A new development agreement for the redevelopment of the county-owned block in Downtown Wilmington bounded by Chestnut, Grace, Second and North Third streets will be presented to the New Hanover County Board of Commissioners at its meeting on Monday, May 15 at 9 a.m. While not required, the county will also hold a public hearing during the meeting to ensure residents can share feedback on the agreement and deal structure.
The development agreement can be viewed here.
The plan for the project, commonly referred to as Project Grace, will use a public-private partnership model and is designed to create a cultural hub with a modern and efficient Downtown Library and Cape Fear Museum facility, along with improvements to the current parking deck located on the block and new mixed-use residential and commercial development.
The new agreement is with Cape Fear Development, who approached the county in the fall of 2022 expressing interest in exploring the project, following the previous agreement for the project not receiving financial approval. Over the past six months, Cape Fear Development has conducted in-depth research, community engagement, and project evaluation to determine the merits of the development and decide whether to move forward in partnership with the county.
At the end of March, Cape Fear Development presented their findings to the Board of Commissioners at an agenda review meeting, including several potential cost savings for the project. At that time, Commissioners agreed to move forward toward a development agreement with Cape Fear Development and for staff to negotiate the terms of the agreement.
The new development agreement utilizes the same architectural design of the library and museum that was part of the previous agreement, including the location on the northside of the property to ensure continuity of operations for the current library. In addition, the agreement outlines several key terms for the project including:
- The cost to the county for the new museum and library, parking deck improvements, and development fee is not to exceed $60,524,860. The development agreement outlines that the county will borrow for the cost of this public facility, which, given the county’s AAA bond ratings, will be at the lowest interest rate possible.
- Cape Fear Development will undergo a competitive rebid process for the project, utilizing three subcontractors for each trade and New Hanover County will engage a third-party construction consultant, who will provide an independent review of the work generated. A construction manager at risk model will be used, to ensure the project can be delivered at or under budget.
- Once the new museum and library facility and parking deck improvements are substantially complete, the county will sell the south parcel of the property to Cape Fear Development for mixed-use private development.
- Cape Fear Development has committed to pay no less than $3.5 million for the south parcel property. Two appraisals will also be conducted for the property, and Cape Fear Development will pay the higher of the two appraisals if it is more than $3.5 million.
- Within 24 months of the land sale, Cape Fear Development will begin construction of a mixed-use development, which may include a combination of commercial and residential space, on the south parcel (where the existing library is located). The private investment will be the greater of $30,125,838 or 25 percent of the cost of construction and renovation of the entire project.
- The existing parking deck, once improved, will be shared between the county and Cape Fear Development on mutually agreed-upon terms.
The May 15 meeting of the Board of Commissioners will be held at 9 a.m. at the New Hanover County Historic Courthouse, 24 North Third St., Room 301. The public can attend and make comments (with a three-minute maximum) on the development agreement during the public hearing, or watch the meeting live on NHCTV at Spectrum Cable channel 13, NHCTV.com, or YouTube.com/NewHanoverCo.
If the development agreement is approved, the next steps would be for staff to finalize the design plans and for Cape Fear Development to put the construction project out for bid this month. Subsequently, a revised development agreement that incorporates the results of the bid process with final financials will be presented to Commissioners for approval in July 2023.
If approved at that time, the county would submit the final financial arrangement to the Local Government Commission for review and approval at its September meeting. Construction on the library and museum facility would then begin shortly after, if approved to move forward.