The following is an amended version of a story published Friday morning. It clarifies the parties involved with the latest legal filing.
A new challenge has landed in the already lengthy convention center hotel effort.
A plaintiff behind the 2006 consent judgment regulating the private hotel’s development is filing a new motion alleging the City of Wilmington’s recently approved sale of land to developer Harmony Hospitality fails to comply with the order.
The motion requests that a judge compel the City of Wilmington to appear in court to defend itself against contempt of court allegations in relation to the order.
The plaintiff is resident Glenn Wells, listed in the motion as a “taxpayer.” The motion alleges the sale documents “fail to conform to the consent order in one or more respects, including a purchase price of $578,200.00, which is substantially less than the fair market value of the property….”
Saying the fair market value is actually $1.32 million, per a city-commissioned appraisal of the land, the motion argues that nearly $742,000 in public funds are “apparently being used to underwrite or subsidize the hotel, in violation of the order.”
The City of Wilmington issued a statement Friday morning:
“We are very disappointed to learn about this motion, especially since there has been such overwhelming public support from citizens across our community who want to see this important economic development project completed. The City believes very strongly that we are in full compliance with all state laws and the 2006 consent decree and we are confident that the court will rule in our favor.”
The plaintiff, who according to the city is filing the motion in New Hanover County Superior Court today, is represented by attorney E.D. Gaskins Jr. of the Everett Gaskins Hancock firm of Raleigh.
Wilmington City Council on Feb. 4, after a long and almost entirely supportive public hearing, unanimously authorized the sale of slightly less than an acre of riverfront land immediately adjacent to the Wilmington Convention Center. The buyer, Harmony Hospitality, a hotel development group from Virginia, plans to erect an Embassy Suites there.
The approval was a major milestone. Work to recruit a private hotel with the city-built convention center, which opened in 2011, began several years ago and faced numerous checkpoints, including the filing that led to the 2006 consent judgment.
The consent judgment essentially amounts to a list of requirements the city would have to follow with a convention center hotel. One of its foremost themes is in how public funds can interact with the private project. It forbids public funds from underwriting or subsidizing the hotel, which Wells and fellow plaintiffs underline in their new motion.
It’s the same argument that an attorney representing the Hilton Wilmington Riverside made to the city in the months leading up to the Feb. 4 land sale authorization. Matthew Davis, representing Sotherly Hotels, submitted numerous letters and information requests to the city with the contention that the proposed $578,200 sale price was far too low and, as such, would be a subsidy or underwriting for Harmony.
The city all along said its actions were compliant with the order and law.
The city explained it set its sale price pursuant to a state law that deals with local government assistance in economic development. The $578,280, said the city, reflects the property value in consideration of various positive effects, like jobs, wages paid, and prospective tax revenues in the city, attributable to the hotel.
The Embassy Suites as planned would consist of 161,719 square feet total, stand 95 feet tall and include a 5,900-square-foot restaurant and 6,600 square feet of meeting space. It would employ 155 under its roof with an average wage of $13 an hour.
According to a presentation from City Manager Sterling Cheatham, the city will receive $6.4 million in revenues over the next 10 years from the Embassy Suites.
The city in a release Friday morning said it is limited in what else it can say as the matter plays out.
Ben Brown is a news reporter at Port City Daily. Reach him at [email protected] or (910) 772-6335. On Twitter: @benbrownmedia
