Print
Real Estate - Commercial

Will $500M Development Across The River Sink Or Swim?

By Cece Nunn, posted Oct 15, 2021
A local group hopes to develop 8 acres on Point Peter (shown above) across the river from downtown Wilmington. (Photo by Michael Cline Spencer)
Building a major riverfront development of any kind in the Wilmington area means facing a raft of challenges, from environmental issues to making the numbers work.
 
A group of local partners that has never tackled such a development before wants to create a $500 million mixed-use project, with condos, apartments and commercial space, on 8 acres at a fork of the Northeast Cape Fear and Cape Fear rivers.
 
The site, on an arrow of land known as Point Peter, is currently zoned for an industrial use and dotted with abandoned tools, cars and machinery across the water from downtown Wilmington’s northern riverfront.
 
The partnership planning the development, Wilmington-based KFJ Development Group, includes Kirk Pugh of KBT Realty; Jim Lea III of Lea/Schultz Law; and KFJ’s technical director Frank Pasquale.

Frank Pasquale (from left) and Kirk Pugh are part of KFJ Development, a local group working on a proposal across from downtown Wilmington. (Photo by Michael Cline Spencer)Pasquale said his development experience includes being involved in Candela Lofts, a 10-unit condominium project at 1024 Adams St. in Hoboken, New Jersey, and a 44-story building developed about 18 years ago on 49th Street in Manhattan, although after numerous requests, he did not supply the exact address of the skyscraper as of press time.
 
KFJ has the Point Peter property under contract, with plans to close on the sale in December, Pugh said.
 
“We believe in the project. We believe it’s something good for New Hanover County, and we have a strong determination to see it through,” Pugh said.
 
KFJ wants the ability to build towers up to about 240 feet (The PPD headquarters on the other side of the water is about 193 feet) on the property. That could equate to about 24 stories, with three or four levels of parking and 20 levels of inhabited space, Pugh said.
 
So far, KFJ’s idea, referred to as “Battleship Point,” has been turned into conceptual renderings by a Wilmington architect and was the subject of a community meeting in September.
 
But Battleship Point has a long way to go before it gets close to landing. Some professionals in the local real estate industry have been asking whether such a project is possible at all, and if so, who’s going to pay for it?
 

SCOPE AND SCALE

Battleship Point would be one of the most expensive single projects ever to be built in the region and has drawn comparisons to another major riverside landmark – River Place, a nearly $90 million mixed-use development on Water Street.

East West Partners, the developer along with the city of Wilmington of River Place, announced in 2018 that it had received a $35 million loan from Florida-based Trez Forman Capital Group for River Place’s construction. The city kicked in over $25 million for the project’s parking deck.
 
River Place, which includes apartments, condos and commercial space, had its own construction challenges as a result of its position near the riverfront, along with defects later discovered in residential units. The remediation process that resulted from those defects is now complete, according to East West president and founder Roger Perry.
 
While River Place has 92 condos and 79 apartments, along with 31,400 square feet of retail, the Battleship Point proposal calls for around 540 condos, 330 apartments, nearly 200,000 square feet of commercial space and a 76,000-squarefoot luxury hotel.

East West has no involvement in KFJ or the Battleship Point proposal. But Perry, whose company is also working on the initial phases of a northern gateway redevelopment with the city of Wilmington, said it’s hard to predict whether something like Battleship Point could succeed “because nobody’s tried to do something at that scale.”
 
Perry said, “That would be a project of a scope and a scale and a location that I would definitely feel unqualified to tackle.”
 
Attracting debt and equity, Perry said, would be difficult.
 
But the KFJ partners said in their community meeting and in interviews that they don’t think financing will be a problem for Battleship Point.
 
“We’ve been getting calls nonstop,” Pasquale said. “I know quite a few people back in the New York area, and there are a couple of big developers out of North Carolina that have reached out.
 
“Everybody wants to get in early but right now my story to them, to you and to the public is the same: We’re not opening any doors to anybody until we know that we have a project. Right now, we have a great concept, a phenomenal idea, something I think will really change the complexion of Wilmington for decades to come.”

NEW ZONE, RULES

One of the steps for Battleship Point is a rezoning of the property from an industrial designation to one that would allow all of the elements the KFJ partners are proposing.
 
KFJ has been planning to seek a change to Planned Development zoning for the property, but some PD district guidelines limit the height and require more land. As a result, KFJ is also expected to seek a text amendment to allow a new zoning district that blend elements from the riverfront mixed-use zone with some urban mixed use zoning requirements, said Rebekah Roth, planning and land use director for New Hanover County.
 
Roth said, “It will create a situation where you have some of the same riverfront features that have been anticipated for the west bank of the river along with a potentially more urban development style.”
 
As of press time, more information about the potential text amendment was forthcoming.
 
The text amendment and rezoning request could come before the New Hanover County Planning Board as early as November, Roth said.
 
New Hanover officials who are key to whether the project gets the necessary approvals are aware of the proposal.
 
“I’ve been watching this project with interest because … we’ve reviewed a couple of projects across the river in the past that have not come to fruition. And the site does have its challenges,” said Donna Girardot, chairwoman of the county planning board. “However, I will have a better understanding of this request when we get the planning board package with this project outlined with regard to environmental factors, density, setbacks, buffers, heights, ingress/egress, etc., etc. And I always withhold an opinion until I hear the presentation from the applicant and any members of the public in attendance whether in support or opposition. I learn so much from that process. Perhaps there may be something important that was not included in the board package itself.”
 
Jonathan Barfield, a New Hanover County commissioner, said, “I think it will be a pretty phenomenal project if they’re able to pull it off. I’ve often wondered what it would be like to have that side of the river developed and it puts me in the mindset of downtown Savannah.”
 
But change is always hard, the KFJ partners said.
 
“Whenever you do something different, outside the norm, you always stand the chance of not getting approved,” Pasquale said.
 

EYES ON THE PRIZE

The 8 acres at the point that KFJ plans to buy has been on the market for 13 years, Pugh said.
 
Pugh, who has been in the residential real estate business for 18 years, started KBT Realty in 2015. KBT has launched KBT Commercial to broaden its services to clients and lead efforts for Battleship Point, Pugh said. Shawn Roberts, who recently relocated from Fort Lauderdale, Florida, will head KBT Commercial.
 
As downtown Wilmington has prospered, said Wilmington Mayor Bill Saffo, the undeveloped side of the river has drawn more interest.
 
Ideas for Point Peter have included a baseball stadium and apartments in the past. “Personally, I would love to see a natural setting on that side of the river,” Saffo said.
 
But he said he knows property owners have the right to do what they want with their property, subject to regulations. And the city would benefit from the industrial garbage being removed.
 
“As the mayor of the city I would love to see it cleaned up,” he said of Point Peter. “It’s right across from our brand new park; it’s across from the convention center; it’s across from our Riverwalk. There’s a lot of development taking place of course on the north end. ... I would love to see that side of the river cleaned up and improved as opposed to what exists there today. How somebody gets there, I don’t know.”
 
The environmental issues will be extensive.
 
“My experience has been – down on the river over a number of years with a number of projects that the city has either been involved with, or private developments taking place down there – that most everything along our riverfront has got some contamination on it from years ago,” when there were not the environmental regulations that are in place today, Saffo said.
 
The KFJ partners want to seek a brownfield agreement with the state as part of their plan to clean up the site. They said they’ve worked with Kersting Architecture on making a development that is focused on “intelligent environmental and ecological restoration.”
 
Pasquale said the group has also been working on agreements related to infrastructure, including water and sewer service, with entities such as the N.C. Department of Transportation and Cape Fear Public Utility Authority. But an expensive environmental cleanup will be one of the first tasks.
 
“If it was easy,” Pasquale said, “somebody would have done it already.”
Pictured above: Frank Pasquale (from left) and Kirk Pugh are part of KFJ Development, a local group working on the Battleship Point proposal across the water from downtown Wilmington. (Photo by Michael Cline Spencer)
Ico insights

INSIGHTS

SPONSORS' CONTENT
Web mcwhorter 0012

Insight Article: Painting The Town -- Blue

Heather McWhorter - UNCW Center for Innovation and Entrepreneurship
Kellyerola headshot lcflc

10 Tips To Help Cope With Grief And Isolation At The Holidays

Kelly Erola - Lower Cape Fear LifeCare
Jasonpathfinder3

Your Retirement Portfolio: Simplicity Is Your Friend

Jason Wheeler - Pathfinder Wealth Consulting

Trending News

Customers Bank Enters Wilmington Market

Jenny Callison - Nov 29, 2021

Plans For Live Oak Bank's Small Business Center, Channel, Progress

Cece Nunn - Nov 30, 2021

At An Impasse, Bald Head Island Transportation Authority Seeks Guidance

Johanna F. Still - Nov 29, 2021

Despite $283M Boost From State, Rest Of Port Project Still In Limbo

Johanna F. Still - Nov 30, 2021

LS3P Wins Multiple Design Awards

Staff Reports - Nov 29, 2021

In The Current Issue

Is A Rural Business Wave Afoot?

New businesses are forming in Southeastern North Carolina’s rural counties at a dramatic and unprecedented rate....


Building Safety Solutions

Merging his software engineering skills and his entrepreneurial spirit, Cecil Worsley IV created Wreckingball Systems, a young software comp...


Kiln Industry Fires Up Burgaw Firm

The company, which sells heat-treating kilns for wooden pallets, firewood and lumber, has a staff of 50 and annual sales of $11 million to $...

Book On Business

The 2021 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Trying to Grow a Business?
2020 Health Care Heroes
2020 WilmingtonBiz 100