Just over a year ago, the city of Wilmington completed its purchase of a downtown campus that once belonged to a pharmaceutical firm.

Since then, more than 300 city employees have moved into the former PPD-headquarters-turned-Thermo-Fisher-building even as officials work to upfit the new space and sell and lease the city offices left vacant by the relocation.

Shortly after the sale closed last July, the city’s Economic Development Division was the first department to move into the new campus.

“We really did our best to hit the ground running from that very first month of July, and things progressed methodically from there,” Aubrey Parsley, the city’s economic development director, recently told the Wilmington City Council.

September saw move-ins from the offices of the city manager, city attorney, city clerk and city council, along with a slew of other departments in the following months. Today, at least 17 departments have moved into the building, which city leaders renamed the Skyline Center last fall.

So far, approximately 200,000 square feet – an area roughly double the size of Wilmington’s convention center – has been activated for city and public use, Parsley said. Wilmington Mayor Bill Saffo recently told the Business Journal that consolidating the city’s operations into a single building has helped make things more efficient.

“I can be (in my office) meeting with a couple of people talking about affordable housing like I did last week, and I needed to speak to somebody in the affordable housing department,” Saffo said in July. “I can just bring them right up, I don’t have to get them on the telephone, and we can sit right here and go over it.”

Saffo said the building also offers a “tremendous amount” of meeting space that wasn’t available in the city’s former offices. Moving in also allowed the city to “repurpose the building, which was kind of sitting here but with nobody in it,” he said.

The city of Wilmington purchased the building, a 1,022-space parking deck and two undeveloped adjacent tracts for $68 million last summer. The building opened in 2007 as the headquarters of PPD, a Wilmington-based pharmaceutical firm acquired by Thermo Fisher Scientific in 2021. Just four months after the acquisition, Thermo Fisher said it would explore selling the 12-story building and surrounding campus. City officials submitted their initial purchase offer on the building in early 2023.

Now that most staff have moved in, officials are planning building upgrades to accommodate current and future operations better.

“The fact of the matter is, there are just some functions we cannot shoehorn into the building,” Parsley said, “and council chambers is one of them.”

Initial plans would combine several smaller rooms to create one large meeting room for the city council and other boards and committees. Other upgrades include establishing a customer service center area for the public, enhancing building security and providing new office space for several departments.

Parsley and deputy city manager Chad McEwen recently outlined the building plans during a presentation to the Wilmington City Council.

The bulk of the improvements will take place on the building’s ground floor, where officials want to build the council chambers and customer service center, McEwen said. The proposed chambers would hold more than 200 people and would be connected to a private conference room and overflow rooms for meeting attendees.

On the second floor, areas housing the city’s IT department and archives would see security and safety upgrades. Space on the third floor would be divided to create distinct areas for the various departments, including the city clerk’s office, fire marshal, Wilmington Police Department, emergency management and, eventually, traffic services, which is expected to have an office in the building starting in 2028.

The third floor also includes a substantial amount of space that won’t be used at first, McEwen said, but could help accommodate future growth.

“Those are areas that we have no purpose for right now,” he told the city council, “but we’re designating for and will demise for future city growth in the event that we need them.”

Other building-wide upgrades include installing access-controlled elevator doorways, completing an analysis of the building’s two generators and bringing the building into full Americans with Disabilities Act compliance.

The city has hired architecture firm LS3P and contractor Monteith Construction to design and create construction drawings for the renovation. As of early August, the improvements were projected to cost the city about $6.3 million, McEwen said. That price tag is expected to change in the coming months as plans move closer to completion, he added.

After that, the project could take three months to bid and six to nine months to construct. According to McEwen, the city could move into the upfitted space sometime next summer or fall.

Meanwhile, city staff have worked to lease space in the building and sell off surplus properties, including several other downtown office buildings that are no longer in use.

Skyline Center currently has nine active leases, including a lease to Thermo Fisher. The leases bring in just over $2.4 million in annual revenues, or about two-thirds of the building’s annual operating cost, according to Parsley.

In all, city staff have given 35 tours of the building to prospective tenants, and over the past year, a series of Skyline Center leases have come before the Wilmington City Council for approval.

Building tenants include the Wilmington and Beaches Convention & Visitors Bureau, nonprofit group Leading Into New Communities Inc. (LINC), Local Government Federal Credit Union, TOVA Wealth and Protocase, a rapid manufacturing and prototyping firm based in Canada. Three Friends Coffee has also established a cafe on the building’s ground floor that serves city staff and the public.

“It is an economic development tool of substance for us,” Parsley said about the office space, “and certainly is something we hope to continue to build on into the future.”

But there’s still work to do, he added. Three of the building’s existing leases expire within the year, and 75,000 square feet remain vacant.

Negotiations are underway on four leases that would cover a combined 31,000 square feet and bring in $760,000 in revenue, according to Parsley. That could bring the city’s annual lease revenue to more than $3 million – roughly 80-85% of the building’s annual operating costs.

In and around downtown Wilmington, city staff are working to market and sell off surplus office buildings and other properties no longer in use. The Wilmington City Council declared nine downtown properties surplus last year ahead of the Skyline Center purchase, and last month, the council declared another 10 tracts – mainly properties on downtown’s northern end – as surplus. 
 
Sale proceeds from the surplus land will be used to pay down debt on the purchase of Skyline Center. According to Parsley, the city has already put more than $3 million from the sale of surplus property toward the Skyline debt.

City leaders approved contracts this summer with several on-call commercial brokers, which add “horsepower” to the city’s efforts, Parsley said. Still, work continues to make the sites more desirable for prospective buyers.

The city, for instance, has plans to demolish the aging office building at 305 Chestnut St., a move officials say will make the lot more desirable for future development. The city council also recently approved a 10-year office space lease for the U.S. General Services Administration in the city-owned building at 115 N. Third St. Officials said the long-term government lease could help make the building more desirable to prospective buyers.

Parsley identified the properties at 305 Chestnut St. and 115 N. Third St. as top sale priorities for the city, along with the two vacant tracts adjacent to Skyline Center that look ripe for future development.

“These parcels that are left to sell, they’re bigger, they’re more complex, they’re more valuable, and they just take more in the way of precursor activities to get them ready for market,” Parsley said. “Staff has been busy with various activities to get these properties ready for sale so that they resale at the highest value possible.”