[Update: The piece was updated after press to reflect city council’s vote at its Tuesday night meeting.]
WILMINGTON — A $1.7-million offer is on the table for three of the city’s surplus properties, addressed by Wilmington City Council Tuesday evening.
READ MORE: City and county reach ‘win-win’ on Northside Food Co-op land
Cape Fear Holdings, an LLC of a prominent local developer from Cape Fear Development, is requesting the purchase of 305, 315, and 319 Chestnut Street. Previously, the properties were Wilmington administrative buildings.
The city declared the 1.65 acres as surplus in February 2023 following the city’s $68-million purchase of the Skyline Center. Along with other underused city spaces, the sale of the properties are intended to offset the debt on the Skyline Center. The city demolished the building at 305 Chestnut in November; staff claimed a vacant parcel could be more desirable to buyers.
Cape Fear Holdings’ bid includes a potential restrictive covenant limiting the properties’ principal use to a retail grocery supermarket for at least 10 years — this requirement would also apply to any others submitting upset bids.
The proposal comes as residents in the area have complained for years about the lack of a grocer in the downtown market. The city’s 2020 Vision Plan also has listed a grocery store amenity needed in the area.
“The city has been after this use for quite some time,” Economic Development Director Aubrey Parsley told council Tuesday.
Cape Fear Development, the group behind the county’s public-private partnership of nearby Project Grace, first floated the idea of a downtown grocery store as potentially part of its ground-floor redevelopment. Port City Daily reached out to Brian Eckel from Cape Fear Development on the company’s bid for the properties, but did not get a response by press.
“Having considered the city’s strategic plans, as well as the trade-offs associated with other potential means of disposal, staff saw fit to bring this item forward for Council consideration,” according to the agenda.
The upset bid process includes a raised bid whereby any person offers to purchase real property at an amount exceeding the reported sale price or last upset bid. Per North Carolina law, upset bids must exceed the current price by 5%, but the city is requiring qualifying bids be 10% of the first $1,000 of the original offer and 5% of the remainder. After each new bid is received, other bidders are given 10 days to increase their offer until no new bids are received.
City council will have the option to accept the highest bid or reject them all.
On Monday, Wilmington Downtown Inc. issued a statement in support of converting the properties into a supermarket. It claims a “centrally located grocery store at Third and Chestnut would provide residents and businesses with easy access to fresh produce, local goods, and everyday essentials” while also creating “jobs and serve as a cornerstone of a healthier, more connected downtown community.”
Cape Fear Development has experience in this area and lists two Publix installations in the Cape Fear. This includes the store in Pine Valley and Carolina Beach, along with three more statewide.
Wilmington’s downtown, particularly the Northside, has been considered a food desert for more than 30 years. The nearest major grocery store is the Food Lion on Oleander Drive.
“The areas around Chestnut Street constitute as a food desert,” Parsley said.
However, New Hanover County and the City of Wilmington have partnered with the Northside Food Co-op to bring a grocery store near 10th and Fanning streets; the city provided the land, while the county was charged with funding the start-up. The two governing bodies have promised the project would come to fruition for years, but it only started to move forward when the New Hanover Community Endowment provided $6.8-million to the co-op in February.
The county is responsible for bankrolling the remaining $2.4 million. It has also committed to an additional $1.5 million to cushion operating expenses in the co-op’s first five years, as the grocery is not expected to turn profit in its first few years.
The cashflow would kick in if the co-op’s working fund balance falls below three months of operational expenses, which amounts to $500,000. At the end of the five years, the county could determine if continued support is needed.
When the commissioners agreed to those terms in March, chair Bill Rivenbark remarked: “Everybody needs to go and shop there.”
It is unclear how a move-in of a major grocery store on Chestnut Street would affect the co-op, to be located a mile away, but Commissioner Rob Zapple indicated in March it could affect the grocery’s ability to sustain itself.
“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.”
Mayor Pro Tem Clifford Barnett asked about how the food co-op could be affected and whether that’s been considered in this new bid.
“It’s good to have options,” Parsley said. “I don’t know if the two would compete, but we are open to talking with them. … as the city works through this process.”
Mayor Bill Saffo said he spoke with Wilmington Downtown Inc.’s CEO, Christina Haley, to ask if there are other examples statewide that have food co-ops in the vicinity of a big brand grocer. He relayed in both Raleigh and Asheville co-ops have succeeded and co-existed with other stores.
Council member Salette Andrews confirmed as much and thought the two would improve the “whole economy of the area.” She said when she lived in Carrboro, her residence was near the original Weaver Street Market, which also had a Harris Teeter close by.
“That Weaver Street did so well that it moved out into Hillsborough and Raleigh,” she said.
Council member Kevin Spears thought the stores would appease two demographics, with a higher end grocery store appealing to consumers closer to downtown. The Northside will have a more community-based option.
“Here’s an opportunity for all people that are involved again to step it up,” he said. “You want something that’s gonna be really cool and really effective on the Northside … And there’s no other way to say it: The people on the Northisde don’t want to be slighted.”
The Wilmington City Council passed the motion unanimously. The bid application will be posted on Dec. 4; bids will be due by 3 p.m. on Dec. 19.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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