Monday, April 22, 2024

Wrightsville Ave improvements cost estimated $11 million – $16 million; more details, developer’s perspective

Conceptual drawing of proposed Wrightsville Avenue improvements. (Port City Daily photo / Courtesy State Street Companies)

WILMINGTON — The developer of the Galleria mixed-use project shared its presentation ahead of a city council discussion on Monday; the presentation lays out the argument for prioritizing for Wrightsville Avenue improvements, along with cost estimates, conceptual drawings, and the estimated tax benefits of the Galleria project to the city.

The presentation lays out a three-phased construction timeline that stretches over a decade, but it argues that there is a ‘window of opportunity’ to plan transportation improvements. The presentation asks the city to move quickly to consider investing in the roadway, possibly including a transportation bond or capital project to help fund the improvements.

The improvements include a ‘complete street’ layout, with a landscaped median and dedicated lanes for bike and pedestrian; the proposal also includes a roundabout. The project area covers about 4,500 feet, or 8/10 of a mile, between Military Cutoff Road and Eastwood Road, near the bridge to Wrightsville Beach.

According to developer Jeff Kentner, whose State Street Companies is redeveloping the former Galleria mall site of Wrightsville Avenue, the City of Wilmington asked for a narrative presentation for a workshop for city council members following Monday’s agenda review meeting. Kentner said State Street was not asked to attend, and that he was unsure if the company’s presentation would be part of council and staff’s discussion.

[Editor’s note: Council will likely address, at least in concept, some of the presentation’s content; their reactions to the conceptual plan and timeline will be reported in an upcoming article.]

Cost

Cost estimate showing the initial amount and potential cost-reduction opportunities suggested by State Street Companies. (Port City Daily photo / State Street)

For years, city officials and those familiar with the Galleria project have cited the uncertainty of road improvement costs, ballparked anywhere between $2 million and $10 million. A cost estimate produced by Clark Nexsen, a firm contracted by the city in the summer of 2019, gives a more concrete number — with some caveats.

[Author’s note: Clark Nexsen reportedly produced two different estimates; according to Kentner, they had only minor differences and were not materially different in terms of cost.]

According to Clark Nexsen’s report from October, the estimated cost for total project is $16 million, but Kentner pointed out there are several opportunities to reduce this cost, including removing a ‘duct bank’ from the roadway; the duct bank would carry utility lines, which Kentner said would be unnecessary since the Galleria site, which borders the majority of one side of the roadway, will already be served internally by utility lines.

Removing the $4.9 million duct bank, along with other cost-saving measures, could drop the overall cost to around $11.2 million, according to State Street’s presentation.

According to the City of Wilmington, there is no concrete funding plan in place, and no formal cost-sharing agreement currently being discussed, although both Kentner and Wilmington Mayor Bill Saffo have said they would happily share the project with North Carolina Department of Transportation (NCDOT), a plan that could also involve the city taking over the street (an option approved in theory by a 2016 resolution).

State Street’s presentation also alludes to a potential transportation bond, which would likely have to go on the ballot in 2020 election to provide funding in line with the construction schedule for the Galleria project. Even without a bond, any major funding from Wilmington would have to at least go before city council for a vote

Who is responsible for road improvements?

According to city records, State Street has submitted at least one potential ‘Roadway Improvement Agreement’ (RIA), that would have divided financial responsibility between the Wilmington, New Hanover County, the NCDOT, and State Street. This RIA was never apparently taken up for serious discussion, and the most recent presentation from State Street doesn’t make any specific recommendations about funding aside from suggesting NCDOT funding for bike lanes and pedestrian paths and State Street’s willingness to donate right-of-ways for free.

City emails between State Street (including Kentner) and the city showed that, earlier in the project’s history, city staff argued State Street was responsible for road improvements as the developer.

State Street’s counter-argument was that when the City of Wilmington annexed the property from Wrightsville Beach, it was the city that zoned the area.

The city actually amended its urban mixed-use zoning to allow denser development outside of the commercial business district downtown at the same time as it assigned the initial zoning to the Galleria site — something the city had just 60 days to do after the annexation. The amendment and zoning were first up for a vote in August of 2014, then continued over concerns about ambiguity in the amendment. In September of 2014 council approved both amending the UMX code and zoning the Galleria properties.

While the city clearly had the Galleria project as a prime example in mind when it amended to code in order to apply it to the recently annexed property, State Street argued that it was still technically the city who requested the zoning (i.e. on the zoning application, the applicant is “City of Wilmington”). Kentner compared it to other zoning applications — for example, Roy Carroll’s The Avenue or the Swain family’s CenterPoint projects — where the rezoning applicant was held responsible for road improvements.

Kentner reiterated that, while he believed it was the city’s responsibility to consider the traffic impact of the zoning it requested, neither he or State Street was “telling the city what to do.” Kentner said the Galleria project was moving ahead, irrespective of what the city chose to do — however, he did note that the conceptual design of the road-facing part of the project would depend on how the city approached Wrightsville Avenue improvements.

“We’re moving forward, it’s not conditional — but we just need to know one way or another what the city plans to do,” Kentner said.

Timeline: Phasing and tax revenue

State Street’s presentation, which cites Clark Nexsen’s report, breaks the project down into three phases, beginning in January 2021, January 2025, and January 2029. The presentation states, “[p]hasing of the transportation project allows for tax revenues to materialize and contribute to the funding of future phases. “

The presentation includes State Street’s forecast for the economic impact of $200 million investment in the Galleria site. According to that forecast, the completed project would generate $2.9 million in annual tax receipts, including property taxes, room occupancy taxes from a proposed 7-story hotel, and sales taxes from retail, restaurants, and the hotel. The estimated annual tax revenue for the City of Wilmington is $1.1 million.

State Street’s forecast of the tax revenue for Wilmington, New Hanover County, and North Carolina from the completed Galleria project. (Port City Daily photo / State Street)

Kentner himself downplayed the importance of tax revenue to the city, saying the city’s own development policies and safety concerns should be the motivation for the road improvements.

Why prioritize Wrightsville Ave roadwork?

The Wrightsville Avenue improvements proposed by State Street and studied by Clark Nexsen are not part of the city’s 2014 Transportation Bond, nor or they on the city’s current list of requested but unfunded projects. Thus, State Street had to make a case for why the city should prioritize the project ahead of others.

As Kentner has argued in the past, State Street’s presentation puts forward that ‘complete streets’ — that is, roadways with pedestrian and bicycle pathways, along with aesthetic improvements, are consistent with the city’s “Comprehensive Plan and Wrightsville Sound Small Area Plan.” State Street’s presentation also notes that Wrightsville Avenue is a “major gateway” and “scenic corridor” to the city, as well as pointing out the roadway — marketed as part of the ‘River to Sea Bikeway’ — does not have dedicated, buffered bike lanes.

Still, the city would have to consider other ‘complete street’ or roadway projects that are, in effect, ahead in the queue — for example, the 5th Avenue Road diet, the city’s second-highest scoring unfunded project aimed at creating a bike and pedestrian corridor stretching from north to south across the greater downtown area.

Addressing what it sees as the need to act now, State Street’s presentation notes development on the Galleria project is slated to begin in the second quarter of this year, just months away. As Kentner has noted, State Street’s engineers are waiting for a definitive plan from the city before designing the road-facing aspects of the projects, including mass transit stops. The presentation cites the need to avoid “costly disruption” caused if construction on the Galleria began and later had to be halted, and altered, to accommodate roadwork that wasn’t coordinated with the initial Galleria plans.

State Street also includes the city’s “land use decision made without consideration of transportation impact.”

What’s next

From the conclusion of State Street’s presentation. (Port City Daily / State Street)

State Street makes several requests at the end of its presentation, including $90,000 for ‘30% CD approach’ — that is, preliminary construction documents that establish the basic project parameters. State Street also requests council consider approval of a ‘Capital project’ to provide funding for the cost of construction drawings.

Monday’s meeting likely won’t see a vote on these requests, or the Wrightsville Avenue project in general. There will be a discussion of the project, following the agenda briefing meeting on Monday, January 6. The meeting is open to the public and will be held at 8:30 a.m. in Council Chambers in City Hall, 102 North Third Street.

State Street Companies – Wrightsville Ave Improvements Presentation – Port City Daily by Ben Schachtman on Scribd


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