The City of Wilmington and Harmony Hospitality, LLC, have agreed to extend the deadline for closing on sale of the 0.76 acres of land for the Wilmington Convention Center hotel until November 30, 2014. City Council approved the sale of an approximate 33,000-square-foot unimproved parcel to Harmony for $578,820 Feb. 5, 2014.
The land sale included a purchase and development agreement that required Harmony to construct a 186-room Embassy Suites Hotel next to the convention center. The $33.6 million hotel will include a full-service restaurant, bar, pool and additional meeting space.
The sale price was $578,820, $741,180 less than the appraised fair market value of the property. Ingram and Company, Inc. appraised the property at $1.32 million in September 2013. The value of the land listed on the New Hanover County property tax website is $875,500.
Following city council’s approval of the agreement, Glenn Wells and Sotherly Hotels, Inc., which owns the Hilton Wilmington Riverside, sued the city on the grounds that the agreement violated a Consent Judgment from 2006 that stipulated no public funds of any nature should be used to acquire, build, equip, operate or otherwise underwrite or subsidize a convention center hotel or its operation.
In June 2014, the Superior Court determined that no violation existed and the development agreement was in conformance with the 2006 Consent Judgment. Despite the Superior Court’s decision Glenn Wells and Sotherly Hotels, Inc. appealed the lower court’s ruling to the North Carolina Court of Appeals in August 2014. The appeal is still pending.
The appeal has impacted the proposed deadlines set out in the development agreement. Although the deadline to finalize the sale was earlier this month, Harmony requested and the city agreed to extend the deadline for closing on the sale of the land for the hotel until Nov. 30, 2014.
The amended agreement allows the city to buy back the land from Harmony at the original purchase price if the pending appeal is successful and a decision is entered that is adverse to the city, or if Harmony cannot secure adequate financing by December 31, 2015.
The city expects to publically announce closing on the land sale in the next few weeks.
