New Hanover County officials defended Project Grace again Tuesday before the state Local Government Commission during a meeting in Raleigh where LGC members and the state treasurer indicated they expect to vote on the matter at the panel’s October session.
New Hanover County and private firm Cape Fear Development have been working on the latest iteration of Project Grace, a plan that would transform the county-owned downtown Wilmington block bordered by Chestnut, Grace, Second and North Third streets into a modern development. The transformation would include a $56 million, 95,000-square-foot facility that would house both a new library and Cape Fear Museum, along with private development that could hold commercial and residential space.
State Treasurer Dale Folwell and county officials had been going back and forth in news releases and reports over whether New Hanover County’s financing plan for Project Grace, which has to be approved by the Folwell-chaired LGC, would be included on the agenda for Tuesday’s meeting. Instead, the LGC discussed and asked questions about the project, with Folwell stating, “It will be a voting item in October.”
New Hanover County Commissioner Dane Scalise, who is also an attorney, emphasized the idea that the pursuit of Project Grace has had bipartisan support from the current and previous county boards.
“We have a concept that is going to, in combination with this public private partnership, put a vibrant museum on one portion and have this new developer spend at least $30 million on new buildings that are going to go on the tax rolls, that are going to increase the value of nearby buildings, nearby businesses, give a new place for families who are coming to Wilmington to either visit or who live there to come and spend time,” Scalise said. “We think that this is the right policy decision for New Hanover County.”
LGC member Paul Butler Jr. wondered aloud why the county won't simply use some of the its cash on hand, including money from the sale of New Hanover Regional Medical Center to Novant Health, for Project Grace. In response, New Hanover County Manager Chris Coudriet said issuing debt makes more sense.
“The board has considered every way possible on this and has made the determination that because of its credit rating, because of its ability to meet its debt obligations, it is in the best interest of our community to issue debt. We have the good fortune of having a robust and healthy fund balance," Coudriet said. "We also have escrows that were set aside as part of our partnership with Novant. However, we are earning more interest on our escrows and our fund balance and so if we were to use the existing revenue on hand, we would actually end up losing money in the long-term because our credit rating is so good."
He pointed to a recent example of 3.8% interest on an existing debt versus 5% in basic interest earnings for the county that is coming “without any aggressive investment decisions at this point.”
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