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New Hanover County moves ahead with Bank of America lease to CFCC

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Benjamin Schachtman
/
WHQR
The former Bank of America building in downtown Wilmington.

County Commissioners approved leasing the downtown Wilmington office building to Cape Fear Community College to expand its nursing program. While officials don’t expect any serious issues, the deal still hinges on a few other moving pieces.

During Monday’s New Hanover County Board of Commissioners’ meeting, the board voted unanimously to lease the former Bank of America to Cape Fear Community College.

The deal was brought to the county by local developer Brian Eckel and his firm, Cape Fear Commercial. Eckel took the building under contract and offered to transfer it to the county, which would then lease it to CFCC for a nominal fee of $1 annually, provided it passed all due diligence inspections.

Related: New Hanover County commissioners unanimously approve $12-million building purchase for CFCC

Last year, Eckel told commissioners he wanted to see CFCC expand its capacity to train nurses, as the industry is seeing a profound employment shortage. It’s a national issue that has been felt acutely at New Hanover Regional Medical Center, which teetered on the brink of losing federal contracts as its staffing conditions deteriorated dangerously last summer.

That argument won over commissioners, who in October unanimously approved $11.8 million to buy the building and $14.8 million to upfit the office space to be able to provide classroom and lab space. Commissioner Rob Zapple said when the project is all said and done, CFCC will have 55,000 square feet of classroom and lab space for the nursing and allied health programs.

The exact details of how the building will be retrofitted haven’t surfaced yet. At the CFCC Board of Trustees meeting in January, when County Commissioner and college trustee Jonathan Barfield asked what CFCC President Morton’s vision was for the building, Morton responded that he has a “plan and projections for when the leases roll off”; however, he didn’t elaborate what this was.

Other steps to closing the deal

To fully complete the deal, there are a few more hurdles, including two different state approvals and an outstanding legal disagreement.

First, the lease itself needs the approval of the State Board of Community Colleges. County Manager Chris Coudriet noted that vote is expected to happen at the board’s February 19 meeting. Officials at the county and CFCC have expressed confidence the state board will approve the deal.

The deal will also indirectly require approval from the Local Government Commission (LGC), the division of the State Treasurer’s Office that reviews major financial transactions involving municipal and county governments. According to Eric Credle, the county’s chief financial officer, LGC approval isn’t required for the land purchase itself, but it will be required when the county issues the debt to finance the purchase. That process is expected to take place in late spring. A spokesperson for the LGC said it had not yet received an application from the county.

There’s also a legal disagreement that needs to be settled before the county can legally complete the purchase of the building.

During the meeting, Coudriet mentioned the unspecified issue, saying that the county could not close on the property until it was resolved, and adding that some additional action by the board could be required. Coudriet noted Credle could provide additional information, although commissioners did not ask any further questions during the meeting.

According to Jessica Loeper, the county’s chief communications officer, “a prior owner of a portion of the property has initiated a legal action against the seller regarding a claim for parking spaces. Those two parties are working to resolve the matter prior to the closing.”

Other details and the road ahead

The building still has several tenants and, under the terms of the deal, CFCC can put that rent toward operating costs for the building, like utilities, maintenance, and repairs. Any excess rent above those operating costs will get ‘remitted’ back to the county.

As the current tenants are phased out, the county will be required by state law to provide those operating expenses, to be included in the college’s annual budget request from the county.

Much longer term, CFCC will eventually acquire ownership of the building — provided that it is being used as laid out in the county’s agreement with the college (i.e. as part of the college’s nursing program). The county will convey the property to CFCC once the debt used to finance the purchase is repaid, which Credle said would likely be in around 20 years.

A final question, though not a requirement in the deal, is ramping up funding for nursing programs — including faculty salaries.

Related: "I took a paycut": Nursing faculty shortage worsening, low pay a major factor

Part of the nursing shortage is also a lack of a nursing faculty — and the problem is becoming a mutually-reinforcing spiral: hospitals and healthcare systems are competing for a smaller number of nurses by offering higher pay — which raises the financial bar for those nurses, especially those with more experience, to walk away from well-paying jobs into teaching positions, which often cannot compete when it comes to compensation. But without sufficient nursing faculty, it’s impossible to keep up with the demand for more nurses.

To further complicate the issue, the former practical nursing program director Carolyn McCormick left on May 31 last year, after 22-years at the college. According to her, the college was pushing students to complete certificate programs and rather than degree programs, and there wasn’t much movement on the college’s part to increase salaries to maintain high quality staff while upper administration received considerable raises, Morton included.

While he did not mention nursing faculty specifically, Commissioner Jonathan Barfield, who serves alongside County Chair Bill Rivenbark on the CFCC Board of Trustees, did bring up the need for pay increases “across the board” for faculty and staff at the college.

Citing the failure of salaries to keep apace of inflation and other rising costs, Barfield asked staff to include increased state-level support for college employees alongside the county’s other legislative goals; those are issues that the county advocates for through its relationship with the North Carolina Association of County Commissioners and its team of state and federal lobbyists.

Ben Schachtman is a journalist and editor with a focus on local government accountability. He began reporting for Port City Daily in the Wilmington area in 2016 and took over as managing editor there in 2018. He’s a graduate of Rutgers College and later received his MA from NYU and his PhD from SUNY-Stony Brook, both in English Literature. He loves spending time with his wife and playing rock'n'roll very loudly. You can reach him at BSchachtman@whqr.org and find him on Twitter @Ben_Schachtman.