NEW HANOVER COUNTY — A conservation group’s efforts to preserve land on the western banks of the Cape Fear River is facing a major setback, after a state agency voted against granting it millions in funding.
N.C. Land and Water Fund (NCLWF) denied Chapel Hill-based nonprofit Unique Places to Save crucial backing that would push it three-quarters of the way to its $16 million goal to acquire 82 acres of Eagles Island currently threatened by development.
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Annually, the state entity funds conservation projects aimed at protecting water quality and natural resources. At last week’s meeting, when the board of trustees discussed how to divvy up $71 million available in grant funding, they were taken aback by Unique Places to Save’s ask: $12.2 million.
Though the 2022 awards were capped at $4.7 million per applicant, board members said it was the most requested from any of the land trust’s acquisition applicants this year and the second largest in the last decade.
A lack of formal support by local government entities was a major concern for the board. Members also took issue with the price of the land, based on a submitted appraisal, and said the group’s conservation vision was not clear.
After a nearly hour-long discussion, the nine-member board ultimately voted 5-3 against funding the project.
UP2S executive director Clark Harris, who attended the meeting in person, was shocked at the outcome. Yet, he said the lack of grant money “doesn’t mean the deal is done.”
“It was heartbreaking,” he said. “But we’re just on a more expedited timeline to move forward.”
Split opinions
NCLWF’s acquisition committee, responsible for reviewing all applications first, assessed the 88 submissions for 2022 during a nine-hour meeting on Sept. 19 ahead of the trustees gathering the following day. The committee was split 3-3 on whether to fund the project, which sparked additional conversation among the entire board.
During Sept. 20’s trustees meeting, they chose to pull out the Eagles Island project as a separate discussion and take an individual vote on the application. Typically, the board would have approved funding in order of the ranked projects — U2PS scored second out of the more than seven dozen. Had it been awarded, it would have knocked the bottom few proposals out of the funding pool.
“We spoke yesterday about being appointed as trustees,” acquisition committee chair Jason Walser said. “If it was just the appraisal, we wouldn’t be needed; it would be bureaucratic. But we find, even with this $4.7 million cap, we’re not funding eight to 10 projects at the bottom of the list. That is just the reality.”
Support for the project was divided; some said the application left too many unanswered questions and others thought it would be a missed opportunity to conserve the property if they didn’t follow through now.
The land is owned by Diamondback Development, which has stated it will work with developer Bobby Ginn to construct the Wilmington Hotel and Spa on 14 of the acres.
One member suggested funding the project but with the condition that UP2S seek additional support over the next 18 months.
“Have them find other stakeholders to get some skin in the game,” board of trustees and acquisition committee member David Womack said. “The entire project shouldn’t fall on the shoulders of this committee.”
Harris told the board he asked for support from New Hanover and Brunswick counties, the City of Wilmington, the Battleship N.C., Town of Navassa, the Eagles Island Task Force — a diverse Cape Fear community group that started in 2020 with a shared vision to establish the island as a nature park — and the New Hanover County Soil and Water Conservation District.
While verbal support came from Battleship N.C., none of the entities submitted a formal letter, Harris said. The executive director wasn’t hired to lead the charge of the Eagles Island project until the beginning of August.
UP2S turned in its grant application seven months ago. During that time, in February 2022, the nonprofit was also in talks with Brunswick and New Hanover counties, as Eagles Island is located in both areas.
“When the project first started, there were a lot of people involved and we weren’t really in control,” Harris said. “The timeline was moving slowly, and we missed out on an appropriation window [for funding] from New Hanover County for 2022.”
Since the land is not in the city’s jurisdiction, he said UP2S did not approach the City of Wilmington early on to ask for financial support.
It wasn’t until Aug. 16 the newly hired executive director spoke to the Wilmington City Council to ask for a letter advocating for the nonprofit’s cause. Spokesperson Jennifer Dandron said the city never received a formal request.
When asked if the city supports UP2S’s efforts, she said: “We’re still looking into it.”
According to internal city emails, Harris has since reached out to Mayor Bill Saffo and council member Luke Waddell asking to meet, seeking advice on how to proceed.
“At this point, I am just trying to see if there is a viable path forward and it would mean a lot if I could have 10-15 minutes of your time to get your advice on the situation,” Harris wrote.
New Hanover County planning staff confirmed it did not receive a support letter request either but noted the commissioners informed UP2S they would not be making any decisions on land use for the western banks until further studies were done. Following an August NHC work session, the board requested technical studies to shape a long-term vision and determine policies for the area.
While Harris spoke during an Aug. 15 Brunswick board of commissioners’ public comment period, county spokesperson Meagan Kascsak said timing wasn’t in his favor to receive a letter in the window needed to meet the NCLWF grant deadline. Kascsak confirmed a formal presentation would have likely been required, which would have taken more than one board meeting for approval.
Harris said the nature park and any future plans for public access and development would be on the New Hanover side, which is why UP2S did not approach Brunswick earlier in the game.
The only organization that stated a conflict of interest was Battleship N.C. Being an entity of the N.C. Department of Natural and Cultural Resources, the same as the NCLWF, executive director Capt. Terry Bragg said it would be “inappropriate” to lobby on behalf of UP2S.
“The Battleship North Carolina supports all conservation and environmentally sensitive development projects on Eagles Island, to include UP2S,” he further clarified.
Co-chair of the Eagles Island Task Force and board of supervisors for the NHC Soil and Water Conservation District, Evan Folds also cited organizations he’s involved with were not given advance notice to draft an appropriate statement within the timeframe.
According to county emails obtained by PCD, the task force asked to see the contract between UP2S and Diamondback Development before backing the plan; however, UP2S was not willing to share the agreement.
Harris and Folds confirmed it has since been exchanged. PCD also requested the purchase agreement but did not receive it.
Folds said the contract helped to clear up some confusion and solidified UP2S’s conservation vision, but he wanted to see the appraisal, still. The document, Harris confirmed, was only shared with the state.
‘Numerous reasons working against the project’
The appraisal was a sticking point for NCLWF board members, too. It was “20 times” more expensive than the average $13,000-per-acre projects were valued at, according to NCLWF chair John Wilson.
From Harris’ point of view, the board focused too much on the price-per-acre — $272,000 — and validity of the appraisal.
If the project were awarded funds, NCLWF would require a second appraisal, reviewed by the state property office before disbursing any money. Harris said, because of that fact, the state had a “safeguard” in place, even if its board was shocked by the price tag.
“They were really hung up on that and the details of it, which felt a little bit unnecessary,” he said.
If the state’s appraisal came in significantly lower, it would raise questions about how the first one was obtained. Also some acquisition committee members were concerned that by endorsing the project, it would in turn solidify the value.
“It was by far the most expensive project we reviewed,” Walser said at the meeting, “and that’s, I think, the main reason it jumped out at us. There was no opposition to [it] as a project. It has a lot of conservation value. … Here begins our conversation and fiduciary obligations. It’s about stewardship of our resources.”
The 82 acres comprises multiple parcels owned by different entities. In addition to Diamondback Development, which has roughly 42 acres, Wilmington Unique Places LLC owns two adjacent parcels, totaling 40 acres. The LLC belongs to UP2S board chair Jeff Fisher.
NCLWF trustees questioned Fisher’s ownership of the land and also the confusion over whether Wilmington Unique Places LLC and UP2S are separate entities (they are).
Harris explained Fisher’s primary real estate company for years was Wilmington Unique Places LLC and Fisher’s been in discussions with disbanding that company name to make the distinction clearer. UP2S, the nonprofit, will soon be the only “Unique Places” entity owning conservation land.
Fisher has a list of nearly 15 businesses in his name, at least four of which have been dissolved.
“They’re all real estate holding companies,” Harris explained. “For every deal he does, there’s a separate partnership structure. It’s a common practice.”
Fisher mainly purchases property for mitigation banking — a complicated industry where developers who destroy wetlands for building must “purchase mitigation credits” to offset the loss.
His relationship with Diamondback owner Jay Shott was the motivation for the conservation deal on Eagle’s Island. The NCLWF board alluded to Fisher gaining value per the sale, questioning the partnership.
“They had numerous reasons they saw working against the project, despite its obvious merits based on the ecological and cultural benefits,” Harris said.
Fisher did not return an email request for comment.
Imminent development?
The Eagles Island project ranked second out of 88 acquisition proposals and scored an 84 out of 100, making it very competitive. However, ranking doesn’t ensure a project is a shoe-in for NCLWF grant funding.
As a “time sensitive” project, if UP2S does not raise the required $16 million to purchase the land, a portion of it faces imminent development as a hotel and spa.
“I personally think the viability of this project for development is very suspect,” Walser said at the meeting. “I personally don’t think it’s going to happen as the permits indicate.”
He confirmed with Port City Daily that the massive increases in construction costs during the past few years made him question if something of this scale and complexity is feasible right now. The hotel was proposed to be six stories and 100 feet tall.
“When I said that, I just think it’s a really big, ambitious project in a time of a lot of economic uncertainty,” Walser said.
Walser also favored funding UP2S at $4.7 million. He said the property is worth conserving, as regular flooding in the area occurs.
The 82 acres in question is all located within a 100-year flood zone, meaning it’s high risk for water accumulation. It’s one of the main arguments of opposers that speak out against development on the western banks.
Approximately 67 acres of Eagles Island is classified as wetlands — though 14 acres along the riverfront is not. Those uplands are partially where the hotel and spa are slated to be built, submitted to New Hanover County’s technical review committee last December.
As the site is currently zoned for business, the developers only need state and federal permitting for the by-right project. According to the Eagles Island Task Force vision plan released last year, it’s the only portion of the 2,100-acre area suitable for development.
Harris mentioned a “filing error” during the board meeting as a window of opportunity for UP2S to put the land under contract.
Yet, the mistake was not tied to the county’s planning process, according to planning director Rebekah Roth. Wilmington Hotel and Spa was put on hold after the TRC assessment, as a result of the transfer of the contract to UP2S.
If UP2S doesn’t secure the multimillions to purchase Eagles Island by its end-of-the-year deadline, Bobby Ginn will proceed with his original plans. Harris said he’s been in talks with Diamondback about the feasibility of extending their timeline.
Diamondback owner Jay Shott confirmed he hasn’t had internal discussions with his business partners, so for now nothing has changed in the deal with UP2S.
“They’re still working toward their goal; unless they’re able to close or run out of time or terminate, we’re still under contract,” he said.
UP2S put down $100,000 in good faith. Without the $12-million grant, Harris said the nonprofit is honing in even more on pursuing private six-figure donations to accrue $16 million.
“What we need now is financial support and a strong strategy on how to get it,” Harris said.
Shott iterated Diamondback will go with whatever shakes out.
“It sounds to me like the public has spoken,” he said of the trustees’ vote, “and right now they would rather see the property developed.”
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