The Wilmington City Council will consider a $1.7 million bid on Tuesday for the site of a former city office building that could see the development of a downtown grocery store. 

The city received the $1.7 million bid for surplus property at 305, 315 and 319 Chestnut St., the site of a former office building currently under demolition, from Cape Fear Holdings, LLC. A provision included in the bid by Cape Fear Holdings, LLC, “would restrict the principal use of the property to a retail grocery supermarket for a duration of at least 10 years,” according to the city council’s agenda.

According to North Carolina Secretary of State records, Cape Fear Holdings, LLC was formed in September and is registered to Calvin Wells at the Wilmington address of Cape Fear Commercial and Cape Fear Development.

City documents do not name the grocery store proposed for the downtown site. Cape Fear Development, however, lists on its website several Publix grocery stores among its projects in the Wilmington area, including the Publix at Pine Valley and Carolina Beach’s Publix Commons at Federal Point, and in other North Carolina cities, including in Kill Devil Hills, Wendell and High Point.

Cape Fear Development is also the developer of Project Grace, New Hanover County's redevelopment of its downtown library branch and the Cape Fear Museum located across the street from the 305 Chestnut St. site.

City leaders declared the 1.65 acres of downtown land surplus property last year, following the city’s $68 million acquisition of the former Thermo Fisher Scientific campus at 929 N. Front St. 

Demolition of the site’s longtime office building began in mid-November. City leaders decided to demolish the buildings based on a market analysis that showed “no interest in reusing the existing structure, which is old and would require substantial repair,” a city spokesperson told the Business Journal earlier this year.

The site at 305 Chestnut St. was home to two office buildings connected by a breezeway. The two-story building nearest North Third Street was constructed in 1959 and formerly operated as a bank. City leaders acquired the property in 1997 for $4.5 million, according to property records.

The Wilmington City Council will consider a resolution to authorize the upset bid process for the three surplus tracts at its regular meeting on Tuesday. If approved, a public notice of the bid is expected to be published in a newspaper of general circulation, as required by state statute, on Dec. 9. Any upset bid would need to be submitted within 10 days or by 3 p.m. on Dec. 19.

A qualifying upset bid must raise the existing offer by at least 10% of the first $1,000 of the current offer and 5% of the remainder of the offer. A deposit of 5% of the new bid amount must accompany the upset bid.

If no other qualifying offer is received during the upset bid period, the offer from Cape Fear Holdings, LLC would be accepted. Proceeds from the upset bid will be used to allow the city to pay back a portion of the variable interest and taxable debt raised to support the acquisition of its new campus, according to the city council’s agenda.