Real Estate - Commercial

Developer Shares Update On Galleria Site Redevelopment Plan

By Cece Nunn, posted Nov 8, 2018
A rendering shows what Wrightsville Avenue could look like if it had the bike paths and attributes to be considered a complete street, according to State Street Companies (Rendering courtesy of State Street Companies)
Part of a redevelopment project on Wrightsville Avenue that's been in the works for nearly five years has been on hold as the developer works with the city on a plan to make roadway improvements that he sees as critical.

In 2014, the former Galleria shopping center property, purchased the previous year by Charlotte-based State Street Companies, was deannexed from the town of Wrightsville Beach and annexed into the city of Wilmington, which then assigned an urban mixed-use (UMX) zoning designation to the 12 acres.

Including the former Galleria site, State Street owns or controls about 30 acres between Wrightsville Avenue and Airlie Road with the aim of creating a mixed-use project that would include luxury homes, multifamily units, restaurants, coffee shop, wine bar, athletic performance training center, convenience retail, office space and a hotel, said Jeff Kentner, president and CEO of State Street Companies.

A significant portion of parking for the proposed development would be provided by structured parking decks hidden from view, Kentner said.

His firm is proceeding with development of part of the project, a 50-home luxury neighborhood called Airlie at Wrightsville Sound on 11 acres.

But an upscale hotel, for example, on part of a 19-acre portion of the firm's property wouldn't be possible, the developer said, without the transportation improvements Kentner is hoping for, which would involve making Wrightsville Avenue a complete street with bike lanes, pedestrian access and a traffic circle.

"We are currently engaged in dialogue with the city and are working with city leaders in a cooperative manner to try to find a way to implement a plan to construct the relatively minor transportation improvements to Wrightsville Avenue," Kentner said. "State Street has committed to make a significant financial contribution to the cost of the roadway improvements, and the NCDOT, which has also been participating in the discussions and supports the proposed transportation improvements, has offered to contribute meaningful funding."

He said the existing right-of-way is adequate to accommodate the improvements, getting rid of the need for the government agencies to acquire more property.

"Irrespective of our proposed mixed-use development, there is a consensus among all constituents that not having connected sidewalks and connected bike lanes on the gateway to Wrightsville Beach is a major shortcoming. Citizens deserve the right to walk or ride a bike to the beach," Kentner said.

Glenn Harbeck, director of planning, transportation and development for the city of Wilmington, said the ball is in the developer's court when it comes to moving forward with the potential street improvements.

"We received a draft development agreement back in the spring that spelled out all of the things the city needs to do relative to Wrightsville Avenue, but there were no commitments from Mr. Kentner to do anything in particular ... For City Council to approve that kind of multimillion-dollar expenditure, the City Council needs some kind of assurance that the Galleria development will proceed," Harbeck said.

After so many years, Kentner said, time is running out to do the kind of landmark development project State Street officials envision. It would be much easier, he said, for State Street to construct about 800 apartments on the 19 acres at issue and add a small retail component, but that wouldn't fit the vision. Still, he said he is optimistic that a compromise could be reached soon.

Kentner said that although the city floated the idea of State Street entering into a development agreement for the transportation improvements, "that would essentially constitute a rezoning of the property, which is not necessary and is not a process we can pursue. The city assigned UMX general district zoning to our property upon annexation so there’s no benefit to that process. The most efficient way to complete the road improvements and to allocate the various financial responsibilities is through a Roadway Improvement Agreement."

He said city officials and State Street have agreed that this approach merits consideration and that it's being pursued. 

"Hopefully all this gets worked out in December," Kentner said. "Otherwise, State Street is content proceeding with a less ambitious development that, although nice, would fall short of our vision and would be consistent with the typical development pattern in Wilmington."

At the same time, Kentner said if State Street's intent had been to develop a second-rate project, "it would have already been built."

He said the location of the property his company has assembled is perfect for the kind of development State Street wants to do.

"Successful mixed-use projects materialize when attractive and popular nearby destinations are located within walking distance or a short bike ride. Our site is fortunate in that regard as there is an abundance of appealing nearby destinations, including Wrightsville Beach, Airlie Gardens, Lumina Station, the Intercoastal Waterway, restaurants, shopping opportunities, grocery stores, a hardware store, and so on," Kentner said. "There is also a significant number of nearby rooftops to provide patronage to our development. Everything is in place for a successful development, except for the complete street."
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