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Project Grace redux? Local development team explores revival of New Hanover County's library project

Architectural Firm LS3P revealed schematics and floor plans for Project Grace on Oct. 5, 2021. The building will house the county library and Cape Fear Museum, once completed.
New Hanover County
Architectural Firm LS3P revealed schematics and floor plans for Project Grace on Oct. 5, 2021. The building will house the county library and Cape Fear Museum, once completed.

While there is no formal agreement in place, Wilmington-based Cape Fear Development is exploring the potential to reboot the county’s Project Grace — which was shelved after the state identified issues with the financing. The development team says it will seek input from the business community and the general public.

A local development team wants to reboot Project Grace, addressing concerns from the state that the initial plan was too costly for taxpayers.

Cape Fear Development said it's soliciting feedback from the public and exploring its options, with the intent of delivering a report on Project Grace to New Hanover County in late February.

Back in 2017,the county first introduced the idea of Project Grace. The project burnt out — but resurfaced two years later, developing into a public-private partnership (P3) to demolish and rebuild the downtown library, combined with a relocated Cape Fear Museum, which would together occupy the northern part of the block bordered by Grace, Chestnut, 2nd, and 3rd streets. The southern portion of the block would be developed privately as part of the agreement, and feature a hotel, residential units, and commercial and retail space.

The Local Government Commission (LGC), part of the State Treasurer’s office, ultimately failed to approve the plan last September — in large part because it called for the county to ‘lease to own’ the library as part of a P3. This would allow the county to help guarantee (and steer) the private side of the development, and generate significant tax revenue. But the LGC argued that directly financing the public library and museum and selling the other land for private development was more fiscally responsible.

Related: Project Grace sputters out

Last fall, Cape Fear Development approached the county to express interest in the project. Now the developers say they’re teaming with LS3P, the architects for the original Project Grace plan, and Monteith Construction, to consider resuscitating the plan.

“In November 2022, Cape Fear Development approached the county with interest in looking at the plans for Project Grace. We’ve raised our families in this county and believe Project Grace can have a transformative benefit on our downtown, provided it’s pursued in a way that’s fiscally responsible and best aligned with the needs of our community. Our downtown has come a long way over the past decade, yet, it still needs more economic opportunities and amenities like a grocery store. The success of Project Grace and the surrounding block may be able to help spearhead that continued progress,” CFP co-founder and partner Brian Eckel wrote in a statement.

It’s not clear if a new version of Project Grace would include a grocery store or just help catalyze one in a neighboring project (by increasing population density, for example).

According to Cape Fear Development (CFD), the team has been looking at ways to “value engineer” — that is, build for less money — Project Grace to make it “more affordable for county taxpayers.”

CFD also says it’s been “proactively addressing concerns the Local Government Commission raised in their Sept. 15, 2022 letter highlighting changes the LGC recommended to the financial framework.” [Note: You can find the letter at the end of this article.]

One of the main concerns in that letter was the suggestion of Treasurer Dale Folwell — who chairs the LGC — that the county “change the method used to sell the private use portion of the property from a negotiated sale with the project developer [i.e. a P3] to a public bid process.” This, Folwell wrote, would allow “the market to determine the value of the property.”

CFD hasn’t determined if this would involve a P3 — along the lines of the original, ill-fated Project Grace, but with a decreased cost — or something different.

CFD could build the public library and museum side on a contract with the county, and compete in an upset bid for the other part of the block. However, its conceivable CFD could be outbid and lose control of half of the project. Other types of development agreements might also be feasible.

Mike Brown, a partner with CFD, said “at present we are simply evaluating the project and no conclusion have been reached as of yet.”

The county is also taking an open-ended view of the project. Asked if the county would entertain possible P3 proposals, development agreements, or other possible approaches, County Manager Chris Coudriet issued a statement:

The county understands and supports the due diligence that Cape Fear Development has undertaken. The project is about more than just the public purposes and investment on the block; it’s equal parts private investment with private money at risk. So it’s important for any private developer to do their due diligence to conduct outreach and also see if there is value and a market in general for being part of this block with a museum and library – both today and going forward. The vision from the beginning of Project Grace was to bring private investment and public purposes to the block to help transform downtown Wilmington. So we look forward to hearing an update from Cape Fear Development after their initial evaluation for the project is complete.”

In the meantime, CFD is looking to the business community, and the broader public beyond that, for feedback on the potential of a reimagined Project Grace.

In addition to working with “community leaders and stakeholders,” CFD said it is “[w]orking alongside the Wilmington Chamber of Commerce, CFD has begun outreach efforts to employers and their constituencies and plan to complement these efforts with expanded community outreach to the public at large during the month of February.”

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.