A potentially transformative project coming to South College Road has taken a major step forward, with the possibility of a groundbreaking occurring by early 2021.
The redevelopment of the New Hanover County Government Center property, including the addition of an adjacent mixed-use project, is expected to add apartments, with some workforce housing, and office space along South College Road and Racine Drive.
The New Hanover County Board of Commissioners unanimously approved a development agreement
with developer Cape Fear FD Stonewater on Monday that is set to result in a $49 million county office complex and 911 and Emergency Operations Center on 7.5 acres. The anticipated private part of the development, on another 7.5 acres at the site, has an estimated value of $70 million.
The current government center is a former mall that dates back to 1989 and it's inefficient, said Brian Eckel, managing partner in Cape Fear FD Stonewater, in an email Tuesday.
"We are not only expanding the capabilities of the county’s emergency operations, but we are also adding much-needed greenspace and community gathering areas," Eckel said. "When combined with the surrounding private mixed use redevelopment, the Racine Corridor will soon generate significantly more tax revenue for the city and county, and will likely continue to spur other private investments.”
The county board approved the agreement for
the public-private partnership unanimously. But before the vote Monday, Commissioner Rob Zapple questioned the cost of the county leasing the new facility, a lease rate of $4.5 million a year, which equates to more than $90 million over 20 years for the triple net lease.
Lisa Wurtzbacher, the county's chief financial officer, said during a presentation Monday that ownership of the facilities would revert back to the county after 20 years and would result in additional revenues.
"We would no longer be making lease payments, but we would still be receiving tax revenues from the private development," Wurtzbacher explained.
The state's Local Government Commission has to approve the lease agreement, she said.
The county building and financing a new government center and emergency facilities on its own would be about $77.7 million, which is the approximate cost of the debt service the county would incur over 20 years, Wurtzbacher said.
The project would have an aggressive timeline, said Sara Warmuth, property management director for the county, with the possibility of a January 2021 groundbreaking on the county facilities and the county moving into its new digs by June 2022.
Zapple asked the developer about what could be included in the private part of the development because of the neighboring adult entertainment venue, Cheetah, at 143 S. College Road.
"I assure you, we won't have a gentlemen's club," Eckel responded Monday, referring to the new development and adding that he would go a step further and be willing to work with the county staff on a list of permitted uses and excluded uses in the private portion of the project.
From a commercial real estate standpoint, some expect the development to be a welcome addition to the area.
"It's a great example of county government leading from the front with regard to encouraging mixed-use even in suburban locations," said commercial real estate broker Hansen Matthews, of Maus, Warwick, Matthews & Co., who is not affiliated with the development team. "I'm excited. It's going to be a great project and makes a lot of sense for that site."
At least one neighboring commercial space could also be in for changes. Ten Pin Alley and Break Time Billiards, purchased by the Grago family
in 2015, might be adding space.
"We have plans to expand, but it's all preliminary right now," said James Grago on Tuesday. "It's in the architect's [LS3P's] hands right now."