Wrightsville Beach rescinds decision, favors de-annexation of Galleria

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UPDATE, around 9 p.m.

At the end of Wilmington City Council’s Tuesday, June 17, meeting, council unanimously approved the same inter local agreement approved by Wrightsville Beach Board of Aldermen earlier in the evening supporting the de-annexation of the 12.2 acres of the Galleria Shopping Center. The inter local agreement was added to council’s agenda after the board of aldermen supported the de-annexation.

Terms of the de-annexation stipulate payments of $7,224 for four consecutive years until 2018, and thereafter $30,000 annually for 25 years after which time the interlocal agreement will expire for a total of $779,000 through the lifetime of the 29-year agreement.

The following was posted around 6:30 p.m., Tuesday, June 17:

On June 17, State Street asked the Wrightsville Beach board to voluntarily rescind its previous decision to decline support of legislation to de-annex 12.2 acres of the town’s commercially zoned parcels, two contiguous properties–5.11 acres and 7.54 acres–it purchased in July 2013 for $3.76 million each, following the first public hearing held in June 2013. Together the parcels generate approximately $7,000 in property taxes. The initial annexation was established in 1985.

Since that time seven contiguous properties abutting the Galleria, some with frontage on Airlie Road, all within Wilmington city limits, have doubled the developer’s real estate holdings. In August 2013, Estelle L. and Bobby W. Harrelson sold 301 Airlie Road, with .776 acres for $400,000; 309 Airlie Road, with .5635 acres for $400,000; 333 Airlie Road with 1.95 acres for $400,000 and 6724 Wrightsville Avenue with .4 acres for $400,000 to State Street Galleria LLC, dba SSG-1 LLC. The same day, Estell Harrelson’s daughter and son-in-law Rhonda and Glen Ottaway sold 315 Airlie Road, with 3.94 acres for $1.1 million. Later that month on Aug. 29, 2013, James S. and Helen Lofton sold 405 Airlie Road, with 1.95 acres for $500,000. On Jan. 9, 2014 Yvonne Fraser of Laurelton, N.Y. sold 201 Airlie Road with 1.54 acres for $320,000.

Alderman Hank Miller represented IRT, the former owner of the Galleria. He admitted to introducing the owner of adjacent properties to the new owners, State Street Galleria LLC but at no time represented State Street in any transactions, though he collected fees from both parties.

Town manager Tim Owens presented State Street Galleria’s de-annexation proposal. The developer is currently planning a project that does not comply with the town’s current zoning.

Terms of the de-annexation stipulate payments from the city of Wilmington to the town of Wrightsville Beach of $7,224 for four consecutive years, and thereafter $30,000 annually for 25 years after which time the interlocal agreement will expire for a total of $779,000 through the lifetime of the 29-year agreement.

Prior to the public hearing, town attorney John Wessell said the General Assembly had the power to de-annex the property even if the town was opposed to it, citing the taking of the international airport in Charlotte and the de-annexation of the Asheville water system in 2013. Both are currently in litigation.

Mayor Bill Blair asked for a show of hands of those who wished to speak in support of the proposal.

During the ensuing public hearing,Sue Bulluck spoke, representing the Pearsall Group, owners of the Holiday Inn Resort. She is chairwoman of the Wrightsville Beach Chamber of Commerce and also a Wrightsville Beach co-property owner.

“As a victim of unintended consequences we’re in the position we’re in. We don’t have the resources to support the kind of development being proposed,” Bulluck said. “After looking at the political side and the development side, I understand exactly why State Street wants to be in the city of Wilmington.”

By putting all of the parcels together Bulluck said the developers will likely develop a high density mixed use project valued at an estimated $22 million.

“The $800,000 is probably low,” Bulluck said.”I would like to revisit the interlocal agreement and attempt to leverage more cash out of it–water, sewer and beach nourishment–maybe come up with something after the first five years when we see what’s going to be there. We have a bird in hand and have very little leverage; we have a super majority in rule and they can do whatever they want to.”

Earlier in the day, Bulluck said on behalf of the chamber she would welcome new businesses into the fold.

Former Mayor Bob O’Quinn spoke in favor of the voluntary de-annexation.

“I say this in the kindest way, the Galleria is not architecturally, geographically or spiritually associated with Wrightsville Beach. It was part of the great whiskey store chase,” O’Quinn said.

He said it would be in the best interests of Wrightsville Beach to accept the $800,00 on the table.

Mitch Baker resident of West Salisbury Street said the de-annexation is a no brainer at this stage.

Resident Jim Smith noted the $22 million deal was the equivalent of a $300,000 building permit to support infrastructure.

“I think we got what we deserve,” Smith said. “Our ordinances just don’t work for people to develop property. We’ve got to be ready or the property at the corner of Canal and Eastwood will be next.”

Zeke Partin of Lees Cut and Elise Running of Pelican Drive both pointed to the need for increased public services if the development were to go forward under the jurisdiction of the towboth n of Wrightsville Beach and supported the voluntary de-annexation as did former alderwoman Susan Collins and planning board member David Culp.

Closing the public hearing, Blair led the board to conclusion.

“The $22 million number was concocted, “Blair said. “We can hash this 100 different ways … it’s all hypothetical. The city of Wilmington is not pressing us on this; we’re all in uncharted territory.”

Blair said he accepting the financial arrangement was in the best interest of the beach.

Alderwoman Elizabeth King suggested the agreement be reviewed in the interest of escalating land values. Alderwoman Lisa Weeks reluctantly agreed to the voluntary de-annexation.

The board voted unanimously to accept the proposal.

 

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