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Real Estate - Commercial

Downtown, ILM And Military Cutoff Road: Developers Share Project Updates

By Staff Reports, posted Mar 2, 2023
Panelists at Thursday's Power Breakfast on major development projects in the area discussed their work at the Wilmington Convention Center.
Major development leaders shared updates Thursday on their Wilmington-area projects, from downtown transformations to projects underway near Wrightsville Beach.

For example, Wilmington Mayor Bill Saffo shared that the city’s purchase of properties in northern downtown has given the city “a seat at the table” to determine what that area’s transformation, dubbed the Gateway Project, could include.

The city is working with East West Partners, the same firm that served as Wilmington’s partner in a project to replace a defunct parking deck with the mixed-use building River Place.

“This [the Gateway Project] is going to be very similar to that … we will have a mixed-use development there that would involve housing or apartments or condos, would have some parking, would involve a hotel, would involve an office building, and it would also possibly involve a food hall with the concepts that we’re talking about currently that you may have seen in other communities,” Saffo said.

In addition to the gateway, the mayor discussed the city’s efforts to buy the 12-story former PPD headquarters/Thermo Fisher Scientific Inc. building on North Front Street during a sold-out Power Breakfast panel talk Thursday morning at the Wilmington Convention Center. (The full discussion can be viewed below)

In addition to Saffo, the panel included Brian Eckel, co-founder of Cape Fear Commercial and partner in Cape Fear Development; Andy Hewitt, partner in Soda Pop District development firm Parastream Development; Donna Girardot, chief strategy officer for CIL Capital and chair of the New Hanover County Planning Board; and developer David Swain of Swain & Associates.
 

Mixed-use on Military Cutoff

Swain’s Wilmington-based firm is working on Center Point, a 1 million-square-foot development on Military Cutoff and Eastwood roads. There, across from an entrance to the Landfall neighborhood and New Hanover County’s Northeast Branch library, grading recently started on the 23-acre site that is expected to hold apartments, retailers, parking structures and a hotel.

The N.C. Department of Transportation is using about 3 acres for the extension of Drysdale Drive and an eventual overpass to address traffic at that intersection.

Center Point’s plan has changed since Swain initially talked about it at a Power Breakfast three years ago.

“It is morphing,” he said. “The world has started to change, specifically related to office buildings.”

It will take about a year to install infrastructure for the project’s first phase, 6.5 acres that will include a 75-foot-high apartment complex with 351 Class A residential units, first-floor retail, and restaurant space and parking.

Plans call for four buildings fronting Military Cutoff Road to include more than 30,000 square feet of retail and restaurant space, Swain said.

An office building, another 135,000 square feet of retail and a hotel – the brand for which has not yet been identified – is planned for future phases, he said.
 

Redevelopment


Sharing details about one of his development projects, Eckel and his firm are working with New Hanover County in a public-private partnership, having completed a new 130,000-square-foot government center building that county employees are currently moving into, Eckel said.

"They've been in the old Marketplace Mall for the last 20 years, which served its purpose," Eckel said of the government complex off South College Road and Racine Drive.

The theme for the government center portion of the redevelopment project "was resiliency and efficiency. They're coming from an extremely inefficient building. So we wanted to create a new home for them that was extremely efficient. We did that," he said.

As part of the private portion of the development, Eckel's company plans to build a mixed-use development with 250 apartments on top of retail space.

Eckel is also looking at reviving Project Grace, a redevelopment idea that would transform a county-owned block in downtown Wilmington into structures with a new main branch of the library, new Cape Fear Museum, apartments and commercial space.

"There's no formal commitment from the county or from us to actually pursue Project Grace. We started working on this project looking at the due diligence and digging in in November on our own time and resources to see if it's a project that that we want to pursue," Eckel said. "We've done a lot of community engagement, and the more feedback that we've heard from the community the more we're excited about possibly, potentially being a part of the project."
 

Adaptive reuse


Hewitt talked to the Power Breakfast audience about another transformation, this one in the Soda Pop District in downtown Wilmington. He explained to the crowd that the district can be loosely described as running from 7th to 12th streets between Market and Chestnut with Princess Street acting as the main commercial corridor. A major piece of the district is the former Coca-Cola bottling facility, which Hewitt’s company has turned into an adaptive reuse project after buying the building and other properties in the district.

Parastream Development has filled 88% of its adapted space, Hewitt said.

"Since 2020, we've welcomed 16 new businesses just in our project in the Soda Pop District, not including other people's properties that they're working on," he said.

He said the next steps for Parastream include constructing new buildings on parcels they also own in the district “based on what the demand is.”
 

Pharma facilities

 
The New Hanover County Airport Authority voted Wednesday to let CIL Capital lease another parcel on the airport’s property, Girardot told the audience. CIL is building and planning industrial facilities at the Wilmington International Airport (ILM) Business Park.

“What we’re looking at having on the ground within the next 18 months is $250 million worth of investment, four buildings, four parcels and 1.5 million square feet under roof,” Girardot said. “So that is pretty aggressive and but we’re moving forward with the times as fast as we can.”

She said the first building will be used to for cold storage of pharmaceuticals and CIL is working with “some of the world's largest, the nation's largest, pharmaceutical companies … to provide cold storage for their pharmaceuticals. In fact, when I say cold storage, we're talking maybe minus 86 degrees Celsius. So that’s pretty cold.”

The second building will be used to service the Research Triangle Park area of the state and will create a direct route directly to the coast for them for shipping and flexibility and timeliness,” Girardot said.

She said officials are “very excited to keep this industry in the state and to keep the tax money in the state” by being able to use the new facilities.
 

Speaking of the office


Saffo updated a recent proposal to buy Thermo Fisher’s downtown Wilmington building for $68 million.

“We are working with Thermo Fisher and evaluating that building for the city. The city has been talking about space assessment needs for over 20 years,” Saffo said, adding that the 12-story building checks “a lot of boxes” for the city from consolidating office space to adding parking capacity with Thermo Fisher’s adjacent garage.

Saffo said the city has until mid-June to evaluate the building under due diligence.

He said that city officials are fielding questions about the idea from city councilmembers and residents. Initial plans called for the city to occupy up to six floors of the 12-floor building and for Thermo Fisher to lease back up to three floors. That would leave at least a few floors available to be leased at a market rate.

“We’re doing a thorough evaluation before we make a determination whether this is the right thing for our community,” Saffo said.

Eckel said the move could open up other opportunities for other redevelopment projects and possibly a grocery store, which has long been discussed as a need for downtown.

 
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