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Saturday, May 18, 2024

County OKs financial plans for Project Grace, seeks LGC approval next month

New Hanover County chief strategy officer Jennifer Rigby details the changes made in the MOU between the county and Zimmer Development Company for Project Grace. (Port City Daily/Amy Passaretti)

NEW HANOVER COUNTY — County staff will move through its final steps of approval for Project Grace in three weeks when it presents the public-private partnership investment strategy to the Local Government Commission. 

Commissioners unanimously approved an amended memorandum of understanding at its meeting Monday, as well as a resolution, to negotiate a lease with Zimmer Development Company.

READ MORE: Project Grace revised: reduced rent, contingency plan, possible 2022 groundbreaking

The LGC oversees local government’s finances and has the final say on how the plan proceeds. Zimmer Development Company would manage construction of both public and private facilities on a 3-acre block of county-owned land downtown. It would also front the money and the county would reimburse the developer, paying $4 million annually for 20 years. New Hanover County would then own the building and land.

If approved by the LGC on July 12, construction could begin by late August or early September.

Project Grace calls for a new 84,000-square-foot civic and arts center combining the public library and Cape Fear Museum. If it goes through, Zimmer would contribute $30 million into private investments for housing, a hotel and retail on the south side of the block, in turn generating property tax for county and city budgets.

According to assistant county manager Lisa Wurtzbacher, the net benefit of moving forward with a public-private partnership, rather than the county securing a loan on its own, saves $7 million. The cost of borrowing without the public-private partnership would be $66.8 million.

The total amount to be paid by the county in rent to Zimmer and city property taxes on the building is $84.3 million over two decades.

Estimated revenues to the county, including from county property taxes, sales price of the land for the private development and parking revenues associated with the mixed-use businesses, would total $11.6 million. Therefore, the county surmises its direct net cost will be $72.7 million over 20 years.

Wurtzbacher presented to commissioners in her financial analysis additional benefits of the project to the city and county. She pointed to room occupancy taxes from the future hotel, sales taxes, and property taxes as potential streams of revenue that could bring in roughly $13 million over 20 years.

These numbers also have been presented to the LGC for review, Wurtzbacher added.

Before construction can begin, the 1926 Borst building at 216 North Second Street will need to be razed. The current library is also planned for demolition, following the construction of the new one.

“I would like to begin this process immediately,” LS3P vice president Charles H. Boney wrote to the county on June 14 about tearing down the Borst building. LS3P is the architect of the project.

Normally, the city would require a 90-day notice of intent to demolish a historic structure to allow preservationists time to advocate for saving it; however, the Borst building is located outside the city’s historic district limits and not subject to the stay of demolition.

In the city’s former land development code, a building on the National Register of Historic Places would require a stay, even if outside historic district limits. The same rule did not make it into the updated code, according to Travis Gilbert, director of the Historic Wilmington Foundation. 

“It’s because there is no state-enabling legislation that gave the city permission to continue that regulation,” he said.

Gilbert and other community advocates made several pleas to save the buildings over the last few years.

“We continue to express appreciation for New Hanover County commissioners investing in a new library and museum,” Gilbert said. “But we continue to be disappointed that adaptive reuse is not an integral component to a new museum and new library.”

Community member Diana Hill, who has been vocal about fighting to save the library and Borst building, made one final appeal to commissioners.

“There is really absolutely no reason to knock down a 100,000 square foot building on one side of the block and put up an 84,000 square foot building on the other side,” she said. “It’s so disappointing you would consider starting 1,500 tons of debris of a solid library.

Wilmington Chamber of Commerce President and CEO Natalie English also spoke out during the public comment period on behalf of the chamber and Wilmington Downtown Inc.

“I enthusiastically return to let you know the business community is all in favor to move forward with the public-private partnership,” she said. “We believe it’s important to continue the type of creative financing and creative investments to make Wilmington and the county attractive to the people who are coming to fill the jobs, create jobs and create economic opportunity.”

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