In split vote, LGC approves debt financing for New Hanover County's contentious Project Grace
After months of back and forth, the Local Government Commission voted to approve the debt financing needed for Project Grace.
Tuesday afternoon, the Local Government Commission voted to approve the $57 million debt issuance to finance New Hanover County’s Project Grace. The LGC, part of the state treasurer's office, is a nine-member board chaired by State Treasurer Dale Folwell that issues approval for major financial decisions made by local governments.
In this case, it’s New Hanover County’s proposed redevelopment of a downtown block that will include a new library and Cape Fear Museum facilities.
The public-private partnership will also include commercial and residential development on the south side of the block.
The approval, however, did not come without a fight. Folwell has been critical of the project from the beginning, saying, “There has been nothing graceful about this thing called ‘Project Grace.'”
After Folwell signaled the LGC would not approve the lease-to-own plans for the project, the county parted ways with its original developer and partnered with Cape Fear Development.
As the portion of the meeting considering Project Grace opened, Folwell laid out his reasons for questioning the project. In particular, Folwell noted his concern that Cape Fear Development had been involved with several regional projects, including the county's government center redevelopment.
Folwell’s motion to deny the project failed to get a majority, garnering a 4-4 vote after member Vida Harvey abstained from the vote, bowing to pressure from other board members to recuse herself. Harvey works for Novant, and developer Brian Eckel, co-founder of Cape Fear Development, serves on the Novant board.
LGC Member Mike Philbeck criticized Folwell for the move, saying that Harvey should not have been coerced to abstain.
“Legal council seemed to indicate that Ms. Harvey had no conflict of interest. I do think it's wrong for you and [LGC member Paul] Butler, I love and admire both of you. But I do think you bullied her. And I'm very very upset at the way this has gone down if this is not approved," Philbeck said.
LGC members further debated the issue and, after discussing the duty to vote versus the reasons for recusal with staff, Harvey chose to vote in the final decision.
The LGC voted to approve the debt issuance 5-4 with members Paul Butler, Nancy Hoffmann, Treasurer Folwell, and State Auditor Beth Wood dissenting.
Editor's note: This article has been corrected to correctly identify Beth Wood, not Elaine Marshall, as being the fourth dissenting vote.