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Wednesday, May 22, 2024

NHC, once again, defends Project Grace to LGC, vote set for October

New Hanover County Commissioner Dane Scalise, county manager Chris Coudriet and CFO Eric Credle speak at Tuesday’s LGC meeting.

NEW HANOVER COUNTY — In a month New Hanover County will receive a long-awaited answer on whether its financial plan for Project Grace is finally approved.

READ MORE: Project Grace appears on LGC agenda but for discussion only

ALSO: Another roadblock: LGC chair tells county ‘no’ to September vote on Project Grace financing

During the Local Government Commission’s Tuesday meeting, LGC chair and State Treasurer Dale Folwell committed to voting on financing for the county’s combined library and museum in downtown Wilmington at its Oct. 3 meeting. The LGC must approve local government’s issuance of debt; the price of Project Grace will not exceed $55.9 million.

Vocal about his opposition to the project — which will create 95,000 square feet of purpose-built public space — Folwell granted five minutes to the New Hanover County staff to plead its case. He also gave Diana Hill — longtime advocate and founder of Save Our Main Library, which is against demolishing the former Belk and Borst buildings for a new structure — a chance to rebut the county’s claims.

“There was never going to be an opportunity for opponents to speak without proponents,” Folwell said, alluding to rumors circling that he had indicated otherwise.

The newest commissioner Dane Scalise, who replaced Deb Hays in April after her sudden death, spoke on behalf of fellow commissioners, telling the LGC that four consecutive makeups of the board have unanimously been in support of the project. He also pointed out he had been involved with the project as a citizen since 2017, helping to host public meetings.

“We’ve been very transparent on ways to approach this project,” Scalise said.

Project Grace has been a concept for nine years, first coming to fruition in 2014 when the county purchased the downtown block surrounded by Grace, Chestnut, Second and Third streets, Scalise said. The goal is to combine the Cape Fear Museum and New Hanover County Main Library into one building, with a developer adding mixed-use space around it.

The commissioner pointed out the county took the feedback given by the LGC last year, when its previous iteration with Zimmer Development Group failed for lack of a second motion to vote. It was brought back to life in March with Cape Fear Development leading the helm and saving at least $4 million for taxpayers.

Scalise focused primarily on policy as justification of the county’s decisions to take on debt, pursue the project in its current form, and partner with a developer, who will then invest $30 million on half of the block.

“We think this is the right policy decision for New Hanover County,” Scalise said. “We respect that y’all have the role that you do to make sure we’re spending money wisely. We have the capacity to pay back the debt contemplated, and so thank you very much for suggesting we’ll have a vote in October. That’s really what we want. … We’re asking you to, please, approve this debt application.”

Scalise also reiterated from previous meetings the reason for the public-private partnership is to control what is built and in what timeframe by Cape Fear Development.

If all goes as planned, the county will break ground this year on the museum and library, which will take roughly 18 months. Once complete, the county will sell the southern parcel to CFD, which has agreed to start building some form of mixed-use space within 24 months.

“Why does one have to come with the other?” Folwell asked. “Why couldn’t that be subject to upset bid?”

Scalise iterated the need to redevelop and transform the block in a timely fashion, as opposed to someone buying it with the possibility of it staying empty for years.

“The concept behind Project Grace is to deliberately redevelop the entire city block,” he said. “And state law, as we understand it, does not allow us to put conditions on the upset bid process.”

“Sounds a little inelegant, slightly snarky — you built your new county building beside a men’s club,” Folwell replied. “So I don’t see much evidence you care about the development next to you if you build your county building next to a strip club.” 

Folwell was referring to the county’s new government center. The 137,000-square-foot space is located on a tract of land which housed the former government center for 20 years; it’s located adjacent to Ten Pin Alley bowling center and Cheetah Premier Gentlemen’s Club.

The government center project also was a private-partnership with Cape Fear FD Stonewater. It faced scrutiny from the treasurer, who asked the county to amend its first proposal. The county agreed to issue its own debt for construction of the building, saving roughly $5 million.

The state treasurer — who is making a 2024 gubernatorial run — also asked Scalise, who was joined at the table with county manager Chris Coudriet and chief financial officer Eric Credle, if staff would consider a bid process, if someone pointed out a different way to control what’s built.

Scalise noted the county trusts its legal counsel and said it was a policy decision to bring the entire vision to fruition.

“Over the course of years, 13 different commissioners have reviewed this and voted in favor of it because all of us, unanimously, bipartisanly, recognized the potential this project presents for New Hanover County,” he added.

Secretary of Revenue and LGC member Ronald Penny clarified if voters had an issue with the project they had multiple opportunities to vote for new commissioners.

Hill was given 10 minutes to speak, since Scalise and Credle’s presentation went over the allotted time, calling the project “ill-conceived.” She talked about how the library will be downsized and the current structure does not need to be demolished.

“Hundreds, thousands in New Hanover County feel the same way I do, and if they want to pretend they don’t believe it, put it on a ballot and see how many people want the main library downsized and the museum to be part-time exhibit space,” she said Tuesday.

Coudriet noted usable library space in the building now is about 30,000 square feet, versus 40,000 that will be available for programming in the new design.

Hill claimed only “realtors, business people and developers” supported the project.

“I’ve never seen anyone work so hard to make something unnecessary,” she said. “It’s time, in my opinion, past time for the county to start working for the residents as they promised they would after the New Hanover High shooting.”

LGC member John Burns asked for clarification if the county’s application was complete, which it is. He also asked if the county thought it could afford to take on the project; Scalise noted the county’s triple A bond rating. He confirmed the county has publicly stated it will not impose a tax increase to cover it; New Hanover County lowered its property tax rate for fiscal year 2024.

LGC member Mike Philbeck inquired if county staff deemed Project Grace necessary or expedient — two things factored into decisions by the board.

“The board considered every way possible on this and had made a determination because of its credit rating, its ability to meet debt obligations, it is in the best interest of our community to issue debt,” Coudriet said.

He pointed to the county’s fund balance and $300 million escrow account from the sale of the hospital to Novant as earning more in interest, 5%, than the interest the county would take on to issue debt, around 3.8%.

“In every way it’s expedient and in the best interest of the taxpayer to preserve our cash balance and align our expenses with revenues over the course of 20 years,” Coudriet said.

The project was deemed “critical and necessary” by Scalise to the economic development of the city.

“Why are you here?” LGC member Paul Butler Jr. bluntly asked county staff, adding the county can do whatever it wants with cash on hand and could avoid the LGC altogether.

“The items are policy decisions the New Hanover County commissioner made and we considered these points and elected to move forward because state law says we can,” Scalise said. “We follow the law and we want that debt. We came to the LGC with a policy decision to fund this in this matter. We’re asking you to confirm our financials are in order, we have the ability to pay it back and allow the application that’s been submitted.”

After the meeting, the commissioners released a joint statement:

“We appreciate the Local Government Commission’s thoughtful consideration of Project Grace and the opportunity to engage in today’s robust and in-depth dialogue. This initiative continues to have unanimous, bipartisan support and is crucial for New Hanover County’s progress. We eagerly await the LGC’s final review and a vote in October.”

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