A major mixed-use development planned on Military Cutoff Road is expected to have an annual economic impact on the area, mainly in New Hanover County, of nearly $130 million in value added, according to a report produced by UNCW.
The Avenue developer The Carroll Companies, based in Greensboro, commissioned the Swain Center at the University of North Carolina Wilmington to produce the economic impact study for the $200 million project. The Avenue is planned on 44 acres of property at 347, 349 and 565 Military Cutoff Road, 302 and 306 Lance Drive and 128 East Westwood Drive.
The Avenue would be anchored by a Westin hotel and conference center and include a spa and luxury apartments, along with space for high-end retail, upscale dining and class A offices.
According to the report, prepared by UNCW Regional Economist Adam Jones and research associates Caleb Kuhne and Garrett Wade using an economic model, "Operations of commercial development and increased consumption from new residents is estimated to support 1,800 jobs and $75 million in labor income under the probable scenario. Estimates range upward of 2,600 jobs and $108.4 million of labor income under more optimistic assumptions."
The project and activity it supports is expected to generate $4.3 million in additional property taxes and $2 million in local sales tax revenues, the study stated.
The Carroll Companies is seeking a conditional district rezoning and special use permit
from the city of Wilmington to be able to proceed with development of The Avenue, requests that are expected to be considered Wednesday at a Wilmington Planning Commission meeting.
One of the conditions recommended by the city's staff in a report to the planning panel is that The Avenue would be limited "to 525 apartment units, a 231-room hotel, 140,700 square feet of office space, 115,000 square feet of retail space, and 16,000 square feet of restaurant space."
Although it doesn't make a specific recommendation about approval or disapproval to the planning commission, the city staff report points out benefits of the project and that traffic remains a concern.
"The proposed development has numerous desirable features consistent with the policies of the Comprehensive Plan. The project would provide additional lodging options that would support tourism growth. The project would create a pedestrian-oriented development pattern within its bounds. The primary concern is the potential number of vehicle trips and the intensity of this development at this location on Military Cutoff Road," according to the report. "The applicant is pursuing additional road connections to the north and south of the site, but there is currently no guarantee that these connections will be established and it is unknown what impact these connections would have on the overall trip distribution for the project. The project would have a significant positive economic development impact by supporting tourism growth as well as the city’s tax base. The limited access to the site would result in a large amount of traffic being added to one of the city’s major road corridors that is already operating over its capacity."
Livian Jones, a Wilmington-based development consultant who has been working with The Carroll Companies on The Avenue, said Monday, "We're working with the city staff on options, along with our traffic improvements, to alleviate and improve connectivity."
She said the traffic changes The Carroll Companies is planning on making, including adding a lane from Cayman Court to Covil Farms Road, intersection improvements, a signalized crosswalk at Station Road and Military Cutoff and a Wave Transit shelter, will either not affect or improve road grades in the area.
The Wilmington Planning Commission will hold a public hearing Wednesday on the conditional district rezoning and special use permit requests, then decide whether to recommend or not recommend approval of the requests to the Wilmington City Council.
According to the economic impact study, The Avenue would be constructed in three phases, with an estimated completion by about 2025.
"Construction of the project is anticipated to generate over 3,000 jobs across construction phases and more than $170 million in income. Construction impacts are anticipated to have little ongoing effect after completion of the project," the Swain Center study said.
In an example of a non-quantified impact, the study says similar projects, such as North Hills in Raleigh and the South Park Mall upscaling in Charlotte, are associated with significant increases in residential property values in the immediate vicinity and surrounding areas.
Explaining the study's methodology, the Swain Center report says, "While there are options for modeling techniques, an input-output model is the traditional approach and the IMPLAN model and software is the industry standard. Input-output models are widely used and accepted but are far from perfect as the model relies on estimated data and approximations. Furthermore, input-output models are, by nature, static and a snapshot of the economy. Sizable projects that change the economic structure of an economy or supplier relationships are difficult to estimate as the model includes historical data and is not a dynamic model."
The study methodology section also explains that it "estimates the total economic impact, the sum of the direct, indirect, and induced effects, of The Avenue development project including construction as well as the impacts of incremental business activity from firms locating in the project and additional income of new residents. The estimated impacts are based on the 2015 county-level structure of the relationships between suppliers and service providers and consumption patterns of households."