[Update: Wilmington City Council unanimously approved moving ahead with the sealed bid process for 115 N. Third and 210 Chestnut streets.]
WILMINGTON — Less than two years after being purchased, a Third Street building owned by the city could soon be back on the market.
READ MORE: ‘Ain’t gonna give them away’: Council questions staff on surplus sales after Thermo Fisher buy
ALSO: City purchases $11M Harrelson Building for additional office space
At Wilmington City Council’s Tuesday meeting, the board will vote on whether to move forward with advertising the Harrelson Building, 115 N. Third St. and its associated parking lot, 210 Chestnut St., for sale via a sealed bid process.
Economic development director Aubrey Parsley told council at an Aug. 14 agenda briefing, the sealed bid was the preferred method of offloading the properties because staff can better control the schedule of the sale with a finite deadline and also regulate the information disseminated.
By comparison, an upset bid can be ongoing.
“Once an initial bid has been accepted, new bids are accepted at two-week intervals until there is a single bid remaining,” city spokesperson Lauren Edwards said.
The properties were declared surplus in February in anticipation of the city’s purchase of its new headquarters, the former Thermo Fisher building at N. Front Street. It closed on the 12-story building and 12.5-acre campus in July for $68 million.
The sale proceeds are expected to offset the debt incurred on the city’s purchase, which includes $28 million in interest and taxable debt.
This property is one of nine to be sold and currently occupied by city staff. It’s not guaranteed all properties will be conducted via a sealed-bid process; each will be approached on a case-by-case basis, according to Edwards.
Deputy city manager Chad McEwen told the Local Government Commission in February, selling the surplus properties could bring in more than $19 million in potential revenue.
According to the city’s resolution on the agenda item, staff also recommends the property be the first sale since there are relatively few employees working there in positions that are not public-facing.
Three full departments and two partial departments — communications, budget, human resources, fire marshal, and a portion of IT — are located in the office space, known as the Harrelson Building. Built in 1990, the 0.66-acre Harrelson Building is strategically located adjacent to City Hall.
The city purchased 115 N. Third and 210 Chestnut streets for just over $11 million in April 2022 as a temporary fix to its space issues. The city operates in multiple buildings and has been looking for ways to consolidate departments and grow its office space, which is what eventually led to the Thermo Fisher purchase.
When the Harrelson Building was purchased, city employees were already using two of the five floors at 115 N. Third St. The purchase saved the city $420,000 in annual rent to lease a portion of space.
A city spokesperson said in April 2022 it was a valuable acquisition to meet future space needs in an “efficient and financially responsible way.”
The 50,750-square-foot building still has four additional tenants as well, providing nearly $115,000 in rental income to the city for fiscal year 2023.
“The status of those leases post-sale will depend on the terms of the lease and the desires of the future owner,” Edwards said.
The value of the building has not been publicly shared by the city, but New Hanover County property records show an appraised tax value of $6.7 million, plus $267,500 for the parking lot.
With council’s approval at Tuesday night’s meeting, the sealed bid process for 115 N. Third St. and 210 Chestnut St. would begin advertising this week and remain open until Nov. 6. The bid materials are to include a 120-day leaseback agreement to give the city ample time to vacate the property and transition into the 12-story building less than a mile away.
Thereafter, city council will vote Nov. 21 to either award the highest bidder or reject them all.
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