City Officials Propose Tax Increase To Aid Purchase Of Thermo Fisher Campus

By Staff Reports, posted Apr 19, 2023
A city of Wilmington illustration shows the assets the city would acquire if it purchases the former PPD headquarters campus. (File)
As part of upcoming budget discussions, the Wilmington City Council will likely spend some time on how exactly the city could finance the purchase of the former PPD-now Thermo Fisher Scientific Inc. campus in northern downtown.

The transaction could require a 1.5-cent property tax increase, officials said, but council members indicated that this part of the deal is expected to be under scrutiny during the city's budget deliberations.

The council Tuesday unanimously approved an amendment to an installment financing contract in an amount not to exceed $70 million for the potential purchase, which would include a 12-story building with 370,000 square feet of office space, 12.5 acres and 1,500 parking spaces in a deck and on the ground. The city would consolidate city offices, now scattered across multiple downtown buildings, in a portion of the building and offset the cost of the campus by selling the vacated city properties and leasing a portion of the space to other tenants.

Thermo Fisher Scientific Inc., the current property owner, would lease back some of the space. With private leases and sale proceeds from city buildings, the city could pay down the debt by $20 million, although that is a guess based on the information the city has at this point, City Manager Tony Caudle said Tuesday night.

In presenting the financing resolution and public hearing at the meeting, city finance director Jennifer Maready said the 1.5-cent increase equals $15 per $100,000 of property value. She used the example of a $269,300 home, the residential median assessed value according to tax records. The increase in the property tax rate from the current amount of 39.5 cents to 41 cents would change the yearly tax bill by $40, from $1,064 to $1,104.

Councilmen Kevin Spears and Luke Waddell each brought up the need for further discussion. Addressing their concerns, Caudle said the proposed budget for the next fiscal year is expected to be delivered to council members in the next two weeks.

"If during council's deliberation on the budget, they would like to revisit the issue of trying to take the 1.5 cents out of the existing budget, we certainly could give you options with regard to which services would be altered," Caudle said.

In addition to more discussion and/or approval of the tax increase, the financing would need to be approved by the Local Government Commission, which is expected to consider the matter May 2.

Caudle reminded the council that the due diligence period ends June 11 and that if the purchase proceeds, a closing would likely take place in mid-July.
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