The Wilmington Star-News has been covering the City of Wilmington’s proposed convention center. The project has been plagued with uncertainty. This uncertainty has lead officials to make some questionable decisions for the sake of the center. First, there was the new taxing district that had to be passed by the state to allow for the funneling of a higher-than-usual room/occupancy tax to cover the convention center’s build expenses. Then there were questions, eventually answered legally, about the agreement between the developer and the city. In the wake of this agreement, more concerns have arisen, this time over a development fee that was claimed by opponents of the project to have been added as a subsidy for the project. Despite this concern, the city council passed the new resolution.
Even though the Star-News has done a good job following this, they’ve failed to identify a few key questions about the agreement. Some of which are quite easy to find. From the most-recent development agreement ? not the one just voted on, but this one (.pdf) ? the city council lists the exorbitant cost of the convention center to be “up to $50 million.” The council goes on to explain in this document why this estimate is above the initial $32-35 million dollar figure. But according to newspaper accounts, the proposed convention center cost is at $52 million. The difference here (more-or-less) can be made up with the addition, and contended, $2.2 million in developer’s fees.
Also included in the new agreement between the city and the developers, is the option to buy a portion of the land designated for the parking deck for condominium development. According to the document:
A declaration of condominium (the Parking Declaration) will be recorded by the City converting the Parking Garage Site into two condominium units; . . . one Residential Unit to accommodate the final design of a residential condominium project to be designed at the sole expense of the Developer.
Further,
After subdivision of the Land and creation of the condominium units . . . the City shall obtain an appraisal of the present value of the Hotel Unit and the Option [Residential Unit purchase]. (pg. 15,16 of the City Council’s agenda, item 15)
Even though the Developer must incur costs for the development of the condo project, keeping the Garage Project in line with cost projects won’t hinder it’s ability to purchase the land later. How much do you want to bet that the expected appraised value of that land equals $2.2 million?
