At its January 24 regular meeting, Wilmington City Council will consider an agenda item to provide a fully refundable $500,000 earnest money deposit to explore purchase of a 12.5-acre campus in the city’s northern downtown. The deposit provides the city with 120 days to evaluate all aspects of the potential acquisition. The campus includes a 1,000-space parking deck, 370,000 square feet of office space, and two adjoining development tracts.
The office building currently houses Thermo Fisher Scientific’s Wilmington offices and the purchase agreement would include a lease for a portion of the building to Thermo Fisher for a period of at least three years. The city would occupy a significant proportion of the building and the rest of the space would be made available for lease at market rate.
The purchase agreement includes a negotiated sales price of $68 million for the entire campus, including office furnishings, which reports a combined real and personal property tax value of $141 million as of 2022. The city’s costs could be substantially offset by selling several of its current office buildings, which would no longer be needed, excluding historic Thalian Hall/City Hall. Selling the adjoining development lots and leasing excess office space would further offset the city’s acquisition costs. Depending on final terms, the Thermo Fisher lease could generate around $2 million annually and additional space would also be made available for lease.
Acquiring the campus would allow the city to:
- Consolidate departments currently housed across multiple different office buildings under one roof and meet the city’s long-term space needs
- Divest as many as six city office facilities that would no longer be needed, providing new opportunities for downtown revitalization
- Utilize the campus’s existing parking deck to provide additional parking capacity for the city’s growing northern downtown, including the nearby Riverfront Park and Live Oak Bank Pavilion
- Sell or otherwise develop the campus’s adjoining development tracts to offset acquisition costs and further bolster revitalization efforts in the former industrial site
In 2021, the City of Wilmington hired an architecture firm to conduct a long-term space needs assessment. Over the course of many years, city departments grew to occupy multiple office facilities, including several aging facilities with increasing costs to operate and maintain. In November 2022, the architecture firm presented a final report, estimating $90-96 million in capital needs to redevelop a right-sized city administration building.
“In view of our space needs assessment, acquiring this 12.5-acre campus in northern downtown could provide a highly creative and far more cost-effective solution to the city’s long-term space needs, especially in view of the opportunities to offset the purchase cost and add parking capacity. Over the course of the 120-day due diligence period, city staff will thoroughly analyze the costs and benefits of the acquisition so that City Council can make an informed decision,” said City Manager Tony Caudle.