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Project Grace runs into State Treasurer Dale Folwell's objections, again

Commissioner Jonathan Barfield voicing his concerns about State Treasurer Dale Folwell at the August 21 commission meeting
New Hanover County YouTube
Commissioner Jonathan Barfield voicing his concerns about State Treasurer Dale Folwell at the August 21 commission meeting

State Treasurer Dale Folwell has refused to put Project Grace on the LGC calendar, again voicing concerns about financing and, now, suggesting a new museum and library could go in the Thermo Fisher building, recently purchased by the City of Wilmington. Some commissioners are calling it retaliation for the county's sale of the hospital, a move Folwell protested.

Update: This article has been updated with comment from Treasurer Dale Folwell.

On Monday, New Hanover County Commissioners voted unanimously to approve taking out $57 million dollars in debt funding for the new joint library-museum redevelopment known as Project Grace, but the project is still running into one particular obstacle.

According to county manager Chris Coudriet, commissioners are up against Dale Folwell, the state treasurer and chairman of the Local Government Commission or LGC — that’s the state board with oversight of major financial decisions made by local governments.

Folwellsank a previous version of Project Grace over its lease-to-own financing plan.

There were eight members of the public who spoke about Project Grace as part of a public hearing; a majority were in favor of the project, although Diana Hill, who has been a longtime critic of the project as part of the Save our Downtown Library and Museumgroup, again spoke against the demolition of the historic buildings on the block.

Following public comments, Coudriet told commissioners Folwell now has fresh objections. One, Folwell does not like the site, and apparently asked if the project could go into the Thermo Fisher building recently purchased by Wilmington, and two, he thinks the county should use the $300 million revenue stabilization fund (RSF) from the hospital sale — not debt financing using a bond.

When commissioners heard that Folwell would not allow the county bond to be considered at its September meeting, they all were taken aback, saying things like this wasn’t Folwell’s jurisdiction and that the bond, citing a 4% interest rate, would in fact be a cheaper route than using its cash reserves through the RSF.

Coudriet said that the county’s cash reserves are typically for emergency uses only. He referenced the time the county had to use $32 million from its general fund to support Hurricane Florence relief efforts while waiting to be reimbursed by the federal government — and when sales taxes were down during a recession.

“Those [sales taxes] were not captured at the rate expected and fund balance was available to offset those short revenues so that we did not have to make a substantive change to service in the middle of a budget,” Coudriet said.

Commissioner Dane Scalise said this has been a bipartisan effort, and Folwell should not overstep the will of the commission and the constituents of New Hanover County.

“There's a mechanism by which it can be approved, it needs to be approved. It's time to stop talking, and it's time to start acting,” Scalise said.

As for using the first two floors of the city's new downtown building, Coudriet said he’s been in talks with City Manager Tony Caudle, and “they both agree it is not the right location for a museum in a library.”

Commissioner Rob Zapple said the county doesn’t own the former Thermo Fisher building, and there could be a scenario in which there could be a “major upfit." He also added there would need to be a “lease of some sort, so that doesn’t make any sense.”

Most commissioners agreed, too, that the former Thermo Fisher building is too far from the central part of downtown Wilmington where the project should be located.

Both Commissioners Jonathan Barfield and Bill Rivenbark said this was a “retaliatory move” on the part of Folwell because of the county sale of New Hanover Regional Medical Center, as he was staunchly against the move.

Barfield asked the county attorney if the commission could sue the state if the LGC fails to consider the project.

“Because to me, if he's the roadblock, and we are one of the handful of counties in the country that has [two] triple AAA bond ratings, I would think we will have good standing in case to carry to the next level,” Barfield said.

County attorney Jordan Smith responded to Barfield that he hasn’t heard of a county or municipality suing the LGC before but could look into it. He advised that a better and quicker way would be to encourage other members of the LGC board to override Folwell with a vote on putting their proposal on the calendar. As LGC chair, Folwell has the authority to 'calendar' projects — or not — for upcoming meetings; however, a majority of the nine-person board could vote to place an item on the calendar.

Following the meeting, commissioners signed a letter to Folwell, laying out their case for Project Grace (in its current form, at its location). Apparently following Smith's legal advice, they asked Folwell to change his mind and calendar the project — and the rest of the LGC to vote if Folwell doesn't do so. Governor Roy Cooper, Senate President Phil Berger, House Speaker Tim Moore, and state senators Bill Rabon and Michael Lee were CC'd on the letter.

(Note: You can find the letter at the end of this article.)

Folwell's response

Folwell told WHQR that it's inaccurate to say he "doesn't like" the location, adding that his only concern is transparency and saving money for the taxpayers by doing the project "more efficiently." Folwell gave the example of using the bottom floors of the Thermo Fisher building.

Folwell said he would not calendar Project Grace until more questions about the project had been answered. Asked what questions remain unanswered, Folwell said he was working with LGC staff on that.

"But my job force first and foremost is to ask questions and get those questions answered. Nobody's gonna bully me into not doing my job," Folwell said.

Folwell also said it was inaccurate for Coudriet to say he wanted the county to use its revenue fund, but that he had told staff that by using that fund the county could avoid the need for LGC approval.

"No, what I said was — Chris Coudriet, I don't think has ever been in a private meeting with me, by the way —what I said to members of his staff was, if this is so important, and you have over a quarter of a billion dollars in the bank, you could do this transaction without the approval of LGC at all," Folwell said.

Lastly, Folwell denied his stance on Project Grace was "retaliation" for the sale of the hospital.

"Anybody who's pointing a finger back regarding the hospital, they better start looking at the fingers pointing back at themselves about who was on that committee to decide to sell that when they use words like 'retribution.' They're trying to steer people into looking in a different direction," Folwell said.

Below: Letter from New Hanover County Commissioners to Treasurer Dale Folwell. Commissioners CC'd Governor Roy Cooper, Senate President Phil Berger, House Speaker Tim Moore, and state senators Bill Rabon and Michael Lee.

Rachel is a graduate of UNCW's Master of Public Administration program, specializing in Urban and Regional Policy and Planning. She also received a Master of Education and two Bachelor of Arts degrees in Political Science and French Language & Literature from NC State University. She served as WHQR's News Fellow from 2017-2019. Contact her by email: rkeith@whqr.org or on Twitter @RachelKWHQR
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.