Saturday, July 20, 2024

Another developer enters the game in pursuit of NHC’s Project Grace

Cape Fear Development, along with Monteith Construction and LS3P, is reviewing the plans for redevelopment of a combined county library and museum downtown. (Port City Daily/Amy Passaretti)

NEW HANOVER COUNTY — A leading real estate company in town is eyeing development plans for a county-owned block downtown.

Cape Fear Development, in conjunction with Monteith Construction and architect LS3P, is evaluating ways to bring Project Grace to fruition after it was quashed by the state early last fall.

READ MORE: ‘A deal is a deal’: Commissioners at odds about paying Zimmer more than negotiated for Project Grace plans

The one-block project at Grace, Chestnut, Second and Third streets is intended to combine the downtown library and Cape Fear Museum into a new building with additional development. It was presented last year to include apartments, including 5% percent workforce housing, retail and possibly a hotel, with Zimmer Development Group leading the private portion of the county’s public-private (P3) partnership.

Once the Local Government Commission disapproved of its finance plans with Zimmer in September 2022, the county sought to go it alone.

County commissioners approved in November purchasing design plans for the negotiated $2.5 million in exchange for work already done by Zimmer and LS3P. Regardless of how the private side of the block is developed, the county has been clear it still plans to build its new state-of-the-art culture hub downtown.

Cape Fear Development expressed interest in studying the plans three months ago and is now reaching out to gauge the business community’s and public’s interest.

An email obtained by Port City Daily from Cape Fear Development partner Brian Eckel sent to local leaders shows a request for formal support.

“I can tell you with certainty, some of the folks in Raleigh at the LGC are still unsure what our business community thinks of this project,” Eckel wrote. “Therefore, I am on a mission to answer that question. If the business community does in fact support this re-development, I want them to be vocal and support it. If they don’t support it, that’s good to know too and I’d love to hear from you and get your thoughts.”

He asked for signatures of endorsement to “send a powerful message” to the LGC that Project Grace has support.

The email notes Live Oak Bank and Mega Corp are already on board and committed to endorsing the project; a request for comment from both companies went unanswered by press. PCD will update if and when either responds.

Eckel stated in the letter that Cape Fear Development will work with the Wilmington Chamber of Commerce to reach out to the public throughout February. 

“To engage the business community, the chamber has shared critical information with our board of directors and hosted several information sessions for the community,” chief marketing and engagement officer Megan Mullins wrote in a statement to PCD. “We will continue to collaborate with CFD, to engage with our board of directors, and share information with our membership of 1,000 unique businesses in our community throughout the process.”

She added the chamber continues to support Project Grace because it could enhance downtown and attract talent and workforce, leading to business growth.

The 201 Chestnut St. library, formerly a Belk Beery Department Store, was built in 1952. It would likely come down to make way for private development after a new combined library and museum is constructed. Along with it, the 1926 Borst Building, located on Second Street, would be demolished.

According to internal emails obtained by PCD, the library’s Story Park will be lost if development occurs. It sits on the south parcel, which is what would be sold for private investment. County spokesperson Jessica Loeper said at this time it’s unclear what will happen to the park as a decision on that parcel has not yet been made. 

The new library blueprints by LS3P include two outdoor reading terraces, one dedicated specifically to children.

The Cape Fear Museum at 819 Market St. will continue to be used by the county for museum purposes, even though the main exhibits would likely move to Grace Street.

Museum staff is currently working on a five-year strategic plan to incorporate new exhibits, attract diverse audiences, and become a “top science destination.” According to internal emails, director Wayne LaBar has tasked staff to come up with ways to improve service at the current location “while advancement on Project Grace is in a holding pattern.”

Diana Hill, an activist behind Save the Main Library — a group of 2,000 against the demolition of the buildings as well as reducing square footage — reached out to both State Treasurer Dale Folwell and New Hanover County manager Chris Coudriet about Cape Fear Development’s interest.

“Obviously, Mr. Eckel, who has been doing business with the County in the past and appears to have hopes to continue in the future, doesn’t understand that the mission of the LGC is to protect taxpayer money — not developers’ interest,” Hill wrote to Coudriet.

Hill has been pushing for renovations of the library and museum in their current locations, and converting the Borst Building into a city market.

“[That] should make the business community happy and provide the public services for residents that our taxes … should be paying for,” Hill wrote to Folwell.

Folwell told Port City Daily on a call Wednesday the LGC’s role in the project has not changed: “That is transparency and good governance.”

He has called New Hanover a “prosperous” county government that could borrow money for cheaper than its deal with a P3. Folwell was referring to Zimmer building out the library and museum and leasing it to the county for 20 years. In the end, the county would have paid nearly 12% interest back to the developer. 

However, Folwell maintains the county could issue debt and borrow the money at closer to 3%.

“People always use the word ‘partnership,’ generally speaking,” Folwell said. “If you look at the dictionary, the word is associated with doing something because you can’t really do it yourself. And the fact is, New Hanover County has the financial wherewithal to where they don’t need to pay someone 12% profit to do something.”

He also took issue with the county and Zimmer’s contract “tying the hands” of the LGC. A provision was noted, and later removed at Folwell’s request, that dictated how much money — $2.5 million for the plans — the county would repay Zimmer if the state did not approve financing.

Zimmer was guaranteed the purchase of half the property for private investment, which Folwell said should be sold in an upset bid process to dictate its value in the market. The LGC’s job is reviewing financing to ensure there are “no inside dealings.” Folwell previously expressed concerns about the county’s process searching for a development partner and the benefits gained on the private side of the deal.

Loeper confirmed Cape Fear Development is the only company at this time that has openly expressed interest to the county about Project Grace. There is no formal agreement between the entities at this time. Only preliminary research is underway. 

Cape Fear Development is working with Monteith and LS3P to identify value-engineering opportunities — scaling back on scope to save money — and meeting with local stakeholders for feedback.

“Since November we have been working with CFD to fully review the plans for Project Grace, including tightening the project budget and ensuring the final product speaks to the hopes and aspirations of the broader community,” Monteith Construction CEO Bryan Thomas said in a Cape Fear Development press release. “We are committed to ensuring this project is done within budget and that it helps to address some of the key needs for growth within downtown Wilmington.”

“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,” county manager Chris Coudriet wrote in a statement to PCD.

He added the vision all along has been to incorporate private investment and public purpose to the block to “transform” downtown. Eckel seems to agree, according to the release.

“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,” Eckel wrote. “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.”

Loeper said a grocery store has not been a requirement for the property but something a developer could explore based on community need and what the market would support.

Throughout the years there have been many attempts to bring a grocery store to the downtown area, especially needed to serve many offshoot neighborhoods considered food deserts. Currently, there are gourmet markets in the downtown vicinity and Better Basket, considered a “grocerant.” 

Soon, the northside could have access to a food co-op. The county is partnering with Northside Food Co-op to establish a food store on Fanning Street by next year. The goal is to break ground on the 2.35-acre property after finalizing architectural plans.

READ MORE: County accepts city land donation for Northside grocery store

Mike Brown, partner with Cape Fear Development, noted in the release that constructing a flagship arts and culture hub for the community could open up additional opportunities for other “crucial projects,” including housing.

Cape Fear Development will present its findings to the county later this month.

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