Wednesday, July 24, 2024

Multiple years, failed attempts: City abandons bus yard project in favor of sale

The prior Wave Transit bus depot at 1110 Castle St. will now go to public sale after multiple failed attempts from the city to find the right public-private partnership for redevelopment. (Port City Daily/Shea Carver)

WILMINGTON — The city is ready to wash its hands of a depreciated property that council members have concluded is more trouble than it’s worth. The 1.5 acres at 1110 Castle St. is riddled with environmental issues, deteriorated structures and legal constraints for future development.

On multiple occasions, the City of Wilmington has failed to create a successful partnership and leverage the land for an intended community purpose — the last falling through at the end of 2021.

“We’re like a rat caught in a trap,” council member Charlie Rivenbark said at Monday’s briefing. “We don’t want the cheese; we just want to get out of the trap.”

Economic development director Aubrey Parsley presented council an update on options for the former Wave Transit maintenance property.

Parsley spent four months digging into why efforts to redevelop the property have failed. He concluded the city’s goals for a public-private partnership were “incompatible with the realities of the property.” He also mentioned the legal constraints that come with being a local government can make business transactions tricky. 

The deal comes with a list of considerations, in effect decreasing its viability for developers. Council wanted to include an affordable housing component on the property, making it difficult for some to finance or create a return on investment. The city was willing to donate a portion of the land for development, but is limited in recipients per a state law requiring gifted property from a government entity to be used for a “public purpose.” 

“There’s a lot to navigate there if you’re a developer,” Parsley told council. 

The Brownfields property has soil contamination from where the old Wave buses were maintained up until seven years ago. The two structures on site are poisoned with lead, asbestos and mold, according to Parsley, who indicated other environmental concerns are likely still unknown.

In 2018, Historic Wilmington Foundation suggested preserving the structures, built in the late ‘40s. Parsley said environmental remediation of the site would cost at least $360,000. 

“The roof is falling apart … there are a number of penetrations that now exist in both buildings so when it rains you have water entering,” Parsley said. “[There is] stuff falling off the roof and collecting on the property. It’s becoming an issue with blowing into the adjacent properties as the building deteriorates. We really need to take a hard look at what to do with these buildings. They’re becoming less and less structurally sound.”

While council member Kevin Spears expressed there shouldn’t be “a rush” to put the land to use, others are happy to see it go. The city has been attempting to find the right use of the property since it first commissioned F.A. Johnson Consulting Group to do a study in 2005 on how to move forward, knowing Wave Transit would vacate operations there.

“This is a challenging property and as a local government, we are more constrained than the private sector,” city spokesperson Jennifer Dandron said. “The proposals we received over time changed.”

According to a city council resolution from 2007, the reuse study recommended revitalizing the land as “a mixed-use development with community amenities.” It also suggested the city assist if a nonprofit entity was involved.

At that time, the city planned to donate the property to Wilmington Southside Community Development — now disbanded — to carry out the redevelopment and help rejuvenate the Black business community along Castle Street.

In 2015, Wave Transit vacated the facility. 

Council passed a resolution in 2017 favoring workforce/affordable housing as a criterion for future requests for proposals on city-owned land, citing a lack of options. 

The following year local for-profit brewery TRU Colors — which employs active gang members — started an online petition to garner support for purchasing the Castle Street land. Founder George Taylor started a nonprofit, TRU Impact, to convince city leaders to sell the property directly to him instead of going through an upset bid or public auction process so he could build a brewery on the site. While Taylor never submitted an official proposal, he had been working behind the scenes with city officials on a deal.

READ MORE: Tru Colors and Historic Wilmington Foundation both hope to acquire former WAVE Transit Castle Street depot

By March 2019, council proceeded to declare 1110 Castle as surplus property and sent out a request for proposals to redevelop it. Commercial, residential or a combination of uses were being considered, particularly to address affordable housing needs in the area.

The property was appraised at $390,000 to be sold as is.

City attorney John Joye told council members at the time, “When it comes time to evaluate [the proposals], you will likely not be comparing apples to apples, but apples to oranges to grapefruits to bananas. Just keep that in mind as we move forward with that process.”

The sole proposal was placed by Clark Hipp with Hipp Architecture and Development in June 2019. Hipp had collaborative plans initially with Cape Fear Community Land Trust and Cape Hear Habitat for Humanity. The developer went back and forth with the city for 16 months. His final plan, before withdrawing in December 2021, included partnering with nonprofit Genesis Block to create a food incubator and entrepreneurship center, in addition to meeting the city’s request for affordable housing.

In January, council approved a resolution to create a new RFP.

READ MORE: Affordable housing plans dropped for Castle Street

Parsley said Monday the latest appraisal valued the property at $390,000. Taking into account the needed remediation work, the city estimated that to be closer to $230,000.

“It appears we’re absolutely operating in red no matter what we continue to do,” council member Luke Waddell said at Monday’s meeting. Though elected to council in December 2021, he said it was obvious, based on the background of the project, the city was “throwing good money into bad.”

“We need to get out of the way and allow the free market to figure out what’s best for that property,” he said, pressing the fact that the current real estate market is hot, with properties listing the highest in history. 

Mayor Pro Tem Margaret Haynes — a self-described proponent of the bus yard’s potential public-private partnership — seemed to agree.

“[I’m] doing a complete 180: We ought to list it for sale, as is, take it, and if we can get some money and invest it in Eden Village, get some homeless people off the street,” she said. “Let’s do something good with that money.”

All were in agreement a sealed bid method provides the city the best chance of leveraging the land, as opposed to an upset bid process. The latter would allow a competitive public process, wherein once an offer was made, another bidder would have 10 days to raise the bid by 5%. The process repeats itself until 10 days have passed and no one has raised the bid. The city would be required to take the final offer.

“No one can say we haven’t done everything in our power to help create a better environment along that part of Castle Street,” Rivenbark said Monday. “I don’t know how much money we’ve put into it, plus staff time and the angst it’s caused. It’s insanity to keep thinking we’re going to go on down the same path.”

Council directed staff to move forward with a resolution authorizing a sealed bid sale, which it will vote on at a future meeting. If the city is not satisfied with the highest bid received following the process, it does not have to accept it.

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