City staff are unimpressed with the developer’s renovated plans for the old Castle St.

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Plans for a refurbished old Wave Transit bus station fall short of municipal staff’s expectations for the dilapidated Castle Street property. (Courtesy / City of Wilmington)

WILMINGTON –– A former Wave Transit bus maintenance facility on Castle Street continues to experience complications in the city’s attempts to sell and redevelop it.

Tainted by failed partnerships, city staff propose that the property be set up for a new round of development proposals. The last time this happened, the city attracted only one taker.

RELATED: Despite initial enthusiasm for the Castle Street property, Wilmington received only one proposal for the land

That lessee, Clark Hipp of Hipp Architecture, requested numerous extensions, altered the site plans and did not budge on the city’s minimum demands for workforce housing. Changes were brought about by external factors, Hipp told the city, including environmental complications from the site and funding difficulties from a partnership that didn’t work.

This time around, despite attracting big names and curating detailed plans, Hipp’s latest proposal didn’t sway the staff.

Council will decide on Tuesday whether to abandon plans with Hipp and seek a new list of proposals. Although Hipp has spent funds to explore the project, neither the developer nor the city is involved in a permanent written agreement regarding the site.

Urban blight

Built in 1948, the old bus station is deteriorating. The city passed a resolution to sell the property to the nonprofit Wilmington Southside Community Development, Inc. in 2007, but the group never provided any plans and the city never executed the sale. After 11 years without a proposal, the city looked for other options to hand over the property, including exploring a sale to George Taylor, the founder of TRU Colors, the for-profit brewery that employs rival gang members in an attempt to reduce community violence. Taylor created a Delaware nonprofit, Tru Impact, to circumvent North Carolina state law and purchase the property.

The city wants to control the outcome of the old bus station, so it has so far been unwilling to put it up for public auction – a long and sometimes arduous process that would open the development of the site to the plans of the highest bidder. When selling a public good to a chosen buyer, the entity must fulfill a public objective.

Although the city attorney and Taylor negotiated at length, a deal never came to fruition after city council decided in 2019 to seek other proposals as well.

After sharing the April 2019 RFP, 17 interested parties and 13 attendees participated in the city tour day proposal for the property. Only Hipp submitted one.

The city envisaged, yesterday and today, housing of labor on the site; developers interviewed who did not submit proposals told the city it was not a viable option.

Hipp’s initial plans included 18 to 20 housing units for the workforce, the construction of 7,200 square feet of new commercial space, and the revitalization of the two arch-roofed buildings on the site. In June 2020, the number of residential units increased to 24 and new commercial space fell to 4,206 square feet.

The latest iteration shared with the city last month brought the number of workforce housing down to 15 – the city had requested a minimum of 18. Rent would be affordable for those earning 80% of the median income of the region –– the city wanted 60 to 80%. .

The original RFP requires proof of financial capacity to complete the project; although Hipp wrote to the city referring to a specific letter from a bank confirming $ 5.3 million to complete the residential portion of the project, the city never received it.

After the expiration of a first 120-day pre-development exploration agreement with Hipp, the city granted a 60-day extension in January 2020, followed by a second extension in June 2020. Although a memorandum of understanding expired in September 2020, negotiations continued until last month. .

“Due to the inability to reach mutually acceptable development terms with Hipp over the long period of exploration and negotiation,” staff recommend that the city issue a brand new RFP for the project, “Reflecting the current needs of the community, including a focus on affordable housing and community engagement,” according to a note on the article.

Hipp detailed in a letter to city staff the complications his team endured while the project continued. The potential environmental costs, which have yet to be uncovered through a brownfield deal with the Ministry of Environmental Quality, as recommended by Hipp’s environmental consultants, are the main concern.

When used as a bus station, the property had an above ground fuel storage tank. Basement conditions may prohibit residential uses on the ground floor, Hipp wrote, hence the need for the Brownfield deal – which costs $ 6,000 to apply.

The risks of unforeseen conditions that would restrict development remain in play, he told staff members.

Initially, the Cape Fear Community Land Trust nonprofit was going to purchase the property and contract with Hipp to build the units, but the land lease disrupted funding for the development, Hipp wrote.

Even with the changes, Hipp told the city he hopes the new plans for the commercial section of the site will retain the original intent to reallocate a neglected property.

Hipp has recruited Genesis Block, a business development consulting firm, which is separately proposing to revitalize the two buildings into the Castle Street Food Incubator and a center for equity and entrepreneurship.

Chief Keith Rhodes is listed as a funder of the $ 5.7 million project in the Genesis Block proposal submitted to the city. The food incubator would include a commissary kitchen, dining room and rental space to help culinary entrepreneurs. An event space and coworking space and a center dedicated to minority and women owned businesses would be built in the parallel center for equity and entrepreneurship.

The property would be subdivided according to the new plans, with Hipp taking ownership of the residential portion of the site and Genesis Block holding title to the commercial portion.

“Our group is ready to enter into an agreement with the city for the proposed redevelopment that will meet the needs of the community in general and the Southside in particular,” Hipp wrote in his letter.

The Council will consider the matter at its regular meeting on Tuesday.


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