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City Takes Next Steps Toward Possible Purchase Of Thermo Fisher Building

By Staff Reports, posted Mar 22, 2023
City of Wilmington officials put together an illustration showing what the city would gain if they agree to buy the former PPD headquarters campus in downtown Wilmington. (Courtesy of the city of Wilmington)
Wilmington officials are moving forward on the city's potential purchase of the 12-story Thermo Fisher Scientific Inc. building in northern downtown.

In a unanimous vote, the Wilmington City Council agreed to allow the city's staff to take the steps necessary to put financing in place as they consider the deal. Also as a result of the Tuesday night vote, the council will conduct a public hearing at its April 18 meeting on the matter.

City officials in January revealed their intent to consider buying the former PPD headquarters building and its campus at 929 N. Front St. Thermo Fisher, a global pharmaceutical company, bought PPD and its Wilmington property in December 2021, announcing in April 2022 the company's aim to explore selling the campus.

In the city's plan, half of the building could be used for city offices and the other half leased to private tenants.

"The 2023 B, C and D series limited obligation bonds will be used to finance the northern downtown campus in an amount not to exceed $70 million to include an office building, parking deck and adjacent property," said Jennifer Maready, city finance director, to the council Tuesday night. "The limited obligation bonds do not require voter approval."

The city's staff estimates the financing will also require a property tax increase of 1.5 cents per $100 of value, meaning for example that property owners whose homes are valued at $200,000 would pay an additional $30 a year.

Maready also explained how each bond series would work.
  • 2023 B: Taxable variable rate, $23.8 million. "This is a seven-year term and callable at any time without penalty. The plan is that with the seven properties that council has declared surplus contingent on this purchase, as well as the two properties included with this purchase that we will also surplus, we will be able to use the proceeds from the sales of those properties to pay down this debt without penalty," she said.
  • 2023 C: Taxable fixed rate, $10.2 million.
  • 2023 D: Tax-exempt fixed rate, $34 million. "Because there is going to be private use with this purchase either leasing of office space as well as the parking deck, we are required to have taxable bonds for the allocated amount of private use," Maready said. "So we are being conservative in estimating that will be a 50/50 allocation." She said these steps are necessary to comply with IRS regulations.

Maready outlined the next steps in the process for council members. 

"We are still in our due diligence period through the end of April, and then on May 2, we are asking the LGC [Local Government Commission] to approve this financing," Maready said. "We will then price the bonds on June 28, planning on closing for the bonds on July 12 [and] entatively closing on the property the following day. We do have a hard close date of July 31."
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