[Update: New Hanover County commissioners unanimously approved the amended agreement with Cape Fear development Aug. 8. They also authorized county staff to file an application with the Local Government Commission and hold a public hearing Aug. 21 on the debt issuance.]
NEW HANOVER COUNTY — A development to co-locate the downtown library and Cape Fear Museum will come with more savings, according to the county.
READ MORE: While developer cut costs, county says construction price for Project Grace rises
On Monday, Aug. 7, the New Hanover County Board of Commissioners will consider an amended agreement with Cape Fear Development for Project Grace. The new arrangement proposes a net savings of $4.6 million from May when commissioners approved moving forward with the project.
It was originally slated to cost no more than $60,524,860. The figure is now maximized at $55,942,679 for construction of a 95,000-square-foot library and museum, also including parking deck improvements and the development fee.
According to county staff, savings were procured by the development team’s finalized design and a competitive bid process. At a Wednesday roundtable with media, CFD partner Brian Eckel said he’s seen development costs beginning to come down across the market.
The team — including Cape Fear Development, Monteith Construction and LS3P, along with the county — said it identified 27 areas of opportunity to reduce cost of materials and other design aspects that do not impact the end user.
“We reviewed the plans with an eye toward finding efficiencies without compromising the quality and the functionality of the building,” CFD partner Mike Brown said.
He also said adaptive reuse was examined again, marking the third time the county and developers attempted to find a way to save the current building. But it wasn’t feasible based on the building’s age.
After commissioners signed off on the original agreement at their May 15 meeting, LS3P worked to secure final bid drawings so bidders had the most accurate plans to estimate costs.
The final drawings were put out to bid May 25 by Monteith Construction, construction manager on the project.
“Your price is only as good as [the] plans,” Eckel said.
Monteith Construction CEO Bryan Thomas said he received more than 140 bids for subcontractor work on the project.
“I think it reflects there are a lot of people in town and in our region very interested in the project. It’s a staple project for downtown,” he said.
He said to ensure all subcontractors had the most relevant knowledge, he opened up a four-week window for questions and received more than 100 requests for more information on the drawings. Thomas explained there was a marketing and outreach campaign associated with the bid process as well to ensure companies of all sizes were engaged.
He said after a third-party appraiser reviewed the numbers, it was determined the $55.9 million was the best possible price.
CFD identified about $3.5 million in value-engineering savings as well, so the bid results led to more cost reduction.
The market is currently in the “best bid market” since Covid-19, Thomas said. Though he also noted a project that lingers, such as Project Grace — in the works for six years — can often receive “bid fatigue.”
Project Grace is now considered shovel ready with the construction team and subcontractors in place.
On Wednesday, New Hanover County staff spoke to some of the challenges the current library and museum face and benefits of the new design.
“They’ve served our community well for what they were through today, but we want to provide more, I think our community demands more but there are real limitations and challenges to where we are,” Coudriet said. “How do we solve that? It’s through not only co-locating but its purpose design and built facilities for what they’re intended use is.”
Library director Dana Conner explained the current building has aging infrastructure including ongoing water leaks and mold. She also noted the building is “not very welcoming” with limited natural light.
The new library will include dedicated areas for kids, youth and adults, an enhanced local history room, and interactive and group study spaces.
The three-floor museum will feature a domed planetarium, greater opportunities for traveling and interactive exhibits, play spaces for children, a hands-on science gallery and more.
Cape Fear Museum interim director Kate Baillon said the new museum will be more suitable for its exhibits with higher ceilings and more floor weight capacity.
“It’s about having a library where kids, and families and adults can go and love literature and being literate,” county manager Chris Coudriet said. “But it’s also about having a museum reflective of our history but is delivered in a 21st century context.”
The first and second floors will be devoted to the library, while the museum will take up portions of the same floors but solely occupy the third.
A translucent solar ray panel on the building’s roof will help reduce energy costs. The county will benefit in energy credits for the savings.
Project Grace makes up a one-block downtown area bordered by Chestnut, Grace, Walnut and Second streets.
Coudriet said it’s the one block that is “under-performing” downtown and not bringing the value it could.
“I don’t mean just from a tax revenue perspective but there’s not a lot there other than a library that doesn’t meet the current users’ needs to draw you to that block,” he said.
Once construction of the library and museum is complete, CFD has agreed to purchase the southern portion of the site for its appraised value (no less than $3.5 million). It will be a private mixed-use development, including residences, retail and more.
CFD said previously it plans to invest $30.1 million to construct the mixed-use structure. Over the course of 20 years, an estimated $3.7 million in property taxes will come back to the county. Eckel said he has not yet finalized ideas for the private side.
“We’ve got a year and a half, we’ve got to finish the Project Grace side,” he said, “ before we even move.”
He indicated as the market shifts, plans could change. Though the team has discussed boutique hotels and a grocery store, restaurants and more.
“But it’s still a little early to really pin that down,” Eckel said.
County commissioners will have the opportunity to review the private plans for approval.
CFD partner Mike Brown explained the company’s interest in the project was tied to the ongoing revitalization of downtown. Over the last 20 years, with at least 36 new projects adding to the city’s growth, it’s shifted away from industrial and into more of a lifestyle hub with restaurants, bars and attractions.
“This is just another opportunity to really capitalize on that momentum,” Brown said. “A lot of great things are happening in Wilmington, and we think it will add to the tapestry and fabric in terms of more educational assets, more inviting, help tourism.”
Once commissioners decide how to move forward with the amended agreement, county staff will apply for the Local Government Commission to hear its plans in September for debt issuance to construct the public facility.
It will be almost exactly a year since the LGC denied the proposal due to the previous plan’s financing structure. Coudriet said he thinks the new deal will be more desirable to the commission based on last year’s feedback.
State Treasurer Dale Folwell specifically was not keen on the burden the prior plans would place on taxpayers, with an 8% profit margin for Zimmer Development Group. The prior partner on the project was going to finance the construction up front and lease the building to the county for 20 years.
Coudriet said the county has addressed the LGC’s concerns in its new deal.
“Primarily the county issuing the debt because of our tremendous borrowing potential,” he said. “We heard the treasurer: ‘Borrow money at your cost.’”
Folwell also wanted an upset bid process for the parcel being sold to the developer to ensure it was competitively priced.
Eckel added since the LGC wanted more transparency on the land sale, CFD agreed to purchase the southern parcel of the block for no less than $3.5 million. The previous deal outlined selling the property for $2.5 million.
The county will separately still have to pay for furniture, fixings and technology, a price to be brought forth to commissioners in the future.
There will be a hearing for the public to speak out about Project Grace’s financing structure at the board’s Aug. 21 meeting, 9 a.m.
Commissioners will consider the new agreement at 4 p.m. on Aug. 7 at the New Hanover County Historic Courthouse, 24 North Third St., Room 301, open to the public. The meeting can also be streamed here.
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