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Salvation Army asks Wilmington for $1.3 million for road to new campus, but funding is likely to be complicated

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Salvation Army
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City of Wilmington
Overhead view of the Salvation Army's requested road -- and a competing project nearby.

The Salvation Army is asking the City of Wilmington — which is flush with federal funding from the American Rescue Plan act — to help it pay for a road for its new campus off of Martin Luther King, Jr. Parkway. But the ask is more complicated than it might seem, and is far from a sure thing.

Bruce McGuire, who is a member of the advisory board of The Salvation Army of Cape Fear, gave a presentation to Wilmington City Council at their agenda briefing meeting on Monday, September 20. He asked council to consider giving the non-profit $1.3 million from federal American Rescue Plan funds to build a road that would connect North 30th Street to Kornegay Avenue on the site of their new facility next to the Creekwood subdivisions and Martin Luther King Jr. Parkway.

On the new campus, The Salvation Army of Cape Fear is planning to build a shelter, community center, multi-purpose athletic field, gymnasium, and classrooms where community services are provided.

Major Ken Morris, a corps officer for The Salvation Army, said the organization has already invested close to $1.5 million into the project and has raised over $5.1 million towards the total $13 million cost. Morris said their overarching policy is that no money can come from the corporate office for building projects, so it all has “to be raised locally,” hence, the ask for the city to build the road.

But new City Manager Tony Caudle told McGuire, Morris, and council members that they cannot take funding from ARP funds to build roads. However, according to city Finance Director Jennifer Maready, an argument could be made that the city could calculate their revenue losses during the pandemic to prove that they can’t pay for the road without using those funds: “So since the city is able to build roads, we could use some of that calculated revenue loss to build the road, so they would have to dedicate the property to the city, and then we could build it.”

Mayor Pro Tem Margaret Haynes said, “I’m supportive of them being out there, but I’m just concerned about our twisting ourselves into a pretzel to find a way to use ARP funds, for building a road, which really doesn’t have anything to do with Covid.”

In addition, Caudle said he questioned the $1.3 million estimate from The Salvation Army, and that the city’s lawyers would have to look at the estimate before he could give council a recommendation on the project.

Complicating matters further, the city might be on the hook for improvements to a nearby road, one that would connect North 23rd Street and North 26th Street to Kornegay Avenue, now that the North Carolina Department of Transportation has updated its estimates for the Scientific Drive extension project, which now looks to cost $10 million — roughly double the original $5 million dollar estimate.

According to Mike Kozlosky, the director of the Wilmington Metropolitan Planning Organization, DOT has agreed only to pay $2.5 million for the road, so then the city would be stuck paying $7.5 million for it, upping the city’s financial commitments to roadways in that area. Kozlosky also said there could be “an opportunity to potentially go back and renegotiate the contract with them [DOT].”

Caudle told the council, that “if the cost will be $10 plus million, and we are going to be responsible for $7 plus million, then we will be back in front of you to tell you that’s the case, and we will tell you what your options are to either get out of the contract or to move forward with it.”

Caudle said that if the council decides to take on the building of the road, which would then become a city road, for the Salvation Army project, then he suggested that the city cap the funding at $1.3 million, or the city could just build the road and absorb the cost regardless. He also noted that this would be an additional project for their capital projects division to absorb.

Another wrinkle is the Salvation Army’s plan to generate funding by selling some of its land. Morris noted that the Salvation Army doesn’t need the full 22-acre site it currently owns, and could potentially sell some of the parcels to Eden Village developers and to other non-profit organizations so that they could provide additional community services at that location.

Mayor Bill Saffo asked Caudle, “This is all predicated on the Salvation Army selling their property. Do we put in the infrastructure first waiting for them to do that? The starts and the stops on this thing are based on the fact that the Salvation Army needs to sell their property for us to make the commitment to go and start with the project. Is that correct?”

Caudle replied, “I would say so, but you need to speak with them,” adding that the issue is the city needs to know whether or not the Salvation Army is going ahead with the land sale.