Friday, August 19, 2022

Leland approves $525k incentive for apartment complex, two hours after deal is made public

An economic incentive deal was unveiled Thursday that involves development plans that would bring the town an estimated 1,400 new residents to live in 708 units. In turn, Leland will pay Hawthorne Waterside LLC a total of $525,000 pending completion of the project's two phases.

According to now-approved economic incentive and development agreement, a 57-acre parcel adjacent to Brunswick Forest off Highway 17 will soon bring an estimated 1,400 new residents to Leland. (Port City Daily graphic/Courtesy Town of Leland)
According to an economic incentive and development agreement approved Thursday, a 57-acre parcel adjacent to Brunswick Forest off Highway 17 will soon bring an estimated 1,400 new residents to Leland. (Port City Daily graphic/Courtesy Town of Leland)

LELAND — Though town council members had just hours to review completed economic development agreement documents that include a $525,000 incentive deal for a newly-annexed property off Highway 17, Leland Town Council approved the agreements 4-1.

In addition to the economic incentive package for a 57-acre parcel on Highway 17, council members also approved rezoning the lot — by a 4-1 vote — and unanimously approved annexing it into town limits at the same meeting.

Related: Brunswick Forest’s developer put the brakes on SAD process, no plans to move forward

Plans, ownership

At 708 units, the project will bring an estimated 1,400 more people to Leland.

Represented by former North Carolina Senator Michael Lee, Greensboro-based Evolve Companies will develop the 57-acre property. It’s currently owned by ERH Investments LLC, whose registered agent is Ellan Hibbard, according to the North Carolina Secretary of State. Hibbard owns the Starway Flea Market off Carolina Beach Road in Wilmington and several surrounding parcels, New Hanover County property records show.

ERH Investments will sell the property to Evolve Companies, Vidmar told Council Thursday. Developer Mike Winstead, a manager of Evolve Companies, will oversee the development, according to Vidmar. Hawthorne Waterside LLC, a part of Evolve Companies, will be the ownership entity of the development.

A voluntary annexation and zoning petition were first submitted by ERH Investments in August 2018. Town documents show the company withdrew its application on Oct. 8 with “no explanation,” but requested the right to reinstate the petition at a later date.

On Thursday, Leland approved rezoning the 57-acre parcel from Commercial Light Density to Multifamily District. Surrounding parcels and a majority of land in the area are currently zoned Commercial Light Density. The rezoning gives Evolve Companies the ability to develop residential property at a maximum density of 16 units per acre.

Timing

Completed documents for two agreements — an economic development incentive and a development agreement — were not made available to council until after 4 p.m. Thursday for a meeting that began at 6 p.m. Councilors discussed the agreements for approximately 17 minutes over two public hearings before approving them.

At an agenda briefing meeting Monday, Gary Vidmar, Leland’s economic and community development director, said public hearings on the agreements and supplemental documentation would be added to the agenda later on, as the final terms were still being negotiated. Public hearings on the agreements were appropriately advertised, Leland’s manager David Hollis added at the Monday meeting. According to agenda item documents, the public hearing on the development agreement was properly advertised in The StarNews.

“I apologize for getting that development agreement in your hards late in the day today,” Vidmar said to council on Thursday. “We were fine tuning that agreement literally until the last few hours.”

Both agreements and public hearings pertain to the same 42-page document, “Development and Economic Development Agreement” with Hawthorne Waterside LLC.  Hearings for the items are governed by different statutes, according to Leland’s attorney, Brian Edes.

At the meeting, Edes clarified the agreements were not something that came “into fruition over the last couple days.” Instead, he said, they had been in the works for a couple months.

Incentive agreement

Leland will pay Hawthorne Waterside LLC a total of $525,000 upon completion of the entire development. Payments will be made in two phases, contingent upon certificates of occupancy issued to Hawthorne Waterside. Appropriations will derive from the town’s general fund, town documents show.

The first installment, a $400,000 lump-sum payment, will be delivered following the completion of phase one. Phase one includes eleven buildings and 276 units. After phase two is completed, bringing an additional 432 units, the town will pay Hawthorne Waterside $125,000.

Leland’s staff estimates after both phases are completed, annual sales tax revenue will bring the town an estimated $344,000. That’s calculated at an annual rate of sales tax revenue of $24,300 per 100 people, Vidmar said.

Currently valued at $1.2 million, according to Vidmar, development of the property will result in a roughly $87 million incremental increase in market value. This will bring the town an added annual ad valorem tax increase of $183,000 upon completion of both phases. Counting both sales and ad valorem tax increases after both phases are complete, the development will bring the town an estimated total of $527,000 in tax revenue each year.

Approval

Appropriations will not be made until the 2020-2021 budget phase, Vidmar estimated, because they are not due until phase one is complete. Public hearings will take place before each appropriation is transferred, he said.

As Evolve Companies attorney, Lee said phase one will be completed by March 2021, according to the agreement. The project is still in the Traffic Impact Analysis (TIA) review process, Lee said. With entrances on Highway 17 and Hewett-Burton Road, entrances are subject to change pending input from the North Carolina Department of Transporation.

Water will be provided by Brunswick County, the agreement guarantees. Leland will provide sewer, upon completion of its Highway 17 regional pump station project, still being designed.

“One of the things that gave rise to development agreements in the statutes was to couple developments along with the provisions of utilities and services,” Lee told council Thursday. 

That way, Lee said, development can parallel the installation of municipal services.

Councilman Michael Callahan voted against the parcel’s rezoning, statement of consistency, and development agreements. Callahan did not directly explain why he voted against each of the items at the meeting. He did, however, ask questions about whether commercial use would be permitted if the property was rezoned to Multifamily District. Vidmar told Council that commercial and retail would not be permitted in a Multifamily District district.


Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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