New Hanover County commissioners tweak, approve Project Grace deal, stick with lease-to-own
This week New Hanover County commissioners unanimously approved moving forward with Project Grace, after making a few minor tweaks. Those changes left in place the financing structure, which includes $24 million in additional costs to taxpayers in order to ensure the participation of private development.
Several of the last minute changes to the Memorandum of Understanding, or MOU, between Zimmer Development Company and the county addressed concerns voiced earlier this month by the advisory boards for the Cape Fear Museum and the New Hanover County Public Library.
These concerns included 8,000 square feet of shared space, which had been identified in a needs study but left out of the original MOU. The space has been restored to the project at no additional cost.
According to Jennifer Rigby, the county’s chief strategy officer, this was an accidental oversight.
“This was included in Zimmer’s calculations, but was accidentally left out of the memorandum of understanding.”
Other concerns addressed by the updated agreement include a 60-day discovery period to allow Zimmer to meet with library and museum staff and boards. Commissioners also agreed to remove any reference to the City of Wilmington leasing office space in the project; Zimmer noted that the city had not committed, but could be added later.
Then -- there’s the financial elephant in the room: since the county could build the museum and library for $24 million less than the current lease plan, why not do that?
Commissioner Jonathan Barfield, Jr., asked County Chief Financial Officer Lisa Wurtzbacher why a lease was being pursued. Barfield referenced the recent decision by the Local Government Commission, part of the State Office of the Treasurer, against using a similar lease plan for the redevelopment of the government center.
“[Barfield] “The LGC determined it was in our best interest to build and pay for it ourselves versus leasing, so again help me understand the benefit… [Wurtzbacher] If we talk about the project as a whole, and I don’t know if I’m answering your question directly because this is not just about the lease, we will have the lease cost, but as a part of this overall deal the developer is committing to private development, which will bring in tax revenue.”
And an added issue, Development Director Adam Tucker confirmed that Zimmer would not be interested in changing the lease agreement, saying his company was not “merchant builders.”
While this could set up a potential hitch when it comes to state oversight, commissioners agreed to stick with the more expensive lease option, betting on increased development activity in the area to help even the financial scales with added tax revenue.
Several people attended the hearing to speak against -- and in favor -- of the project.
Travis Gilbert, executive director of the Historic Wilmington Foundation, asked the county to preserve the historic buildings on the Project Grace block, including the Belk-Berry building that now serves as the library, and the Borst Building, built in 1926 as Wilmington's first Chrysler dealership, and later serving as the Register of Deeds office.
“Loss of the Borst Building will have damaging repercussions to the entire Wilmington National Register Historic District.”
Phoebe Bragg, a former president of Residents of Old Wilmington, reiterated some of ROW’s past concerns, plus the increased cost of construction -- but ran over her allotted speaking time.
“I’m running out of time, but I just want to close with this -- I’ve heard a lot about highest and best use, and achieving full market potential --- [Chair Julia Olson-Boseman] your time’s up ma’am --- [Bragg] It’s not the government’s role [cross talk, gaveling].”
Holly Childs, who recently took over as President and CEO of Wilmington Downtown Incorporated, spoke in favor of the development, framing it as an economic --- but also diversity and equity issue.
“Now we aren’t just talking about a place for equity and social justice in downtown Wilmington, we’re actually building it … as Martin Luther King, Jr. said the time is always right to do the right thing.”
While the MOU helps solidify the framework for Project Grace, there are still a lot of unknowns.
These include: what -- and where -- library services will remain accessible during construction; whether Zimmer will lease or purchase county land for private development; and what that development will actually be, what it will cost, and what the exact mix of residential, commercial, and retail will look like.
Some of those questions will be answered by early next year, when final design plans are expected to be presented, followed by a development agreement in Spring 2022. If the project continues apace without future setbacks, construction would wrap in summer of 2024.