Plans for Project Grace include a new library and a new home for the Cape Fear Museum. If approved, an updated agreement with the Zimmer Development Company, would reorganize and increase the square footage.
In addition, the county would take over directly funding exhibit space, directly providing about $7.5 million. According to the county, this will streamline the development of the exhibit space without impacting the project timeline.
Meanwhile, Zimmer is promising an additional $7 million in private investment. The county said it couldn't confirm what that investment would look like, but noted that there had been conversations with hotel companies.
The public-private partnership, or P3, is effectively a lease-to-own program for the county, and would cost millions of dollars more than if the county self-financed the library and museum. But, without the lease deal, county officials have argued that Zimmer might walk away from the deal.
Jennifer Rigby, the county’s chief strategy officer, said the benefits of a P3 were important to consider.
“The benefit of the P3 is that we can guarantee the private investment is through a memorandum of understanding and so for the county to go at it alone, without a P3, we would not be able to have any tax revenue that we could guarantee as a part of the project," she said.
At one point in the project, the estimated cost of the lease-to-own deal was$24 million more than a self-financed county-build library and museum. That differential is now closer to $13 million dollars.
"As for the price New Hanover County is paying Zimmer vs. the actual cost of the project – over 20 years, New Hanover County will pay Zimmer $80,060,000 in lease payments and then have full ownership of the museum and library with no further payments. The estimated cost of the project at this time (without bids being finalized, this is just an approximate cost) is $66.8 million," according to the county.
County staff plan on presenting those figures, and other details, during the commissioners' Monday morning meeting on June 20.
There are also potential cost increases based on inflation, rising labor and material costs, and other variables the county probably could not have predicted when the agreement with Zimmer was reached over a year ago. Asked if a future amendment to the current MOU representing those increased costs was possible, Rigby said it was possible but that it would need commissioner approval.
To move forward, the county will have to convince the Local Government Commission, part of the state treasurer’s office, that this is the best deal for the public. Project Grace is slated to go on the LGC agenda on July 12.
[Editor's note: The county later notified WHQR that the LGC agenda date has been moved back from July 12 to August 2. "Our understanding is that Treasurer [Dale] Folwell made the request to move this item back three weeks in order to allow him additional time to learn about the project."]
If the LGC shoots the lease-to-own model down, the new agreement allows to county to buy the plans — for no more than $2.5 million — and build the library and museum itself. This new stipulation replaces the $800,000 penalty the county would have paid for backing out of the project in the earlier agreement, according to Rigby. If the LGC doesn't approve the plan, "the county would need to regroup and determine the best path forward for construction, outside of the P3 model, with our team," according to the county.
If, however, the LGC approves the project, Rigby said the county could break ground by the end of August or early September.
The New Hanover County Board of Commissioners will meet at 9 a.m. on Monday, June 20, at the New Hanover County Historic Courthouse, 24 North Third St., Room 301. You can find the proposed MOU with Zimmer here.
Editor's note: This article has been updated with input from the county to clarify some of Rigby's responeses.
