Project Grace

Project Grace artist renderings

New Hanover County is redeveloping a three-acre county-owned block in downtown Wilmington that will transform the county’s downtown Public Library, a parking deck, and several underutilized surface parking lots into a purpose-built library adjacent to a modern Cape Fear Museum. The new facility will anchor cultural resources in downtown Wilmington, meet the specific and unique needs of both the library and museum, create new synergy in services, and enhance the visitor’s experience. Once the new library and museum are constructed, private development will be added to the south side of the block to compliment the new library and museum.


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Memorandum of Understanding (MOU)

The Board of Commissioners approved a MOU with Zimmer Development on March 15, 2021, that creates the framework for the project that will create a civic and arts district in downtown Wilmington, inclusive of the Public Library and Cape Fear Museum, and private development with residential & mixed useView the executed MOU here.

In addition, the Board of Commissioners will consider an amendment to the Memorandum of Understanding (MOU) at its June 20, 2022 meeting that outlines several updates to the project, including a reduced lease rate, added square feet, a new stair tower, additional private investment, and a provision to ensure the project will continue.

Financial Overview

Costs: The total lease costs paid by the county over 20 years would be $80.06 million. In addition, the county would pay $4.25 million over 20 years for city property taxes – for a total cost of $84.3 million paid by the county over 20 years.

Revenues: Estimated county revenues over those same 20 years are $11.6 million (including county tax revenue from the private development, the sale of the southern portion of the property for private development, and revenues from the sale of parking spaces for the private development). More than $13 million in additional revenue to the community is also expected from the private development (including room occupancy tax, sales tax, and city taxes). These are all conservative estimates, and given current market values would likely be higher.

Benefits of a public-private partnership: Based on early projections, the estimated costs to the county if it were to build the project on its own, outside of the public private partnership, would be approximately $66.8 million. With all of the above financial estimates, there would be a net benefit of $7.1 million to the county and community from the partnership over 20 years. In addition, the public-private partnership is beneficial to the county because the MOU outlines the specific private investments for the block and ensures they are compatible with the public uses on the site. If the county were to simply sell the land to a developer, they would have the right to construct anything on that portion of the block within the current zoning or with a rezoning by the city, and the county would not have control over the uses or the timeframe for the private investment to take shape.

Schematic Design is the phase where the vision of the project begins to take shape in the form of exterior design renderings and floor plans.

This phase was informed by the Discovery Phase that was completed in July, which produced bubble diagrams with key programs and space needs identified by Library and Museum staff. During the Schematic Design phase, the development team has continued to meet with Library and Museum staff to understand how each organization works, including their processes and workflows. This guides the work of the design and helps the architects determine where to place rooms and services in the building – making it a purpose built, modern facility. There are still a lot of details to be finalized and the final design of the building has not been completed, but this gives us an idea of what we can begin to expect once the building is constructed and how our citizens will experience the inside of the facilities.

View the exterior design renderings here and floor plans here, and watch videos that showcase each below.


Discovery Phase:

The first step for the project in 2021 was a discovery phase for LS3P Architecture to become familiar with the needs of the Public Library and Cape Fear Museum, and meet directly with staff to understand their goals, needs, and ideas for a new facility. A overview of this work can be read here and the findings are summarized in LS3P’s Discovery Phase Report here.

What is the goal of the project?

The primary goal of the project is to have a new, purpose-built, modern facility in downtown Wilmington that brings the Public Library and Cape Fear Museum together and meets the specific and unique needs of both, creating new synergy in services and enhancing the visitor’s experience


What services will the library have? 

The library will continue to provide adult services, children services, and local history services, and will be adding enhanced teen and tween services to ensure all our citizens have a place to learn and grow.  The library will also have two outdoor reading terraces, one dedicated specifically to children on the first floor and one dedicated to adults on the second floor. Additionally, the library will have shared multi-purpose space for more programming opportunities, as well as a lot of natural light to ensure it is a welcoming and open space.


What services will the museum have? 

The museum experience will be greatly enhanced with a planetarium/immersive theater, gallery for Cape Fear Stories, health and nutrition gallery, Science Matters gallery, outdoor exhibit space, and a changing gallery to accommodate a wider range of traveling exhibits. There will be plenty of outdoor space dedicated to the museum and for the community to use for celebrations and meetings, and shared multi-purpose space for additional programming opportunities.


What does the Local Government Commission (LGC) approve related to the project? 

The LGC is responsible for reviewing the proposed lease agreement between New Hanover County and Zimmer Development to ensure it positions the county and our taxpayers in the best financial situation given the parameters of the market and the county’s financial standing.  

A decision is based on five criteria found in N.C. General Statute 159-52b, which you can see here. The LGC is not voting on the overall plan for the block or the Memorandum of Understanding, but the lease agreement the county is requesting to enter into with Zimmer Development. 

The New Hanover County Board of Commissioners has requested Treasurer and LGC Chair Dale Folwell to calendar a vote on the lease agreement for the LGC’s next meeting on September 22.   


When will construction begin? 

Construction documents are anticipated to be finalized in Summer of 2022 with construction of the new facility beginning potentially in late summer or early fall, following a decision by the LGC on the lease agreements. Construction of the new public facility would take about two years, and then work on the private development side could begin. 


What are the benefits of a Public Private Partnership for this project? 

The Public Private Partnership (P3) model, which is authorized by the General Assembly, guarantees the county has final approval in how the entire project and block is developed. Not only is the county able to direct the public facility and uses on the site, it is also able to determine how the remaining land is used. 

Under the Memorandum of Understanding (MOU) for the project, the developer will manage the construction of both the public and private facilities on the site and, at the end of construction on the library and museum components, the county will have a twenty-year lease on the buildings that is inclusive of the construction, furniture and fixtures. At the end of the twenty-year term, New Hanover County will own the public components at no additional cost.

With this model and the MOU, the private investment includes new retail space, apartments with workforce housing, and a hotel. It outlines a minimum investment of $30 million – which would add to our tax base, room occupancy tax, municipal services district revenues and sales taxes. And it ensures this is done within a set timeframe, so these benefits are realized in a timely way.  

If the county were to work outside of a P3 model and instead use the upset bid process for the sale of the remaining property, the parcel would go to the highest bidder and the county would have no control in what happens to the land and how it is redeveloped. The county cannot attach conditions of use on a transaction with a private buyer unless it uses the P3 model.  

With a P3, the county can guarantee the entire block is a compatible with the public purposes on the site and fits the county’s vision, and that it is built out in a timely way that benefits the general public.  


How was the developer chosen? 

In 2018, the New Hanover County Board of Commissioners approved moving forward with a Request for Qualifications (RFQ) and Request for Proposals (RFP) process regarding the potential redevelopment of this block. The county’s goal was to find a qualified and experienced development partner that would help bring the museum and library facilities to fruition while also transforming the remainder of the block into a space that could serve residents and visitors with uses that are in line with the county’s vision. 

The county solicited development teams through the regular bid process and also shared the requests with professional associations that developers monitor to ensure development teams across the country were aware of the project. Based on market conditions at the time and the scope of the project, the process drew one full proposal from Zimmer Development, a Wilmington-based developer with more than 30 years of experience in the field and in this community.  

After a dedicated evaluation and assessment by the county, Zimmer was deemed a valuable partner in this endeavor and the county entered into a P3 – Public Private Partnership – with them.   


Could the county finance this project on its own? 

New Hanover County could issue debt for the public facility on its own (approximately $51 million) and pay the interest on that debt over 20 years (approximately $15 million), for a cost of roughly $66 million. However, construction costs are consistently increasing so the overall cost of construction could likely be higher than this if the county were to go out to bid based on current market rates.  

The proposed lease agreement with Zimmer is fixed and would not change at $4 million a year, so $80 million over 20 years. The difference between the county borrowing the money at the approximate cost noted above or leasing the facility to own at the end of the 20-year term is $14 million.   

This difference, however, would be offset by the developer’s private investments of not less than $30 million, over the same time period and the associated revenues that accrue to the public benefit of more than $20 million (from property tax, sales tax, room occupancy tax, and municipal services district revenues). And these revenues from the private investment continue to pay and grow year over year in perpetuity.  


Is this project similar to the Government Center redevelopment?

They are both public private partnerships. However, by the very nature of a public private partnership, no two are the same and they are unique based on the needs of the public interests and the market demands at the time.

For the Government Center redevelopment, the developer was willing and able to change its business model within the public private partnership established and allow the county to finance the public facility on its own while continuing to commit to the development agreement. With this change, the agreement still guarantees the private development on the site, the priorities and timeline of that development, and ensures it is compatible with the county’s vision and the public uses. For the Government Center project, the county borrowed the money to build the public facility and the private investment remained the same; but with that change, the county agreed to allow the developer to pay fair market value for the remaining property as opposed to the premium rate the developer had been willing to pay. This, in turn, resulted in the county receiving less back for the property’s purchase price.

Project Grace is in a much different market with different market conditions than the Government Center redevelopment was. And in this case, the developer’s model is focused on a full public private partnership with developer financing for both the public and private uses.


What happens to the current Cape Fear Museum building?

New Hanover County values our region’s rich and diverse history, and the museum’s work in preserving that history and educating the community. The county will maintain the current museum property on Market Street as a research and collections facility, effectively doubling the overall space allocation for the museum.


Would the proposed residential units be affordable?

Under the MOU, the developer has committed to no less than 5% of the multifamily units being workforce housing for a period of no less than 10 years.


Is parking on the block being factored into the project?

The parking deck on the site will remain and the county, as the current owner of the 620-space parking deck, will continue to manage the deck. Parking will be provided for the museum and library patrons as well as private development. 


When will the private side of the block be developed? 

Once the construction of the new library and museum building has been completed and opened to the public, the construction of the private development can begin. 


What’s included in the private development? 

Zimmer Development Company has committed through a Memorandum of Understanding to include multifamily housing with a portion dedicated to workforce housing, a hotel, and commercial/retail uses on the site. 

Below is a detailed timeline of the project:

Project Timeline Date
Solicitation/Phase I: Request for Qualifications (RFQ) released April 30, 2018
Statements of qualifications from project teams due June 15, 2018
Project team evaluations July 2018
Recommendation to Board of Commissioners on how to proceed to a Request for Proposals (RFP) September 17, 2018
Top qualified teams invited to submit full proposals October 2018
Full proposals due December 2018
Evaluation of proposals, including public input and an independent financial analysis January-March 2019
Recommendation to Board of Commissioners & decision on next steps Spring 2019
Development team reviews site alternatives 2019-March 2021
Board of Commissioners hold public hearing & approve MOU March 15, 2021
Discovery and review period, schematic design, design development & construction documents Early 2022
Memorandum of Understanding updates and finalization, public hearing, and lease agreement review by the Local Government Commission Summer 2022
If approved to move forward, permitting & construction would begin Tentative: Late Summer 2022

 


In response to New Hanover County’s Request for Proposals (RFP) in 2018, a full proposal was received from Zimmer Development Company and team. At the April 14, 2019 Board of Commissioners meeting, Commissioners discussed the project and unanimously approved a motion to explore alternative options for the county-owned block in downtown Wilmington and to also begin discussions with the Zimmer Development team about the details of their current development proposal. In 2021, the developer proposed a Memorandum of Understanding (MOU) to redefine and restart the project, and the Board of Commissioners approved the MOU on March 15, 2021.

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