WILMINGTON — Millions of dollars of upfit on the Skyline Center is moving forward despite protest from one council member Tuesday.
READ MORE: City considers 2.5-cent tax increase, as Skyline Center makes up 10% of budget
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The Wilmington City Council approved nearly $6.3 million for Montieth Construction to oversee the city department upgrades to 929 N. Front St.
The contract includes the customer service center on the first floor, to include a planning and community development counter, cashier’s office, space for the SafeLight program, as well as CFPUA.
The third floor will undergo office and suite modifications, including for the city clerk, fire marshal, Wilmington Police Department STING Center and police administration.
Council chambers will also be created on the first floor.
The ordinance passed 6-1, with council member Luke Waddell dissenting. However, the item will return to council at its next meeting for second reading; a motion to waive the formality lacked unanimous approval and failed.
“I feel it’s a bit premature to appropriate these funds prior to having even our first budget work session of the year,” Waddell said.
The city purchased the nine-floor building in July 2023 to consolidate city departments under roof. It was a $68-million feat that required the city to shift 1.12 cents of its tax rate to pay for debt service, a payment of $8.5 million out of its general fund and financing with low-obligation bonds.
The improvements to council spaces in the Skyline Center were postponed last budget cycle, at the behest of Waddell, as the city evaluated its new $74-million capital improvement plan. Because it had maxed out its debt capacity on the Skyline Center purchase, the city could not issue more debt to cover its long list of capital needs, which totals $487 million.
Waddell suggested council postpone the city-occupied space improvements to shore up the $3 million in FY24, which would cover half the annual amount generated by a 2.5 cents added to the new property tax.
Ultimately, council voted in a 2.5-cent increase to the property tax, a year after purchasing the Skyline Center after insisting to constituents taxes would not go up to pay for it.
Staff said one-time funding for the projects has been identified within the current FY25 budget through various opportunities that recently became available. These include reimbursements from FEMA for Hurricanes Isaias and Florence totaling $6 million, of which $1.8 million can be used for the upfits. The city is also recovering $508,000 from the Wilmington Housing Authority, unused money from a city-issued loan.
Funding is also being redirected from the Wilmington Convention Center fund with excess amounts shoring up $1.3 million.
Staff also report the general fund is estimated to close with an unassigned fund balance of 28% when policy only requires it to be 25%. This means the 3%, or $2.8 million, can be appropriated to the Skyline upfit.
“This does not affect our ongoing operations for this current year,” Deputy City Manager Chad McEwen said to council Tuesday.
Furthermore, McEwen said staff had whittled down the overall construction price to $9 million.
Waddell commended staff’s work and said the payment plan was important to have in place when the “appropriate time arises,” but advocated the city pump its breaks until after the first FY26 budget session, set for Nov. 7.
“I do not understand, nor do I agree with, the urgency to move this project forward before this council has any idea what the next budget looks like, no idea whatsoever,” Waddell said.
In response to Waddell’s concerns, McEwen explained waiting another month could run the risk of price escalations.
Council member Kevin Spears joked the city clerk, Penny Spicer Sidbury, had been waiting for quite a while for her office’s permanent space. McEwen said she has been “very patient but vocal at the same time.”
“This helps to alleviate some of the pressure we put on the city clerk as it relates to the capabilities of her job,” Spears said.
McEwen explained the clerk’s office is not in a secured vault area, which created logistical challenges for accessing records.
Additionally, the upgrades will free up two prime spaces on the first floor for leasing; current tenants sharing the building with the city include Thermo Fisher, Wilmington and Beaches Convention and Visitors Bureau, Local Government Federal Credit Union and LINC.
“We anticipate the rent for those two areas to be considerable, to be very competitive in the building — up front, behind the elevators, potentially with the ability to have direct access out of that,” McEwen said. “Several different tenants have looked at that and voiced a desire.”
So far, the Skyline Center leases bring in $2.4 million annually, two-thirds the cost of building operations.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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