Monday, September 25, 2023

With financing technicalities sorted out, Pender County can move forward with expanded jail

Pender County is hoping to break ground later this year on a combined law enforcement center and expanded jail. (Courtesy Moseley Architects)

PENDER COUNTY — Plans for a new jail and law enforcement center in Burgaw hit a snag, delaying the project by at least six months. It now will be moving forward with the help of a North Carolina legislator.

READ MORE: Pender County looks for ways to cut costs on rising $46M new jail

Pender County approved plans for its new headquarters in October 2021; the multi-use law enforcement center will house the sheriff’s office, 911 center and a jail double the size of the current one. 

It will be located on land donated by the state. The county hoped to finance the nearly $48 million project with a USDA loan, but some issues arose per wording on the land transfer deed.

In 2019 the state agreed to gift the county 100-acres of land northeast of Burgaw town square, sandwiched between Old Savannah Road and Penderlea Highway. The property is part of a larger parcel where the current jail is located.

The donation came with a clause that would revert ownership to the state if the property was no longer used as its intended purpose to house the law enforcement center.

According to county staff attorney Patrick Buffkin, the USDA was concerned that provision would take priority over the deed of trust needed to secure a loan on the property.

“The best way to think about this is like a mortgage on your house,” Buffkin explained. “The bank wants first priority to take the property if you default on your mortgage payments.”

Rep. Carson Smith (R-Onslow, Pender) — who helped make the land transfer possible — introduced a bill in the 2023 General Assembly session clearing up the language. 

House Bill 412 unanimously cleared the House on April 25 and the Senate on iThursday.

The county hoped to move forward with bidding out the contract in April — delayed now until November — but the process was hung up due to the technicality.

When signed into law, it will revise the deed restriction to facilitate financing of construction. Essentially, the bill clarifies the state’s reversionary clause would be secondary to the USDA’s interest.

“[It] makes clear the deed of trust/mortgage instrument gives USDA, as the lender, first priority in the event of default,” Buffkin said. “Clearly, the county won’t allow a default to happen, but this change is required for USDA to authorize the funding for the project.”

The other reason this is a priority for the county is the USDA offers the “most favorable” terms for borrowing. County manager David Andrews explained USDA interest rates are estimated at about 1% lower than conventional loans, which on average are paid back within 20 years. The USDA extends the payback period to more than 30 years.

Andrews confirmed the design phase is complete and staff will soon be working on bid documents to secure a contractor. Construction documents should be complete in July.

The county is looking to replace its aging, antiquated detention center as there has been limited space for its growing number of inmates. In 2018, the Pender County Sheriff’s Office transported 1,042 inmates to out-of-county jail facilities, using 1,600 man-hours, 725 transports, and a total traveled distance of almost 78,000 miles across the state.

The 1978 jail has 92 beds, and a feasibility study done by Moseley Architects showed an additional 153 beds will be needed by 2045.

As a result, the firm is proposing a 96,000-square-foot building with 242 beds. Its core facilities — kitchen, cafeteria and laundry services — will accommodate up to 350 beds.

A study done by Moseley showed the current jail would be near impossible to expand, based on its land layout and surrounding structures. With the new facility located on the same 350-acre tract of land as the current, there will be ample room for future growth.

While the county awaits finalization of construction documents, it has leased the land to a farm. Layout designs presented to commissioners in April 2022 show the preferred location places the building closer to Old Savannah Road, leaving the possible option to continue leasing out a fraction of the property for additional income.

The county hopes to award a contract by fall to break ground later this year. It’s anticipated the project will take two years to build.

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