Taking the land for the city’s public-private River Place project will be considerably more expensive than staff initially told council members it would be

WILMINGTON — The City of Wilmington has settled one of its eminent domain cases – and will shortly settle at least one more – related to taking land for the public-private River Place project; for both cases, the city will pay more than twice what City Council voted to spend.

Related story: City Council voted for River Place land grab, now three lawsuits could cost Wilmington

The cases date back to the summer of 2017, when council voted to approve a series of temporary easements behind several buildings on Front Street; these easements were intended to provide access for construction crews for the demolition of the Water Street Parking Deck and the early construction phases of the River Place project. In October of 2017, the city filed the legal paperwork for the easements; the city offered around $30,000 each for the temporary taking of property behind the Chadsworth’s Columns and Front Street Optometric buildings.

Then, in February of 2018, the city changed three of its easement deals from temporary easements to fee-simple taking. Deputy City Manager Tony Caudle told council that the city did not have to give the property owners advanced notice of the move because an eminent domain case was already active. The resolutions were presented to council as having no budget impact.

Council voted 4-1 in favor, with Councilman Paul Lawler as the sole opposing vote; Lawler opposed the use of public funds in the River Place, and has consistently voted against moves related to the project. Councilman Kevin O’Grady and Mayor Pro Tem Margaret Haynes asked to be recused (O’Grady recused himself because he has contracted a unit in the River Place condo; Haynes never responded to questions about her recusal.

The city had initially offered $32,589 for Front Street Optometric and $35,310 for Chadsworth’s Columns. According to New Hanover County Superior Court documents, the city offered an adjusted total of $38,605 for Front Street Optometric Care; roughly an additional $6,000 for taking the parking lot area permanently, instead of for three years. A similar offer was made for Chadworth’s Columns.

Property owners contest city offers

According to Attorney Andrew Penny, who represented the owners of both properties, both properties were facing the loss of rear entry parking for up to three years, and the Chadsworth’s Columns building also faced the loss of side access.

“The city had deposited around $35,000 [with the courts] based on their appraisal and we disagreed with that. We brought our own appraiser in and the value was considerably higher,” Penny said.

While the issue was at one point headed to court, the city ultimately negotiated and settled with Front Street Optometric for $73,000, according to Penny. While a separate agreement with the Chadsworth’s Columns building is pending, Penny said he believes that case will settle for around the appraised value, $69,000. Penny said appraisers found the corner building’s losses would be slightly less than Front Street Optometric’s due to fewer parking spots and slightly less square footage lost.

Penny said a per diem agreement to protect his clients if the River Place project went beyond the city’s estimated completion date was initially part of the negotiations but ultimately dropped.

Third eminent domain case still pending

The $142,000 in settlements doesn’t quite close out the Front Street eminent domain issue. The city is still in litigation with the owner of 255 North Front Street – the former Soapbox Laundro-Lounge, currently a mixed-use building housing the Waffle House – over a similar eminent domain case.

Related: Wilmington changed its mind on eminent domain deal. It could cost the city $350,000

As with Front Street Optometric and Chadsworth’s Columns, the city used eminent domain to secure a temporary easement and then modified the agreement to condemn property permanently. The city offered $35,000, later increasing that amount to $40,990.

However, the taking prevented access to a handicap-accessible elevator entrance at the rear of the building and, according to email correspondence between the owners’ attorney and city legal staff, had a significant impact on the building’s value. The owners’ counteroffer, thus, was much higher than the appraisal – almost ten times higher, at $350,000.

City staff have declined to comment on the settlements or ongoing litigation. However, according to city emails, a settlement with the Waffle House building owners is expected soon.

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