Friday, February 3, 2023

Galleria plans back to square one after rocky process with former developer

After purchasing the property at 6730-6800 Wrightsville Ave. this summer, Johnson Development Associates submitted a new site plan for Galleria’s mixed-use development. (Port City Daily/Amy Passaretti)

WILMINGTON — A mixed-use development that has been clearing hurdles for a decade is getting a blank slate. 

The Galleria project, named for the mall demolished on site in 2012, is under new ownership, which means the planning process is starting from scratch.

READ MORE: After years of no action, Galleria development on Wrightsville Ave back on the table

Wilmington Urban Area Metropolitan Planning Organization transportation planner Scott James confirmed a new impact analysis was submitted Nov. 4 and under review.

“There is no grandfathered site plan,” James explained. “It’s a completely new, different proposal, requiring its own traffic impact analysis. We just now started that process.”

Estimated traffic impact shows the development will generate 4,425 daily vehicle trips. Wrightsville Avenue currently sees roughly 11,500 vehicles travel through daily.

The site’s traffic impact analysis became a point of contention for the previous owners, Charlotte-based State Street Companies, and was a major hang-up over the final 10 months of trying to push through the project. 

State Street sold the 17-acre site to Johnson Development Associates this summer after advocating for the development for nine years. Port City Daily asked the company why the property was sold and the original plans dissolved, yet did not hear back by press.

Johnson Development purchased the site for $30 million according to New Hanover County Property records and submitted updated plans to the city for a similar mixed-use project. The South Carolina-based company also acquired the neighboring Melrose Mobile Home Park, originally purchased by State Street in 2017, for $2.7 million.

Now named “Haven at the Galleria” — the same name of the LLC created in July for the project — the proposed development includes two mixed-use buildings, each covering a little more than  4 acres. The buildings would be split by a private road, Galleria Boulevard.

Documents show the project is planned in multiple phases. The first, slated to begin in 2025, includes 256 mid-rise multifamily housing units and a coffee shop with a drive-thru.

The second phase, planned for 2027, would add 408 mid-rise multifamily units and about 40,000 square feet of retail space.

New site plans show two two-story mixed-used buildings each on about 4 acres of land. (Courtesy/City of Wilmington)

What happened to the old plans?

State Street received the go-ahead in December 2020 to start building a 224-unit apartment complex that included 40,000 square feet of office space, a 20,000-square-foot athletic center, a 90-room hotel, 35,000 square feet of retail, and two 12,500-square-foot restaurants. 

After pre-technical review committee meetings, the company altered its plans and formally submitted an updated version a year and a half later on April 20, 2022. The new proposal added 112 more units to The Residences at the Galleria, totaling 336 apartments.

With a 46% increase in dwellings, the review committee concluded an updated traffic impact analysis was required from 2019’s plans, executed by WSP traffic engineering firm.

A second firm, Ramey Kemp, reviewed WSP’s TIA and told the developer an additional study was not needed.

A public records request Port City Daily submitted July 7 and received in November shows hundreds of internal emails over the course of six months detailing the city and developer at odds over how to proceed. The president of the development firm got involved, with pressure from his financial partners, and legal issues were called into question.

“Our ability to proceed is contingent upon securing prompt TRC approval, a condition that has been stipulated by our financial partner,” State Street president and CEO Jeff Kentner wrote July 5.

The TIA committee concluded since plans changed significantly, a new analysis was needed.

Consulting engineers Norris and Tunstall emailed city staff June 8: “There seems to be some confusion regarding the nature and extent of required transportation improvements.”

The firm noted the property is located in a general zoned district, not a conditional one, and therefore the city cannot require additional road improvements. It also said recommendations from the 2019 TIA evaluated the possibility of converting Wrightsville Avenue into a “complete street” — designed to incorporate more amenities, such as sidewalks, bike lanes and landscaping — but the city later dropped that plan.

State Street voluntarily agreed to certain “off-site improvements,” such as enhancing the road to the south side of Wrightsville Avenue.

The developer and its engineering consultants said new plans called for “substantially less dense” construction than what were originally proposed. Therefore, less trips would be generated and a TIA would not be needed.

The TIA estimated 9,661 trips based on the full mixed-use Galleria development, but an updated estimate shows 1,699 trips from just the dwellings phase — an 82% decrease.

“It would be catastrophic to have to abandon the project over a non-issue,” Kentner wrote to city senior planner Brian Chambers.

Following a meeting between the developers and city, Kentner engaged law firm Shipman and Wright to lay out the legalities of what appeared to be a compromise. Developers agreed to a “creative” approach by phasing the Galleria construction and only considering the TIA for phase one’s 366 apartments.

Shipman and Wright attorney Jennifer Shipman acknowledged future plans for phase II were not currently in the works. Once underway, she explained additional transportation studies might be required.

Kentner still took legal matters into his own hands, sending an email to WMPO’s James on July 12: “The WMPO has provided the Planning Department with numerous review comments over time relating to additional traffic studies that are not applicable or lawful in the circumstances.”

He stated both the city and NCDOT did not have statutory authority to impose off-site improvements and were creating an “adverse effect on the property owner’s rights.”

“We did not create the laws,” Kentner wrote. “We just abide by them. … As you know, seeking to impose unauthorized development exactions is illegal.”

By July 13, two days after yet another version of Galleria plans were submitted, James sent an email to the development group who reviews traffic impact analyses in the tri-county area. It listed developments on a meeting agenda, including the mixed-use project on Wrightsville.

“Galleria: TIA is required. Emails daily: meetings held 7/06/22 and 7/11/22. (Oh, when will it end?…).”

About a month later, with what seemed to be no resolve, State Street sold the property to Johnson Development. 

“The previous application was withdrawn and replaced with the current application, which also requires a traffic study,” James told PCD on a call Monday.

Once the TIA is reviewed by the committee, which could take up to four months, the new developers can submit a site plan for approval. The property is already zoned urban mixed-use and therefore would not require a rezoning.

That proposal will then go through the technical review committee process before reaching the planning committee and ultimately city council for the final say.


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