Monday, June 17, 2024

Residents speak out against $70M financing council approved for Thermo Fisher campus

Thermo Fisher Building (Port City Daily/Amy Passaretti)

WILMINGTON — City council unanimously approved $70 million in financing to purchase the downtown Thermo Fisher building on Tuesday, despite pushback from some residents.

According to internal emails obtained by Port City Daily, at least a dozen people have written to the Wilmington City Council to oppose the building purchase, which comes with a 1.5-cent tax increase. Another three spoke against the purchase during the public hearing Tuesday.

READ MORE: $3M annually to operate Thermo Fisher building, council debates what floors to occupy

ALSO: $1.5-cent property-tax increase part of city’s potential purchase of Thermo Fisher campus

The purchase includes the 12-story Front Street building, a 1,000-space parking deck and two vacant parcels flanked on either side, which the city plans to sell to cover debt on the property. 

The city will occupy five floors, and the rest will be leased at market rate to various companies, including Thermo Fisher.

City council member Luke Waddell expressed his desire for the city to lease out the top floors instead of staff’s proposed seven through 12, as it would result in a greater rate of return for taxpayers.

Some outspoken residents agreed.

“The city wants to occupy the most scenic and desirable floors,” Arthur Brown wrote to council April 11. “I would venture that those floors have the most high-end executive offices with gorgeous river and city views which would generate the greatest revenue. But no, our city will take those offices so that the leased space on lower floors will generate the least revenue for the taxpaying public.”

Another resident called the buy a “luxury class-A office building” the taxpayers cannot afford.

Charlotte Hatfield, a resident since 1979, noted taxes keep increasing while the population has grown, meaning more people should be covering the costs needed. 

“I quite frankly am tired of our taxes being spent to purchase real estate,” she wrote March 29. “Enough is enough. Someone has to be lining their pockets for all this.”

The only council member who responded to residents’ emailed concerns was Neil Anderson, not present at Tuesday’s meeting. He reminded them the city was in the process of rebuilding a new city hall at 305 Chestnut St. for nearly $90 million — this would no longer happen if the city purchases the Thermo Fisher campus. It also would have had to likely lease space during construction, so it could still sell off the other seven buildings it occupies around town. 

“This would take place in the next 5-8 years if we do not buy PPD,” Anderson wrote, “resulting in a much larger tax increase.”

The goal of the city to take on the purchase was to consolidate all city departments under one roof, excluding the Wilmington Police Department, Wilmington Fire Department and additional maintenance facilities on River Road. Currently, employees work in eight separate buildings.

Anderson said the Thermo Fisher building was appraised for $130 million, including furnishings — nearly double what the city plans to pay for it.

Mayor Bill Saffo asked what the tax value of the building is.

“$110 million, for real property,” Caudle said. “That’s the county appraised value for tax purposes.”

According to Anderson, some companies in the private sector considered turning it into residential units, but the set up was not designed to accommodate that. 

“We can then sell the parcels we own (have had a lot of interest) and the two pieces of land on either side of PPD likely curbing the overall cost by 40-50%,” Anderson wrote. “So now then we own it for 30-35 mil.”

During Tuesday’s public hearing, Mike Hartnett warned council against buying commercial real estate in today’s volatile market. Glenn Wells and Tom Morgan both asked for an alternative to a tax increase, which the city has implemented for the last three years.

While this week’s vote allows county staff to proceed with the sale, it isn’t a done deal. They have to apply for funding and seek approval from the Local Government Commission, chaired by state treasurer Dale Folwell.

Folwell told Port City Daily he is always concerned when local governments raise taxes.

“Whether it’s this or a school bond, we’re dealing with an environment costing people more to live, more to eat, more to heat their homes,” he said. “And at the end of the day, these cities need to figure out ways to actually lessen the tax burden. Ultimately, lower income people get hurt the worst.”

The LGC will vote on the financing May 2.

Tuesday, council member Kevin Spears was the only one to ask for other financing options in the proposed upcoming budget that won’t include a tax increase.

“I understand the purpose of property taxes, but not everyone is so easy to understand or take on that burden,” he said. 

Finance director Jennifer Maready explained to council a 1.5-cent increase would equate to the average homebuyer paying about $40 more per year. 

One resident spoke in favor of the purchase on Tuesday. John Melia expressed a willingness to pay the extra taxes for the city to streamline operations.

Melia also said the area of town is considered a “gateway” to downtown with the readily available structure and parking deck able to expand public parking options, specifically for concerts at Live Oak Bank Pavilion.

The Wilmington Chamber of Commerce stands in support of the purchase. President and CEO Natalie English told council buying the downtown property and selling off its other properties present an opportunity for economic development.

Caudle explained the positives for moving forward with the purchase at Tuesday’s meeting. The price tag is lower than what it would be for the city to redevelop a property it currently owns or build new. He added that building a 1,000-space parking deck would cost roughly $30 million.

The deck would also be open to the public. During weekday business hours, up to 600 spaces would be open for use, increasing to 1,000 after work hours and on weekends.

Due diligence is still underway by staff, slated for completion June 11. Following approval by the LGC, the city would price its limited obligation bonds, being used to finance the purchase, by June 28. The bonds would close July 12, with the building sale closing the following day, if the city chooses to proceed.

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