The New Hanover County Board of Commissioners unanimously approved an amended agreement capping the developer's construction cost of a downtown Wilmington redevelopment project at about $56 million. But the next step involves convincing a state panel that the proposed financing makes sense.
The project, referred to as Project Grace, is expected to transform the county-owned block bordered by Chestnut, Grace, Second and North Third streets, which contains the main branch of the public library along with a parking deck and other structures. This transformation could include residential and commercial space along with a new, 95,000-square-foot facility housing the Cape Fear Museum and the new library main branch.
Monday's vote amends the development agreement
approved in May between the county and Wilmington-based firm Cape Fear Development (CFD).
“We are fired up about this project and we are ready to go," said Mike Brown, of CFD, speaking to commissioners before the Monday vote.
He said the development team, working with county officials, identified 27 areas of opportunity to eliminate unneeded costs and make the plans more clear while not compromising customer experience. This effort resulted in about $4.6 million in savings, officials said.
That might not be enough to get the vote of State Treasurer Dale Folwell, who is chairman of the Local Government Commission and a Republican gubernatorial candidate. The nine-member LGC has to sign off on the county issuing debt to pay for Project Grace.
A previous Project Grace plan was halted when the LGC failed to approve the financing arrangement the county inked with its previous development firm partner on the project, Zimmer Development Co.
"Since the Local Government Commission [LGC] was established more than 90 years ago after the bankruptcy of Asheville, we as a government unit are supposed to ask the tough questions to protect taxpayers," Folwell said in an emailed statement Tuesday afternoon. "Project Grace is no exception, especially considering [its] troubled past. Asking tough questions and challenging assumptions could result in the county saving money for city and county taxpayers by utilizing the low rent, free parking, and two bottom floors of the PPD/Thermo Fisher building. The county has hundreds of millions in the bank and is not required to borrow through the LGC for this project."
Folwell referred to the former PPD headquarters campus, with its 12-story building, that was recently purchased by the city of Wilmington. The city plans to use about five floors of the building for city offices while leasing out two (floors five and six) to PPD-owner Thermo Fisher Scientific Inc. and the other five to tenants at market rate. The county was not involved in the Thermo Fisher transaction.
Eric Credle, chief financial officer for New Hanover County, said Monday no tax increase is required to pay off the debt incurred by the funds set aside for Project Grace.
Mentioning the need to put the policy statement on record because of the county's application to the LGC, County Manager Chris Coudriet echoed Caudle's remark, saying, "At no point with this debt issuance or anything to come, unless it becomes a voter-approved debt, will this administration ever ask for a tax increase as it's related to debt."
The development agreement with CFD also guarantees at least $30 million of private development on the block once the county facility is complete, county officials have said.
Although the amendment outlines the savings on the construction end, additional funding will be required to complete the library and museum.
Sara Warmuth, the county's chief facilities officer, reminded commissioners on Monday that the $56 million cap "does not include direct purchases made directly by the county in the project for FF&E [furniture, fixtures and equipment] and exhibits. Those will be financed separately as we did with the Government Center Project."
According to an email from the treasurer's office Tuesday, the agenda for the September LGC meeting has not yet been set.