A recent appraisal the City of Wilmington commissioned for the riverside land it plans to sell for an Embassy Suites’ development figures a value that is more than double the publicly proposed going price.
That has thickened the concern from a neighboring hotel owner that the city is selling the land intentionally low, allegedly to give the developer an illegitimate subsidy–an angle the city continues to refute.
Sotherly Hotels, owner of the Hilton Wilmington Riverside on Water Street, in walking distance from the land eyed for the Embassy Suites, has for several months challenged the city’s reported sale offer of $579,000. Slated for Virginia-based developer Harmony Hospitality, it’s about 33,000 square feet of waterfront land adjacent to the city-owned Wilmington Convention Center. As planned, the Embassy Suites would serve as the convention center’s private counterpart.
An appraisal commissioned by the city this past September opines a market land value of $1.32 million, which attorney Matthew Davis, representing Sotherly, said supports his client’s repeated challenges.
“Such a deal [for $579,000] would not only cost taxpayers more than $800,000 in lost profits, but would also land the city on the wrong side of the consent judgment that prohibits it from subsidizing the convention center hotel,” Davis said.
That consent judgment landed in August 2006 to resolve disputes between hotel groups and the city over the convention center plan. The order essentially came out to a lineup of conditions the city would have to follow with the center’s development and plans for associated accommodations.
“No public funds of any nature shall be used to acquire, build, equip, operate or otherwise underwrite or subsidize the hotel or its operations (including shared facilities),” it said. The only exception is a shared entrance or lobby.
But the city, as long as Sotherly has challenged it, has refuted the claims that it has acted outside the order and has said the reported sale-offer is legitimate and fair. As put in September by City Attorney Bill Wolak, “It is the city’s position that the value of the site has been determined in a manner consistent with the consent judgment and applicable law.”
The offer price isn’t final, the city said Tuesday. It provided Port City Daily the following comment: “At this point, there has been no finalized agreement or negotiated price for the land the city owns adjacent to the convention center. As a matter of course, appraisals are provided as professional opinion, but the final value of properties are generally determined by what buyers and sellers both agree upon.”
Davis said he had not heard whether a renegotiated contract price was coming down the pike. “As things stand, the only winners in this deal would be Harmony Hospitality and its foreign investors,” he said.
Harmony’s Embassy Suites plan was recently approved for foreign investments per the federal EB-5 program, also known as the Immigrant Investor Program. Administered by U.S. Citizenship and Immigration Services, the program affords visas to foreign investors for the purposes of domestic economic development. Harmony had waited well beyond a year for the approval.
With that approval in place, the city may move ahead with a land sale to Harmony so the project can come to long-anticipated fruition. With the convention center funded by the room occupancy tax, the new hotel would contribute revenue as well improve the convention center’s marketing for events, ideally.
City spokeswoman Malissa Talbert on Tuesday said she had not heard any date set for Wilmington City Council to consider a deal with Harmony.
Council has two regular meetings scheduled in January, on the 6th and 21st.
The city’s $1.32 million appraisal is the second to surface for the riverside land recently. In September, an appraisal commissioned by Sotherly itself figured $2.8 million was the fair value.
New Hanover County tax records show a value of $875,500.
The city council was expected to approve a land deal in early November but has held off per undisclosed legal considerations.
Past stories:
Convention center hotel deal still under review
Terms of convention center hotel land sale headed to city council
Hilton still wants clarification from city on hotel land value
City turns down Hilton’s proposal for new appraisal of convention center hotel land
Assertions from Hilton owners postpone convention center hotel update expected Tuesday
Embassy Suites developers express optimism, gain another extension for Wilmington hotel
Franchise approval lands for Embassy Suites downtown
Details emerge on convention center hotel
Ben Brown is a news reporter at Port City Daily. Reach him at ben.b@hometownwilmington.com or (910) 772-6335. On Twitter: @benbrownmedia
