Friday, April 12, 2024

County may be asked to pay for food co-op land after backtracking on deed

The location on the Northside grocery store project. (Port City Daily/Shea Carver)

NEW HANOVER COUNTY — The New Hanover County commissioners want the City of Wilmington to reconvey land for the Northside Food Co-op with no strings attached, but the city council may have a different request.

READ MORE: Commissioners agree to $1.5M cashflow cushion for Northside Food Co-op, some take issue with city land deal

In 2022, the City of Wilmington donated land worth $113,000 to the county for construction of the Northside Food Co-op grocery store. However, the deed states if the property should cease to be used as a grocery store, the land will revert back to city ownership.

Though the land has already been deeded, Commissioners Dane Scalise and LeAnn Pierce, not on the board when the deal was made, took issue last week about investing $9 million in a new building on property the county doesn’t own. The county is putting forth $2.5 million supplemented by almost $7 million from the New Hanover Community endowment.

The two commissioners asked county manager Chris Coudriet last week to re-approach the city about removing its “reverter clause” from the deed. Coudriet will present the commissioners’ request before the city council next week. 

Port City Daily obtained emails between Coudriet and city manager Tony Caudle indicating council members may ask the county to purchase the property at 10th and Post streets instead

City council member Luke Waddell told Port City Daily Tuesday he was the one to put the idea on the table. 

“My initial response to the [county’s] request was: ‘Is the county anticipating paying fair market value for the property and what does that look like?’” Waddell said. 

The Northside Food Co-op, established with bylaws and a board of directors in 2020, has been pushing for a grocery store on the Northside, which is considered a food desert. Two years ago, the county dedicated $2.15 million to construct a new building onsite, but by 2023, costs had risen to $7 million and the county said it would need grants to support the project. It got one this year when the New Hanover Community Endowment announced it would contribute $6.8 million. 

Pierce and Scalise suggested it wasn’t good business practice to make a large investment with the reverter clause in the deed. Their concerns rose after the board was informed at its March 21 meeting of the thin margins and early losses expected of the venture. 

Commissioners were poised to sign a memorandum of understanding to clearly lay out its responsibilities. This included subsidizing $1.5 million to the store’s bottom line in the first five years, if three months worth of operating capital drops below $500,000. 

At last week’s commissioner meeting, Pierce noted even though the city and county have a good working relationship now, that may not always be the case. 

“Friends today, who knows what tomorrow,” she said. 

She was the only commissioner who voted against signing the MOU, even after Commissioner Jonathan Barfield requested to amend the motion over Scalise’s suggestion to push the vote into April. Barfield suggested passing the MOU, contingent upon county management working out details that the property would not revert back to the city if it wasn’t a grocery store.

​​At the end of the meeting, Barfield turned to council members Clifford Barnett and David Joyner in the audience and asked: “Can you help us out?” 

Both council members told PCD they are committed to finding a win-win for everybody and didn’t want to stand in the way of hard work that has gone in to the project. 

“We will do what we need to do to make sure that the Northside has a food court and we want to protect the investment that the city is making, as well,” Barnett said. “So we’re still working on the language. We’ll see what is presented to us when we meet on Tuesday.” 

Still, Joyner said he was taken aback by the county’s request. 

“I’m just blown away that this was executed in 2022 and people are now coming to the table saying this is a surprise,” Joyner said.

Representing the commissioners, Coudriet will ask the city to remove the reversion clause in the conveyance at next week’s council meeting. Some members of council are more open to it than others.

“Why would we do it?” council member Kevin Spears asked on a phone call with PCD. 

He continued by comparing the action to someone borrowing his bike, then never bringing it back. 

“If the deal is about creating a grocery store, and our part of the deal was to donate the land, and they were to provide the funds for the grocery store, if it doesn’t become a grocery store, why would they keep our land?” Spears questioned. 

He was also less open to the idea of the county purchasing the property, telling PCD he is supportive of the original agreement and doesn’t want to compromise. 

“It just makes one think maybe they don’t want to do a grocery store anymore,” Spears said. “Maybe they want some free land. And I don’t think the City of Wilmington is in the position to give away free land.” 

Councilmember Charlie Rivenbark also didn’t like the idea of complying with the county’s request. 

“It is not the time to take the reversion clause out after everything’s been done,” Rivenbark said. 

To undo the current agreement, the county would have to deed the land back to the city and undergo a rewrite without the reversion clause, then be resent to the county for concurrence. 

Rivenbark told PCD the clause shouldn’t have been in there in the first place if the parties didn’t agree with it. He also would entertain the county purchasing the property, but said he would not elaborate further on his opinion.

Before he takes any stance, Waddell said he wanted to gauge if his fellow council members were in favor of a property purchase. 

“If so, we get an appraisal, the county gets an appraisal, and we meet in the middle, they purchase the property and move on with what I’m sure will be a great project,” Waddell said. 

But what does the county think? 

Commissioners Pierce, Scalise and Zapple did not rule out the land-buy request when contacted by PCD. 

“It’s a no-brainer — yes, it makes sense to me that we would purchase the property,” Pierce said. 

Scalise and Zapple were a bit more hesitant, the former saying he didn’t know how to respond to the city’s purchase suggestion. 

Zapple said he thought the county and the city’s contributions to the Northside Food Co-op seemed a little out of balance under the current agreement. 

“We’ll be there for five years, but [if] after five years we won’t, what happens if they can’t make it?” Zapple said. “Let’s say, all of a sudden, a Food Lion and Harris Teeter move in three blocks [away]. A gazillion things can happen.” 

Though, the commissioner admitted he learned a reversion clause is not unusual in land conveyances. He compared its conditions on Habitat for Humanity projects, in that they remain single-family affordable homes in perpetuity, less the land be returned to the municipality that donated it.

“I’m open to any solution here that is equitable,” Zapple said. “We’ll see.”

City council will hear the formal presentation from the county on April 2.

“We’re good partners with the city,” Scalise told PCD on Tuesday. “I would imagine that they would also want this co-op grocery store to be in the city and there’s an easy way to achieve it.”


Reach journalist Brenna Flanagan at brenna@localdailymedia.com.

Want to read more from PCD? Subscribe now and then sign up for our morning newsletter, Wilmington Wire, and get the headlines delivered to your inbox every morning.

Related Articles