Tuesday, January 31, 2023

City staff unimpressed by developer’s revamped plans for old bus yard on Castle St.

Plans for a redeveloped old Wave Transit bus yard fall short of city staff’s expectations for the dilapidating Castle Street property. (Courtesy/City of Wilmington)

WILMINGTON –– An old Wave Transit bus maintenance facility on Castle Street continues to encounter complications in the city’s attempts to sell and redevelop it. 

Marred by failed partnerships, city staff are proposing the property be put up for a new round of development proposals. The last time that happened, the city only attracted a single taker. 

RELATED: Despite initial excitement over Castle Street property, Wilmington received only one proposal for the land

That taker, Clark Hipp of Hipp Architecture, has requested numerous extensions, changed plans for the site, and hasn’t budged on the city’s minimum requests for workforce housing. Changes have been brought on by external factors, Hipp has told the city, including environmental site complications and financing difficulty related to a partnership that didn’t work out. 

This time around, despite attracting big names and curating detailed plans, Hipp’s latest proposal didn’t sway staff. 

Council will decide Tuesday whether to abandon plans with Hipp and seek a new slate of proposals. Though Hipp has spent funds to explore the project, neither the developer nor the city is entangled in any standing written agreement regarding the site. 

Urban blight

Built in 1948, the old bus yard is deteriorating. The city passed a resolution of intent to sell the property to the nonprofit Wilmington Southside Community Development, Inc. in 2007, but the group never provided plans and the city never executed the sale. After 11 years with no proposal, the city sought alternative options to dispose of the property, including exploring a sale to George Taylor, the founder of TRU Colors, the for-profit brewery that employs rival gang members with the goal to reduce community violence. Taylor created a nonprofit in Delaware, Tru Impact, to circumvent North Carolina’s state law to purchase the property. 

The city wants to control the outcome of the old bus yard, so it has so far been unwilling to put it up for a public auction –– a lengthy and sometimes arduous process that would open the site’s development up to the highest bidder’s plans. When transferring public property to a chosen buyer, the entity must fulfill a public purpose. 

Though the city attorney and Taylor negotiated at length, an agreement never came to fruition after the city council decided in 2019 to solicit other proposals as well. 

After the April 2019 request for proposals was shared, 17 interested parties and 13 attendees participated in the city’s viewing day proposal for the property. Only Hipp submitted one.

The city envisioned, then and now, workforce housing on the site; developers surveyed who didn’t submit proposals told the city this wasn’t a viable option. 

Hipp’s initial plans included 18 to 20 workforce housing units, constructing 7,200 square feet of new commercial space, and revitalizing the two bow-roofed buildings on the site. By June 2020, residential units increased to 24 and new commercial space dipped to 4,206 square feet. 

The latest iteration shared last month with the city dropped the workforce housing units to 15 –– the city had requested a minimum of 18. Rent would be affordable for those making 80% of the area median income –– the city wanted 60-80%. 

The original request for proposals requires proof of financial capacity to complete the project; though Hipp wrote to the city referencing a specific letter from a bank confirming $5.3 million to complete the residential portion of the project, the city never received it. 

After an initial 120-day predevelopment exploration agreement with Hipp lapsed, the city granted a 60-day extension in January 2020, and later granted a second extension in June 2020. Though a memorandum of understanding expired in September 2020, negotiations continued until last month. 

“Based on the inability to come to mutually agreeable development terms with Hipp over the course of the lengthy exploration and negotiation period,” staff are recommending the city issue a brand-new request for proposals for the project, “reflective of the current needs of the community, including a focus on affordable housing and community engagement,” according to a memo on the item. 

Hipp detailed in a letter to city staff the complications his team has endured while pursuing the project. Of chief concern are the potential environmental costs, yet-to-be unearthed through a needed Brownfield Agreement with the Department of Environmental Quality, as recommended by Hipp’s environmental consultants. 

While in use as a bus yard, the property had an above-ground fuel storage tank. Subgrade conditions may prohibit residential uses on the ground level, Hipp wrote, prompting the need for the Brownfield Agreement –– of which applying for costs $6,000. 

The risks of unforeseen conditions that would restrict development remain at play, he told staffers.

Initially, the nonprofit Cape Fear Community Land Trust was going to purchase the property and contract with Hipp to construct the units, but the land-lease agreement disrupted the financing of the development, Hipp wrote. 

Even with the changes, Hipp told the city he hoped the new plans for the commercial section of the site would keep with the original intent to repurpose a neglected property. 

Hipp recruited Genesis Block, a business development consulting firm, which is separately proposing to revitalize the two buildings into the Castle Street Food Incubator and a center for equity and entrepreneurship. 

Chef Keith Rhodes is listed as a financial backer of the $5.7 million project in Genesis Block’s proposal submitted to the city. The food incubator would include a commissary kitchen, food hall, and rental space to help culinary entrepreneurs. Event space and coworking space and a center dedicated to minority- and women-owned businesses would be built in the parallel center for equity and entrepreneurship.

The property would be subdivided under the new plans, with Hipp taking ownership of the residential portion of the site and Genesis Block holding title to the commercial portion. 

“Our group is ready to execute an agreement with the city for the proposed redevelopment that will address the needs of the community at large and the Southside in particular,” Hipp wrote in his letter. 

Council will review the item at its regular meeting Tuesday.

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