NEW HANOVER COUNTY — County commissioners agreed Monday to approve spending an additional $21.5 million to cover direct costs for Project Grace’s museum and library exhibits in downtown Wilmington, raising the total to more than $77 million.
READ MORE: County seeks artists for Project Grace sculpture to honor Michael Jordan
ALSO: $4.6M savings: Commissioners to consider amending agreement for Project Grace
Project Grace aims to revitalize a roughly 3-acre block of downtown Wilmington on Grace, Chestnut, North Second, and North Third streets. It’s combining new construction of a downtown library and the Cape Fear Museum, including a planetarium, the latter scheduled to open this spring.
Commissioners approved a development agreement in 2023 with Cape Fear Development to complete the project for a guaranteed maximum price of $55.9 million. The development team also includes Monteith Construction and architecture firm LS3P.
On Monday, commissioners adopted a budget amendment to cover $21.5 million in “direct costs” for exhibit design, fabrication, infrastructure and installation ($14.7 million), as well as infrastructure ($2.9 million) furniture and equipment ($1.7 million), security ($1 million), and special inspections ($550,000), among other items.
NHC Chief Facilities Officer Sara Warmuth said during the meeting the county originally expected in June 2022 for exhibits to cost $7.5 million. But it’s increased due to inflation, upgrades to the dome theater, a Curious Nature exhibit, and other changes.
Staff also found transferring some exhibit installation responsibilities to Cape Fear Development and Monteith Construction would be more efficient than relying on other contractors.
So $5.4 million of the newly allocated $21-million funds will go to the county’s development agreement with Cape Fear Development. The guaranteed maximum price is now increasing to $61.3 million, up from $55.9 million, approved two years ago.
“Primarily that consists of some really big exhibit items,” Warmuth said. “Our lucky climber, boss water table — these are elements that are really part of the building. In addition they’ll provide exhibit infrastructure. A good example of this is a partition wall. It is definitely to our benefit to have Monteith as the contractor build a partition wall for exhibits compared to paying the exhibit fabricator.”
Commissioner Rob Zapple emphasized during the meeting that the new contract amendment was not triggered by the development team. He clarified as much to Port City Daily Tuesday as well, noting while total costs of the project were going up, the additional appropriation was the county’s initiative rather than at the contractors’ request.
“The distinction I was trying to make on Monday was this wasn’t Monteith coming back to us saying: ‘Hey, we underbid this and we need another $5.4 million to finish,” Zapple told Port City Daily. “No, we’re going to shift $5.4 million back to you because you can do it better.”
CFD signed a contract for its public-private partnership with the county for Project Grace in May 2023 with a guaranteed maximum price of $60,524,860. After finalizing its design and competitive bid process in August 2023, the development team identified $4.6 million in potential savings for the project. Commissioners approved an amended agreement that month with a guarantee that the total cost of constructing the new museum, library, parking deck improvements, and development fees would not exceed $55.9 million.
The Local Government Commission — previously chaired by former Treasurer Dale Folwell — approved the county’s request for a $53.28-million issuance of limited obligation bonds with 5% interest to finance Project Grace in October 2023. The LGC voted 5-4 with Folwell — who rejected previous iterations of the project — among dissenters. He argued the county should not use debt to pay for the project and raised concerns about transparency.
The county is drawing funds from other accounts to cover the $21.5-million Project Grace direct costs budget, including $4.9 million in employee retiree medical benefits and $4.37 million from the general fund.
According to the August 2023 development agreement, total construction costs were estimated to be $49.38 million at the time. The recent April cost summary includes modifications and clarifications of Monteith Construction’s estimate, with total construction costs increasing by $3.27 million for a $52.65 million total.
Design and engineering costs also increased from $1.8 million in 2023 to $2.7 million today. The project’s contingency fund also expanded roughly $1 million from $1.8 million in 2023 to $2.8 million in the current agreement.
Upon completion of the project, Cape Fear Development will purchase the southern parcel (201 Chestnut St.) of the Project Grace block from the county at a minimum of $3.5 million. The county plans to use the funds to cover Project Grace expenses.
The county’s 2025 total appraised value of the southern parcel land and building is $16.1 million.
Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.
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