Project Grace Update: MOU revisions & LGC meeting 

Posted September 16, 2022 at 6:15 pm     Category: County Commissioners

Update, Monday, September 19:

The Board of Commissioners, at its regular meeting on September 19, approved the updates to the Memorandum of Understanding with Zimmer Development Company, as outlined below. The next step for the project is the Local Government Commission meeting on Thursday, September 22, where the project’s lease agreement will be considered.


 Original Post, Friday, September 16

New Hanover County received a letter on Thursday, September 15 from State Treasurer Dale Folwell, who also chairs the Local Government Commission (LGC), requesting three technical edits to the Memorandum of Understanding (MOU) between New Hanover County and Zimmer Development Company for the construction of the county’s Public Library and Cape Fear Museum, which is part of the Project Grace public private partnership.  

While the MOU is not required to be approved by the LGC, the Treasurer’s Office is seeking Board of Commissioner’s formal approval for edits to the MOU.   

So an additional item will be brought to the Board of Commissioners’ regular meeting on Monday, September 19 at 9 a.m. for discussion and a vote. In that item, staff is recommending the following edits to the MOU to address the Treasurer’s suggestions: 

  • Removal of the reference to the LGC where it notes that if the LGC does not approve the lease agreement or if either party terminates the agreement, then the county will purchase the design plans for a not to exceed amount of $2.5M. The proposed staff change strikes the language of LGC approval, which will leave the agreement to read that if either party terminates the agreement, the county will purchase the plans for a not to exceed amount of $2.5M.   
  • Adding in that if any change orders arise during construction, they will be reviewed by both parties to determine any offsetting cost decreases; and should the change order become material enough to increase the annual lease payment, the county will request approval from the LGC for such changes.  

In addition, to provide clarity on the project plan, county staff is recommending that additional language be added in the MOU that defines the mixed-use component, to include a hotel of at least 151-bedroom capacity, in addition to the uses previously defined in the MOU.   

The letter from Treasurer Folwell also requests changing the method used to sell the private-use portion of the property from a negotiated sale with the project developer to a public bid/upset bid process. Staff is not recommending that this change be included in the amendment to the MOU because the county believes using its authority under Session Law 2017-86, House Bill 397 to enter into a private sale for fair market value is the most appropriate method under the public private partnership agreement. Under the current agreement, the county can determine what will be on the site and the timeframe it will be developed, and will ensure fair market value is received for the property through independent appraisals. 

In addition to the requests outlined by the Treasurer, the LGC has confirmed that the project’s lease agreement will be on the September 22 LGC agenda for formal consideration and a vote. 

For more information about Project Grace, visit NHCgov.com/project-grace. 

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