Despite criticism from Treasurer Folwell, New Hanover County's Project Grace will get a vote this fall
On Tuesday, New Hanover County officials were once again in front of State Treasurer Dale Folwell as they tried to move Project Grace forward. It's clear the county and the Treasurer are at odds — but it now seems the proposal will at least get an up and down vote from the state.
For almost a decade, county commissioners and staff have been working on some version of Project Grace, a potential redevelopment of the downtown library that would mix a new public library and relocated Cape Fear Museum with private development.
Recently appointed county commissioner Dane Scalise made a pitch for the county.
“Since 2014, when we completed the purchase of an entire city block in downtown Wilmington, we've been planning, thinking, researching how we make the best impact for our community," Scalise told State Treasurer Dale Folwell and the Local Government Commission (LGC).
The LGC, chaired by Folwell, reviews the major financial decisions of local governments. Over the last few years, Folwell has criticized the county’s plans. He first objected to the county’s ‘lease to own’ deal with the Zimmer Development Company, arguing they could save over $20 million by directly financing it.
Folwell was particularly critical of this financing plan since the county had put forward a very similar proposal for its redevelopment of the county government center; after Folwell notified the county that debt financing — utilizing the county's exceptional credit rating — would save taxpayers over $20 million.
Now, he’s objecting to the county’s public-private partnership with developer Brian Eckel and his firm Cape Fear Development (CFD). Eckel worked with the county on the government center, a fact Folwell has leaned into in his criticism of his Project Grace, noting that Eckel and Cape Fear Commercial (a commercial real estate firm closely related to CFD) were also involved in the county's purchase of the Bank of American building on behalf of Cape Fear Community College, and that Eckel's firm had a hand in the sale of the former PPD building, which Thermo Fisher eventually purchased and then sold to the City of Wilmington.
Eckel told WHQR he wasn't involved in the PPD sale; Cape Fear Commercial broker-in-charge Paul Loukas provided local assistance to Cushman & Wakefield, which handled the sale for Thermo Fisher, according to documents provided by the city. (City Councilman Charlie Rivenbark, who also works for Cape Fear Development, also told WHQR he had had no role in the sale, describing himself as effectively an independent contractor for the company).
Folwell argues the county should build the new public facilities and put the rest of the downtown block up for sale on the open market — preferably with an upset bid process, which he sees as the most transparent way to offload property. He's also suggested that the county could avoid his interference altogether if they pulled money from the roughly $300 million in revenue from the sale of New Hanover Regional Medical Center that is currently in the county's "revenue stabilization fund."
County Manager Chris Chris Coudriet disagreed, saying that — again, due to the county's high credit rating — it would actually be cheaper for the county to take out bond debt and pay it back than to use its revenue fund. Basically, county officials say that it's earning too much interest on its nest egg compared to the interest it would pay on bonds.
In response to a question from LGC board member Paul Butler, Coudriet noted that sealed bids would likely not generate the same per-foot value as an upset bid — but argued neither upset nor sealed bids offered the same guarantees as a public-private partnership, which is the county's current policy.
Along those lines, Coudriet and Scalise both argued that without the public-private arrangement with Eckel (or another developer), there's no way to guarantee quality development in the heart of Wilmington — or any development at all, as Scalise noted other corporately owned properties have gone fallow.
Folwell disagreed, saying he didn’t believe the county cared about the surrounding area — using the proximity of the county’s new government center to a strip club as an example.
“I don't see much evidence that you really care much about the development next to you, if you build the brand new county building outside of a strip club," Folwell said.
Ultimately, it's a conflict of ideologies. The county sees Project Grace as having the potential to reshape downtown Wilmington and generate economic development dividends; Folwell thinks the project should be more narrowly limited to providing key services — i.e. a museum and library — and liquidating surplus government-owned land in the simplest, most profitable way possible.
Folwell also gave the floor to Diana Hill for a considerable amount of time. Hill runs the Save Our Downtown Library and Museum Facebookpage and has been an outspoken critic of several facets of Project Grace, including the demolition of the historic buildings on the block instead of adaptive reuse and the overall reduction in the size of the library in its new form — among other concerns.
At the end of the day, despite the tensions, Folwell said he would allow the full nine-member board of the Local Government Commission, which reviews major financial transactions for counties and cities, to vote on Project Grace. In a joint statement, county commissioners said that's essentially all they want:
We appreciate the Local Government Commission’s thoughtful consideration of Project Grace and the opportunity to engage in today’s robust and in-depth dialogue. This initiative continues to have unanimous, bipartisan support and is crucial for New Hanover County's progress. We eagerly await the LGC’s final review and a vote in October.
Editor's note: This article has been updated to clarify County Manager Chris Coudriet's comments on the relative values of sealed and upset bids.