Real Estate - Commercial

Project Grace 2.0? Real Estate And Development Firm Evaluates Potential Role

By Cece Nunn, posted Dec 12, 2022
Officials want to see a redevelopment of the downtown Wilmington block that includes the main branch of the New Hanover County Public Library. (File photo)

A Wilmington-based commercial real estate and development firm is looking into the possibility of working with New Hanover County on Project Grace, a proposal that would redevelop a county-owned block in downtown Wilmington.

Cape Fear Commercial is evaluating what its role might be in Project Grace, an initiative that would transform the 3-acre block bordered by Grace, Third, Chestnut and Second streets with at least a new main branch of the county library and new Cape Fear Museum, if not additional private development.

A previous deal in the works for Project Grace with Wilmington-based Zimmer Development Co. came to a halt when the state’s Local Government Commission failed to approve an $80 million lease agreement the county was pursuing with Zimmer. In addition to the public facilities, Zimmer planned to build residential and commercial space.

After the LGC denial, county officials said they intended to proceed with replacing the library and relocating the museum from its existing facility on Market Street. The New Hanover County Board of Commissioners voted in November to buy the plans from Zimmer Development for $2.5 million, an amount agreed upon before the LGC outcome.

"In the coming months, the county will continue to work on this project but does not expect construction to begin right away on the new facility," a county news release stated.

Brian Eckel, cofounder of Cape Fear Commercial, which has a development division, said in an email Monday that his firm has no formal agreement with New Hanover County on Project Grace "at this point." CFC has already been working with the county on a different major project – the redevelopment of its aging Government Center Complex and property. 

"The county has asked us to take a look at [Project Grace] and explore our options, and we agreed. There’s a lot of work to be done on evaluating this opportunity, and neither side is committed to each other at this point," Eckel explained in the email. "The timing works well for us as we just held the building dedication for the county Government Center and are finalizing punch list items now as the county prepares to move into their new facility. New Hanover County has been incredible to work with during previous projects, so we were honored to be asked to evaluate Project Grace."

Assistant County Manager Lisa Wurtzbacher said in an email Monday that, as noted in the commissioners' meeting in November, Cape Fear Commercial expressed interest in the project "and county staff has been in discussions with them to determine if the county will be able to partner together on the downtown block. Currently, Cape Fear Commercial is reviewing the design and construction plans for the library and museum facility so their team can understand the full scope of this public project and identify potential value engineering opportunities.

"They will also be determining what they are willing to commit to developing on the private side. We don’t have an updated timeline to share at this point."

Wurtzbacher said the county has reached out to the Local Government Commission in advance, "to let them know that we are in discussions with the developer, and will continue to keep them in the loop once we have definitive points to share. However, the actual approval by the LGC will only occur with the issuance of financing for the public portion of the project."

Eckel said he sees Project Grace as an opportunity to create a new cultural center and gathering place in the center of historic downtown.

"It’s a chance to uplift a block of land that deserves respect and investment, and on a higher level, it’s a step toward unlocking Wilmington’s potential as one of the greatest destinations in the southeast," he said.

Eckel said the project could become "a keystone" for downtown Wilmington.

"We’re lifelong residents of Wilmington, so we see this as an opportunity to step up and help create a keystone for downtown that will be embraced by the community," he said. "Given our experience, we believe we could execute this development with precision, and we’re excited to try to help make Project Grace finally become a reality."

But how would Eckel's firm overcome potential LGC objections? It's something CFC faced during the Government Center redevelopment planning process.

"If we were to pursue [Project Grace] further, we would structure a deal that is advantageous for the citizens of New Hanover County. It would be similar to the Government Center redevelopment, whereby the public portion was financed by NHC taking advantage of their excellent bond rating and was approved by the LGC," Eckel said. "We listened carefully to the feedback and concerns from Treasurer [Dale] Folwell and the LGC during the Project Grace deliberations, and we’re committed to putting forth a deal that provides the best possible outcome for the taxpayer with complete transparency."

Eckel said his firm is looking at the now county-owned plans architecture firm LS3P created for Zimmer Development.

"We have tremendous respect for Zimmer and LS3P. In this inflationary market, costs have risen during the time that Project Grace has been in formulation," Eckel said in the email. "We’re now studying the LS3P plans with the design team, looking at how we may creatively value engineer the plans into a budget that works for our community and delivers a lasting product. The outcome here will be a deal that puts the taxpayer first while making sure the end result is one that citizens will be proud of."

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