Wilmington’s River Place again facing significant budget overruns, this time over $700,000

Work on Wilmington’s public-private River Place project includes roadwork to reopen Chestnut Street. (Port City Daily photo / Benjamin Schachtman)

WILMINGTON — The City of Wilmington’s largest venture into the public-private development realm to date is once again facing budget overruns. The project thus far has cost the city significantly more than what elected leaders initially agreed to.

The new cost overrun comes in the form of roadway improvements between Grace Street and Chestnut Street — and will cost an additional $735,000 to complete, from the city. The entire project is not to exceed $2.6 million, according to the new budget amendment (provided it is approved as written).

“In order to fund the construction of these improvements, a companion ordinance making a supplemental appropriation to the Capital Project Funds for the Chestnut and Grace Street Improvements Project is necessary in the amount of $735,000. This includes City funds in the amount of $362,325 for the construction cost and developer fee, an approximately 15% construction contingency amount of $342,675 and a construction material testing budget of $30,000. This funding comes from the Storm Water Payment in Lieu and existing capacity within the debt model,” according to a budget amendment City Council will have to vote on at its upcoming meeting.

This isn’t the first time the city has had to turn to other funding sources to pay for its flagship project. In August of 2019, the city announced it would be using money from its parking fund to help pay for the elevated walkway between Bijou Park and the development.

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The budget for the walkway was supposed to be $800,000 but ended up costing $1.42 million. When the agreement was approved, the city was told they could hopefully make up for the additional expenses through ‘value engineering’ for future aspects of the project — but as more increases are presented, it is unclear where the value engineering is taking place.

When compared to previous increases in cost, however, the additional $342,000 is just a fraction of the total overruns the project has seen.

In August of 2017, just a year into the agreement with East-West Partners, the total cost of the project jumped nearly $8 million.

It’s not just budgeting issues that has cost the city, the project also ended up costing taxpayers double the city’s estimates for eminent domain costs after being repeatedly taken to court.

As seen in the past, the cause for the price increase is cited as being due to the lack of subcontractors available and the ‘continued strong economy.’

It’s worth pointing out that the City of Wilmington is once again considering entering into yet another multi-million dollar public-private development for the planned Gateway Project.

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