A ruling from the N.C. Superior Court lays the foundation for construction of Wilmington’s convention center hotel, according to a news release Friday from city officials.
The City of Wilmington announced in the release it had just received word that Judge Paul L. Jones ruled in the city’s favor regarding a challenge about the city’s conformance with a 2006 legal agreement that outlined how the convention center hotel could be built.
That agreement ended an earlier legal skirmish about the city’s right to award a contract for construction of a convention center hotel.
In February, Wilmington City Council approved an agreement with Harmony Hospitality Inc., to purchase land and construct a 186-room, full-service Embassy Suites Hotel next to the Wilmington Convention Center. The $33.6 million hotel would include a full-service restaurant, bar, pool and additional meeting space.
As the Business Journal has previously reported, a key point of the lawsuit – brought by local taxpayer Glenn Wells and Sotherly Hotels, which owns the Hilton Wilmington Riverside – is the plaintiffs’ contention that the city is wrongfully “subsidizing” the convention hotel by selling the land to developer Harmony Hospitality at a below-market rate of about $579,000.
The .76-acre riverfront site has been appraised for about $740,000 more than that, according to city documents.
Wells and Sotherly Hotels also
contested the city’s agreement to allot the new convention center hotel 250 reserved spaces in the city’s parking deck.
A key element in Jones’ ruling affirms the city’s contention that the hotel was an integral part of the convention center plans from the beginning.
“Section (c) of the [2006] Consent Judgment does not place restrictions on the sale of the land for the hotel because the 'Hotel' was defined as planned to be constructed in conjunction with the Convention Center and an adjacent parking facility,” Jones wrote in his decision.
He also ruled, “Wilmington is required to set the fair market value of real property to be conveyed. Wilmington thus had the authority to set that value at $578,820.”
Jones addressed the parking space agreement specifically in another part of his ruling, writing, “The Garage parking License Agreement complies with . . . the Consent Judgment . . . This License Agreement also does not subsidize and underwrite the planned hotel, given the escalating rates to be charged during its 30-year term.”
“We are very pleased with the judge’s ruling because it validates what we have said all along. The city has been, and will continue to be, in full compliance the 2006 consent decree,” Wilmington mayor Bill Saffo said in the news release. "We look forward to moving as quickly as possible so that we can begin to realize the economic benefits of this important project.”
City officials have touted the expected economic benefits of having a full-service hotel adjoining the convention center. Those benefits, according to Friday’s news release, include an estimated $6.4 million in property and sales tax revenues over the next 10 years, 346 hotel construction jobs and the creation of 207 jobs when the hotel is completed.
"We are thrilled to be having such close neighbors," said Connie Majure-Rhett, president and CEO of the Wilmington Chamber of Commerce, whose offices are located next door to the convention parking garage. "Developing a convention center hotel has been a long-term project for the chamber. I know it will be an incredible addition to the economy and to the success of the convention center."
Majure-Rhett, who was on the task force for the convention center, said that her group heard repeatedly that having a hotel connected to a convention center was essential to the center's success.
"There will be more business coming to the convention center as a result of having the hotel," she said.
Since February, Harmony has continued to work on completing the final hotel design and easement acquisitions and expects to begin construction late this summer, the release stated. Construction is expected to be completed by early 2016.
