THE RIGHT MIX

RENDERING C/O LS3P

Ardmore, a three-story building set for the corner of South 17th and Church streets, is an example of a mixed-use structure planned in Wilmington. The development by Wilmington-based PBC Design + Build includes 25 apartments and two commercial spaces.

THE RIGHT

MIX

DEVELOPERS WEIGH HOW MANY USES MAKE SENSE IN MIXED-USE PROJECTS

BY CECE NUNN

Architect and developer Clark Hipp envisions something better for a defunct, city-owned property in downtown Wilmington.

The forlorn site at 1110 Castle St. still holds buildings from when it was used for bus maintenance, but it isn’t used for anything now. The property is in a historic area of the Port City that in some places has seen better days, while in others, revitalization efforts have advanced, adding new homes and businesses.

Hipp’s proposed redevelopment calls for renovating two existing buildings at the site, which holds former Wave Transit bus maintenance bays, and creating two multistory structures with ground-level commercial storefronts, affordable condos and apartments, on-site parking and open space.

Hipp said the property is well-suited for the project.

“Successful urban redevelopment typically has a mix of uses, not just a single office tower or a single residential tower,” Hipp said. “We feel like a mix of uses would be the best not only for our project but also for the neighborhood.”

Hipp’s proposal has faced significant delays, the most recent question being through what mechanism the ownership would transfer to the developer, but Hipp said that he is hopeful it will be resolved soon.

That’s one of the challenges faced by the Castle Street project. Mixed-use development in general doesn’t always have a smooth road to fruition. In the case of infill or redevelopment, opposition might come from neighbors who don’t want a particular housing type near their homes, who don’t want existing parking

Glenn Harbeck, director of planning, development and transportation for the city of Wilmington, says mixed-use development has the potential to address growth issues. Some of those, according to Harbeck, are: • REDUCES AUTOMOBILE DEPENDENCY and traffic congestion, as well as accommodates more people moving to Wilmington without overwhelming the city’s street infrastructure • MAKES WILMINGTON MORE WALKABLE • PLACES HIGHER-DENSITY MULTIFAMILY housing where it belongs, adjoining services rather than in stand-alone locations where automobiles are required for everything • PRESERVES NATURAL COASTAL ECOSYSTEMS by reducing urban sprawl caused by the 20th-century idea of widely separating residential and nonresidential land uses • CAN PROVIDE A HIGHER QUALITY OF LIFE and meet the desire for convenience for those who want to have a more active lifestyle and be close to services and activities without the property maintenance that comes with a singlefamily home

Developer and architect Clark Hipp wants to turn a defunct city-owned property at 1110 Castle St. in Wilmington into a mixed-use project.

spaces used for the development’s stores or restaurants or who simply don’t want any more development whatsoever, citing quality-of-life concerns.

Then there’s the question of how much of a mix a mixed-use project should have.

“The challenge is that there’s no right formula,” said Anthony Chang, chair of one of the Urban Land Institute’s urban development mixeduse councils.

Chang is also responsible for the commercial portfolio of Washington Real Estate Investment Trust, which is composed of office buildings with mixed-use retail on the ground floor and retail centers.

One of the reasons for the absence of an exact formula for a mixed-use project is the frequently changing nature of how and where people want to spend their money.

“I think retail has been going through a seismic transition before the pandemic, with Amazon and digital and clicks to bricks, and really pushing toward experiential real estate,” Chang said. “You see a lot more axthrowing places now that didn’t exist as a concept five years ago, and that’s (and experiential commercial uses in general) hit a hard pause because of the pandemic. I believe it’s going to come back, but what that outlook’s like, it’s hard to say.”

What’s not hard to say is that if a mix doesn’t work for a developer, the project or pieces of the project won’t get built, Chang said.

Sometimes the mix depends on what’s going on in the neighborhood and the broader community, he said.

“If you have the demographics to bring in retail first, then you layer in apartments and then you layer in office,” Chang said. “It really depends on where the demand is, and right now in the pandemic, there’s so many trends at work that are so fluid that it’s hard to predict next year, much less three to five years from now when things would actually get built.

“So I think the overarching trend is just seeking flexibility.”

In Wilmington, developers and commercial real estate brokers have said a recent change by city officials has made it harder to develop apartment projects that might have included some retail.

The change is a requirement (with exceptions) of 20% commercial space in mixed-use projects that fall within commercial districts and the Commercial District Mixed Use (CDMU) zoning designation. In October, city officials approved the change, now considered a closed loophole, but some developers say the requirement negatively impacts potential financing and viability of projects.

“When it was adopted back in 2002 it was intended to be primarily a commercial development with some residential mixed in, but there were never any percentages specified,” said Glenn Harbeck, the city’s director of planning, development and transportation. “It was kind of like discovered, ‘Hey I could do a CDMU development, and I’ve got 1,000 feet of nonresidential space, then that’s a mix of use.’”

The loophole meant there essentially were no density requirements for a multifamily project using the CDMU zoning, Harbeck said.

“And if you’re a developer, what more would you like than to have no requirements whatsoever (for density),” he said. “I think (city council members) finally recognized that it

was being abused.”

Ardmore, a three-story project on 17th Street in Wilmington, is an example of a smaller mixeduse development. Construction is underway on the structure, which will include about 1,700 square feet of commercial space and 25 residential units.

“For the most part, we’ve avoided including mixed use because the building code requirements between residential uses and commercial uses add cost to the project,” said David Spetrino, president of PBC Design + Build.

Another proposed major mixeduse redevelopment that has moved forward recently is Project Grace, which would be a public-private partnership between Wilmingtonbased Zimmer Development Co. (ZDC) and New Hanover County.

The proposed $107 million redevelopment would transform a 3-acre, county-owned block in downtown Wilmington, bordered by Grace, Third, Chestnut and Second streets, into a modern mixed-use project with public and private facilities.

In the proposed Memorandum of Understanding created by Zimmer, the project could include a new public library, a new location for the Cape Fear Museum and 75,000 square feet of city offices. The private portion, said Adam Tucker, director of development for ZDC, might include apartments and potentially some retail components.

ZDC has mixed-use projects throughout the county, including in Tallahassee, Florida; Columbus, Ohio; and Richmond, Virginia. It’s planning a 40-story building in Raleigh that would have commercial space on the bottom.

And Zimmer was one of the developers of Mayfaire, which has been one of Wilmington’s most successful examples of a mixed-use project.

“I think it was ahead of the curve. For Wilmington, for the most part, there wasn’t really anywhere else in town. There were plenty of examples throughout the state, in Raleigh with North Hills, Southpoint in Durham and Charlotte has multiple developments that it was modeled after,” Tucker said. “I think that the planning that went into it, and the location being somewhat close to the beach and having the ability to find that much land available within striking distance of everywhere in town helped make it a success.

Landon Zimmer, managing partner of ZDC, said, “The top retailers still, it appears to us, prefer there versus any other location.”

When it comes to Project Grace, ZDC had entered into public-private partnerships with universities before but not with a county or municipal entity.

“Given the fact that it was in our backyard, and we’re located downtown, and of course, the Zimmer family is in its third generation here, we felt like we were a good fit to at least throw our name in the hat,” Tucker said. “And we actually ended up getting selected, which we were thrilled about.”

As of press time, New Hanover County officials were set to consider the MOU for Project Grace on March 15.

When it comes to mixed-use in general, Tucker said requiring certain percentages for a project has its place to some degree, “because a lot of mixed-use codes will say 25% of the use has to be commercial or 25% has to be residential. So I do think that there is a balance on that because people will try to skirt the system and … build 500 units and put 1,000 square feet of retail or a kiosk in the bottom and call it mixed-use.

“So I do think that there needs to be some balance between the uses in order to make it work,” he added. “Exactly what those numbers are, I don’t think anybody knows, or everybody would do the same thing. But I do think that there is merit to balancing the uses and ensuring that you do get proper mixes.”

PROJECTS UPDATE

HERE IS THE STATUS OF SEVERAL OTHER MAJOR MIXED-USE PROJECTS PENDING IN NEW HANOVER COUNTY.

NORTHERN GATEWAY

THE NORTHERN GATEWAY PROJECT PLANNED FOR DOWNTOWN WILMINGTON HAS STALLED. CITY OFFICIALS HAVE SAID THE $90 MILLION PUBLICPRIVATE PARTNERSHIP WOULD HAVE TO WAIT AS THEY RESPONDED TO THE HEALTH AND FINANCIAL CRISES BROUGHT ABOUT BY COVID-19. CHAPEL HILL-BASED EAST WEST PARTNERS HAS PROPOSED BUILDING RESIDENTIAL UNITS, RETAIL SPACE, A HOTEL, A VISITORS CENTER AND PARKING ON SEVERAL CITY-OWNED PROPERTIES ON NORTH FRONT AND THIRD STREETS.

CENTERPOINT

IN 2017, SWAIN & ASSOCIATES DEVELOPERS ANNOUNCED PLANS FOR CENTERPOINT, A $250 MILLION MIXED-USE DEVELOPMENT ON EASTWOOD AND MILITARY CUTOFF ROADS IN WILMINGTON THAT WOULD INCLUDE A HOTEL, AN OFFICE BUILDING WITH A PARKING DECK, APARTMENTS WITH A PARKING DECK, RESTAURANTS AND STORES. CENTERPOINT’S CONSTRUCTION IS WAITING FOR THE N.C. DEPARTMENT OF TRANSPORTATION TO START PROJECTS FOR MILITARY CUTOFF AND EASTWOOD ROADS. MEANWHILE, THE NCDOT IS FACING ITS OWN DELAYS AND FUNDING ISSUES.

THE AVENUE

PLANS FOR THE AVENUE, A MORE-THAN-$200 MILLION DEVELOPMENT TO BE BUILT ON MILITARY CUTOFF ROAD IN WILMINGTON, ARE PROCEEDING BUT COULD INCLUDE SOME CHANGES, PARTICULARLY TO WHAT GETS BUILT FIRST, AS A RESULT OF COVID-19. ROY CARROLL, OWNER OF THE AVENUE DEVELOPMENT FIRM THE CARROLL COMPANIES, SAID THAT CONSTRUCTION ON THE DEVELOPMENT’S ANCHOR, A WESTIN HOTEL, WILL LIKELY BE DELAYED AS A RESULT OF THE PANDEMIC-CAUSED SLOWDOWN IN THE HOSPITALITY INDUSTRY. ANOTHER POTENTIAL CHANGE IS THE AMOUNT OF RETAIL SPACE PLANNED FOR THE FIRST FLOOR OF SOME MIXEDUSE BUILDINGS THAT INCLUDE APARTMENTS.

GOVERNMENT CENTER REDEVELOPMENT

A $120 MILLION PROJECT WILL TRANSFORM THE SITE OF THE NEW HANOVER COUNTY GOVERNMENT CENTER. THE REVAMPED PROPERTY IS EXPECTED TO HOLD A NEW FACILITY FOR COUNTY OFFICES, INCLUDING AN EXPANDED EMERGENCY OPERATIONS AND 911 CENTER, AND COMMERCIAL AND RESIDENTIAL SPACE. CONSTRUCTION IS EXPECTED TO BEGIN IN MARCH.