• 79°

Moss Partners wins approval

By By MIKE VOSS, Contributing Editor
Washington's City Council, in a 4-1 vote Monday, chose Moss Property Partners to develop the former Moss Planing Mill property, and perhaps the former Evans Seafood site.
It turned down a development proposal offered by East West Partners Management Co., which is based in Chapel Hill. The involvement of local investors in the MPP proposal apparently appealed to some council members, especially Councilman Ed Gibson, who voted for MPP along with council members Ed Booth, Emma Howard and Richard Brooks. Mayor Pro Tempore Judy Meier Jennette voted against the MPP plan.
Jennette said she leaned toward the East West proposal, which she described as "a little less speculative in nature" than the MPP proposal.
"I just feel a little more comfortable with East West," she added.
The city and MPP will negotiate details of a proposed purchase agreement, including whether the city sells the Evans property or keeps it. A public hearing must be conducted on any purchase agreement (drafted by attorneys for the city and proposed purchaser) before the council votes on such an agreement.
MPP offered $50,000 more for both parcels. MPP tendered $1,775,000 for the two sites, with East West bidding $1,725,000, including $420,000 for the Evans property. East West offered $1,305,000 for the remaining 8 acres of the Moss site, while MPP offered $1,565,000 for the Moss property.
The "best and final" offers from East West and MPP were received last week.
MPP pointed out there are three main advantages to its offer when compared to the East West proposal. According to MPP's latest offer, those advantages are:
MPP closes almost immediately on the property without conditions so it can begin its predevelopment activities.
The MPP plan provided the council two options to consider when it comes to the Evans site.
Under the first option (to be exercised anytime within 18 months after closing on the Moss property):
Under the second option, if the city declines the first option, MPP will buy the Moss and Evans properties for $1,775,000.
MPP is a joint venture between Washington Betterment Partners and more than 40 local investors.
Jay Mahan, president of Davidson &Jones and a WBP principal, told the council the hotel and conference center idea offers better economic opportunities, including revenues from the city's occupancy tax on hotel, motel and other accommodations. Mahan acknowledged MPP may or may not build a hotel and conference center on the 4 acres reserved for such facilities.
The MPP plan calls for building about eight to 12 townhouses on Water Street at the east end of the property and about 40 to 50 luxury condominiums along the eastern and southern property lines. It also proposes reserving 4 acres of the Moss site for eventual development of the hotel and conference center until the earlier of the following "triggering" events occur:
Although Washington Betterment Partners received approval for its proposed hotel and conference center from the city's Historic Preservation Commission, the commission would have to approve a certificate of appropriateness for residential development. That also applies to East West's plans to develop the Moss site for residential use.
The major change to the East West offer was the entire purchase price – $1,305,000 – for the Moss site would be paid at closing, which would occur 60 days after the purchaser receives all necessary approvals – including permits for boat slips – to begin construction of the proposed development.
"We believe that this is a significant change in that the city will not be asked to finance this site and a majority of the purchase will be paid to the town within a short time frame. This will also remove considerable long-term risk to the city and free up funds for other city needs," reads a part of the latest East West offer.
The East West offer provided a $420,000 payment for the Evans site, with that payment being made at any time to release that site for development.
Jim Wiley, managing partner for East West, told the council his company is known for buying, then developing properties.
"We don't buy them to sit on them," Wiley said, referring to MPP's plans to reserve 4 acres of the Moss site as a possible location for a hotel and conference center in the future.
He noted that in the past two years, attempts to put a hotel and conference center on the Moss site had proved unsuccessful. He asked the council to consider the likelihood of a hotel and conference center being built on the Moss site within the next five years.
He told the council that East West believes the land is "best suited" for residential development.
New park plans
Before the city received initial proposals from East West and MPP, it was approached by officials with the Pamlico-Tar River Foundation and the N.C. Coastal Federation, who suggested a plan to use the Moss property for a park and/or passive recreation. The two groups, in the fall of 2002, suggested the city consider allowing the state, through the Clean Water Management Trust Fund, to buy a conservation easement for the Moss site, effectively stopping commercial and/or residential development of the site.
Mayor L. Stewart Rumley said he conducted an informal poll of council members, with most council members telling him they were not interested in the proposal. In 2001, the council said it wanted to sell the Moss site so it could be developed.
After the council's decision on the Moss site Monday, Connie Cole of Chocowinity asked the council to consider turning the property into a park. She said that would be the best use of the waterfront land.
Nonprofit vote
In other business, the council unanimously appropriated $850 to hire consultant Bob Murphrey to conduct a four-hour workshop on setting up a nonprofit organization to serve Washington and prepare documents that would lead to creating a nonprofit organization to oversee commercial development in and revitalization of the city's downtown area.
The council also appropriated $2,000 to cover any additional expenses related to setting up the nonprofit group.
"We think this is a challenge we can achieve," said Patricia Rawls, chairwoman of the Downtown Washington Development Commission, to the council Monday. The council charged the DWDC last fall to explore the feasibility of setting up such a nonprofit organization.
Rawls told the council the Beaufort County Committee of 100 has said it will reimburse the city for its $850 appropriation and the $2,000 appropriation, if that money is spent.
Rawls noted the group's nonprofit status will have to be approved by the state and the federal Internal Revenue Service. State approval should take a few weeks, but IRS approval could take several months, Rawls noted.
As she did during a City Council planning session last month, Rawls told the council she believes the nonprofit group should focus on economic restructuring – how to invest money so it benefits the most people with interests in the downtown and waterfront areas. One of the nonprofit group's jobs should be finding ways to bring more customers and tourists to the downtown area, she added.