

The Charlotte-based firm also owns the former Sawmill Marina site – a piece of land south of the Upper Dean tract along the Cape Fear River that the city considered purchasing for the proposed ballpark if the referendum passed.

But since voters turned down the stadium, the properties’ future remains uncertain.
“We’re pretty long on land as it is,” said Patrick Melton, South Street Partners managing partner, in a previous interview. “We’d have to reevaluate its purpose if the vote fails.”

Multiple calls to Melton were not returned for an update on what the firm plans to do with the former Sawmill Marina site it owns, along with plans for the Upper Dean tract.

Chuck Schoninger, president and CEO of Wilmington-based USA InvestCo and developer of the Northern Riverfront Marina and Hotel project, where city officials considered purchasing part of his property for the stadium, said his staff was already in the process of scaling back plans for parts of his development – starting with the recently announced restaurants of BlackFinn and Vida Mexican Kitchen y Cantina.

“They certainly won’t be as large as we originally envisioned,” Schoninger said of talks to possibly scale back the footprint of the restaurants.

Plans for the entire parcel call for transforming the old shipping and rail channel of the former Atlantic Railroad Company into a 35-acre development expected to include a 10-story Hotel Indigo, restaurants, shopping and class-A office and retail space.

Schoninger said while the marina project remains on track for completion by spring 2014, the rest of his development timeline is in flux.

“We’re still moving forward but not at an urgent pace,” he said. “This definitely gives us pause for how fast we want to develop our property downtown.”

He also said that the recent vote could cast doubt on Wilmington’s business climate and made his firm reconsider future projects in the city.

“We live in a competitive world where different cities are actively and competitively bidding for business,” Schoninger said. “Because the economy is so undefined right now, this is the time those communities that are progressive win the ultimate deal. It could be a few decades before people looking forward know how they want Wilmington to be defined. I’m out of ideas.”

Moving forward

Wilmington Mayor Bill Saffo said while a new stadium would have poured hundreds of millions of dollars in new investment into downtown Wilmington, the area remains prime for development.

“I see good things happening along our riverfront,” Saffo said, citing the future Embassy Suites hotel at the Wilmington Convention Center, Schoninger’s marina and Hotel Indigo project and continued Riverwalk improvements. “No doubt had the stadium referendum passed, there would have been an immediate return on that investment, but, with that said, there is still a lot of momentum downtown.”

Saffo said the city’s theater and film activities continue to be draws for the area, and continuing improvements to the Cape Fear Community College campus, including a pending performing arts center, could also lure additional investment downtown.
“We have over $200 million investment going on downtown,” Saffo said. “These are projects that were started before the stadium even came into play.”

Todd Toconis, owner and principal broker of Wilmington-based Town and Country Real Estate, said city officials should focus on relaxing city ordinances that potentially discourage developers from building higher, denser buildings downtown.

Toconis, a member of Wilmington Downtown Inc.’s board of directors, said while he supported bringing baseball downtown, he was “vehemently opposed” to taxpayers footing the bill for the project. He said for downtown to be successful, more needed to be done to entice multifamily residential developers to area.

“By increasing residential development, more people will be living downtown, and they will need services, which will drive the commercial development,” Toconis said.

Wilmington development and planning staffs plan to unveil a new Urban Mixed-Use zoning designation in the coming months that could address Toconis’ concerns.
John Hinnant, president and CEO of Wilmington Downtown Inc., added that the economic development nonprofit was also focusing on hotel development in the area – another driver for new commercial development downtown.

There are several major hotel developments pending – including the Hotel Indigo and Embassy Suites – that alone could add more than 300 rooms to the downtown area. The Courtyard Marriott, a $14 million, six-story hotel under construction at the intersection of Grace and Second streets, also plans to add 124 rooms to downtown.

“Hotels are going to be the next big thing,” Hinnant said. “We sent letters to hotel developers all over the South and had a few come in and do an analysis on the area … and we’ve got some visits with some hotel developers. The goal is to get them downtown so they can understand the dynamics and see that downtown is a viable place to visit year round.”
Hinnant said while the stadium vote could be looked at as a setback, he is focused on pushing downtown initiatives forward to advance economic and development opportunities in the area.

“The plan is continuing to take a multifaceted approach to how we promote downtown Wilmington,” he said. “While focusing to bring more residential and hotel development, we just came back from a successful trip to the Urban Land Institute convention in Denver and the Internet Summit in Raleigh. There’s really no time to cry over spilled milk because we’ve got work to do.”