WILMINGTON — When state laws regarding the sale of surplus government property were made the idea was only nonprofit businesses could be mission-oriented, therefore, a direct sale without an upset bid process could only be completed to these types of businesses. So what happens when you want a piece of real estate the government owns and is ready to declare as surplus but you operate a for-profit business that also has a social mission?
For Tru Colors founder George Taylor, the answer is to start a nonprofit and hopefully convince city leaders to sell the property directly to him instead of going through the upset bid, or public auction process.
Taylor has been working on acquiring the former WAVE Transit station located at 1110 Castle Street for more than eight months now and time is running short for him to start working on a Tru Colors headquarter. That is why, in January, Taylor started the nonprofit Tru Impact.
According to Taylor, “TRU Impact is a non-profit organization based in Wilmington NC committed to its mission of combatting street violence, generational poverty, and racial divisiveness across America. Tru Impact provides facilities and services to organizations that are executing at a high level in the areas that further the TRU Impact mission.”
Taylor admits that it looks like he started a nonprofit group simply to bypass the upset bid process and there is a simple explanation for that — he did. There are two reasons why Taylor wants to bypass the bidding process, one, the process of upset bids can take a lot of time, something Taylor does not have.
Secondly, when the city does a direct sale to a group that provides a “public purpose,” officials get to control what is going to go into that location. If the city were to make the property available to the public for sale, it would go to the highest bidder and the Southside Community could end up with something like a mattress store on their corner, Taylor said.
But while state laws do allow for the government to fully subsidize property sales to nonprofits, Taylor isn’t looking for a handout, instead, he is offering to pay the full market price which would be determined by a third-party appraiser.
The City of Wilmington has been working with Taylor for several months trying to find a way to possibly work with him and get TRU Colors the property.
City Attorney John Joye has been working with Taylor to see if his group would meet the requirements as laid out by state law to be considered as serving a public purpose.
The Castle Street property
The property in question used to be a WAVE Transit bus yard and has since ceased to be used. The city had originally planned to give the property to the Southside Community Development Corporation (CDC) but after years without bringing forward a feasible plan for the property the city decided it was time to take things in a new direction.
On Monday, during City Council’s agenda briefing councilmembers discussed the plans for the property and whether or not to move forward with a straight sale of the property.
According to state law local governments can do a few things when it comes to surplus property, they can sell it through a public auction or through an upset bid process and get the highest dollar amount for their taxpayers, or they have the option to sell the property to “entities carrying out a public purpose.”
So what exactly does TRU Colors do?
TRU Colors is a planned brewery that would employ active gang members in the Wilmington area with the intention of helping to end gang violence — but it is not a non-profit, in fact, when Port City Daily interviewed Taylor in 2018, he made it clear his goal was to sell beer first and foremost.
When asked by PCD, “Is it your end goal to get people out of gangs or gang life?” Taylor said, “No, our first goal is to sell beer, we are a for-profit company … Secondarily we have a very strong commitment to our social mission which is to unite rival gangs and stop the street violence across the country.”
But over the past year that mission for Taylor has changed, he realized that focusing on selling beer was only one small portion of the company. The reason he was so focused on the product was to ensure the company was fully self-sustaining and did not have to rely on donations or grants to fund itself.
Taylor said TRU Impact will provide several services to the community it serves including, developing the property and enhancing the existing buildings and increasing space to about 30,000-square-feet. Create 50 or more living wage jobs, these are jobs Taylor said will start at $30,000 and go up to $90,000.
He also wants to provide career and life-skills education that will lead to stability for the community, and of course, provide services that will reduce violence in the community.
While TRU Impact is not legally connected to TRU Colors, the brewery would be the main tenant in the location, according to Taylor.
According to Taylor, “TRU Colors is working to launch breweries/brewpubs in Wilmington and select cities across the country. In addition, TRU Colors has partnered with a large-scale brewery to brew, package and distribute its flagship beer at scale.”
Not the only contenders
For those wondering, Taylor and TRU Impact are not the only ones who have their eyes on the Castle Street property. Other interested non-profits in the property include Nourish NC, Special Pedals, and the Wilmington Historic Foundation.
There are also four private parties interested in the property, including Cape Fear Commercial, according to city emails.
But according to Erris Dunston, Asst to the City Manager for Economic Development, the city has not even received proposals from the other organizations because they are “waiting on the wishes of council on how to move forward.”
Despite all the efforts made by the city to work with Taylor and TRU Impact, on Monday there was some hesitation from some of the City Council. The item on City Council’s agenda is actually to move forward with the public upset bid process — not to sell the property to Taylor and his group.
For Paul Lawler, this is the preferable way to do things.
“I understand that what’s on the calendar for Tuesday night would be a straight public sale where it would go to the highest bidder whoever that might be … I like that approach, it’s clean, it’s simple,” Lawler said.
He wasn’t the only one to voice reservations about the possible sale to TRU Impact.
Councilman Neil Anderson said, “I wouldn’t want to be a part of subsidizing… I understand what their goal is and who they are employing, I do, but that bothers me.”
But in this case, the offer from Tru Impact is to pay fair market value for the property — what that price might look like, Joye said had not been established yet.
Councilman Charlie Rivenbark summed up the deal in his own words saying, “I think what I am hearing is they would offer to pay fair market value and what they are trying to get us to do is to circumvent the upset bid process.”
Joye responded by saying, “Correct.”
Council will vote on the issue on Tuesday evening at its regular City Council meeting.
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