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Local

Downtown redevelopment 'Project Grace' re-emerges for public consideration

nhc_downtown_block_development_-_project_grace.png
New Hanover County
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The county-owned block on Chestnut Street in downtown Wilmington.

First introduced in 2017, Project Grace is New Hanover County’s plan to redevelop the downtown Wilmington block that’s currently home to the county-owned library and parking deck. The public-private project met some resistance several years ago, but now it’s back.

The original plans for Project Grace included an option that called for a 12-story development, along with new space for the downtown library and the Cape Fear Museum. After years of evolving designs, the library and the museum are back on the table, but the private side of the development remains uncertain. 

County Manager Chris Coudriet explains the Memorandum of Understanding -- or MOU -- with the Zimmer Development Company, is just a first step.

“And so the MOU, as it's constructed now does contemplate the museum and the library and private development back on the block -- so it's kind of where we started. But the visuals and the site design the elevations that the community saw a couple of years ago, that's not the project today.”

The MOU, while not required, helps establish some groundwork for the project. Because it lays out what the county and developer might do, and at what cost, the county’s legal team considered it a development agreement -- but it doesn’t lay out fully what the whole project will look like. That will have to wait for a future agreement, which commissioners will have to approve -- a process that could take roughly a year.

The MOU does require the developer to make at least 5 percent of its housing units affordable, under the county’s working definition.

It also says what the county will get in the public-private deal in terms of square footage for the museum and library. Jennifer Rigby, the county’s chief strategy officer, says those numbers are still being refined.

“And so those square footages came from a space named analysis that was done a year ago really to inform the original request for proposal. And so the library sat at about 38,000 square feet. And then the museum sat at about 35,000 square feet based on that space needs analysis. And so the development team refined that, as Chris mentioned, there is a new design team. And so, you know, we would go through a process to even further refine it.”

And what would the county pay for the new space? While the museum and library construction are expected to run around $56.7 million, the county would pay $90 million --- paid in $4.5 million annual rent over two decades, according to county Chief Financial Officer Lisa Wurtzbacher.

“The way it is currently written up would be a 20-year lease, with the county taking ownership of it at the end of the lease.”

It’s worth noting that this is the same rent-to-own structure originally proposed for the redevelopment of the county government center. [Note: In both deals, the difference between construction cost and the county's total payments would be, in large part, the cost of financing borne by the developer instead of the county.] The state nixed that deal, telling the county it would overpay by roughly $20 million compared to financing the redevelopment through the bond market, where the interest rates have recently dropped.

County Manager Coudriet said the project will require approval from the Local Government Commission, part of the state’s treasury department. Coudriet said the LGC may very well suggest alternative financing, but that will depend on the bond interest rates.

In a lot of ways, there’s still a lot that could change. The next step will be approval of the MOU by county commissioners -- that’s currently slated to follow a public hearing on March 15. There will be other public forums on Project Grace as well, including one hosted by Wilmington Downtown Incorporated next week.

 

Links:

NHC and Zimmer Development ... by Ben Schachtman