NORTH CAROLINA
CRAVEN COUNTY MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (“MOU”) is made and entered into this 22nd day of February 2022 by and between the City of New Bern, a North Carolina municipal corporation, and NEW BERN HISTORIC, LLC (“NBH” a Delaware limited liability company, collectively referred to as a” Party” or collectively herein as the “Parties”.
WITNESSETH:
WHEREAS, the City is a body corporate and politic and a municipal corporation of the State of North Carolina;
WHEREAS, NBH, and its affiliates, are in the business of developing, owning, and managing mixed-use properties including boutique hotels, restaurants, retail establishments and residential housing throughout the United States; and
WHEREAS, after researching and considering development opportunities throughout the Southeast, NBH is exploring development opportunities within the downtown commercial area of the City of New Bern, North Carolina to include: (1) the acquisition and rehabilitation of property located at 301 Middle Street, commonly known as the Elk’s Temple Building into a 50-room +/- boutique hotel; and ( 2) the acquisition and development of the vacant parcels owned by the City located at the corner of Craven Street and South Front Street for the potential development of an upscale multi-family development including street level retail (collectively, the “Projects”), and
WHEREAS, NBH has requested assistance from the City in the form of economic development incentives set forth in a development agreement to offset a portion of the costs associated with the development of the Projects; and
WHEREAS, G.S. § 158-7.1 authorizes the City to make appropriations for economic development purposes, and to convey interests in real property in consideration for NBH’ s investment in improvements and job creation all subject to the procedural requirements set forth therein specifically including that the Board of Aldermen of the City determines that the appropriations increase the population, taxable property, employment, or business prospects of the city; and
WHEREAS, consistent with the requirements of G.S. § 158-7.1, the Parties hereto desire to work together expeditiously and in good faith, after the City’ s approval of this MOU, to develop
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an economic incentive agreement that will provide NBH with necessary economic incentives as well as benefit the City by increasing the population, the tax base, the employment opportunities for its citizens, and the business prospects for the City as a whole, recognizing that such economic incentive agreement may or may not include all of the Projects; and
WHEREAS, the City and NBH intend to work together to strengthen their partnership for the good of the greater New Bern community, and the City and the NBH view this cooperation as an integral part of the vision for the Projects and anticipates that the City and NBH will each benefit from the Projects; and
WHEREAS, the Parties desire to enter into this MOU as a basis for memorialized agreements, provided the terms of this MOU are acceptable to the Parties.
NOW, THEREFORE, the Parties hereto agree as follows:
1. Description of Potential Projects.
1.1 The Elk’s Temple Building. The Elk’s Temple Building is located at 301 Middle Street in the downtown commercial district of the City. The Elk’s Temple Building has been unoccupied and in state of disrepair for a period in excess of 15 years with a current tax value of $849,890. NBH has acquired the Elk’s Temple Building for use as a 50-room+/- boutique hotel and related amenities. Kessler’s expected rehabilitation budget, including a parking area located at 306 Hancock Street, is approximately $25,000,000. The hotel and associated facilities would employ approximately 70 employees at an average annual wage in excess of the median wage in the City. In connection with NBH’s rehabilitation activities on the Elk’s Temple Building, the City hereby agrees and acknowledges that the City shall cooperate with and shall assist NBH with obtaining certain economic development incentives, which may include property tax abatement, impact and permit fee abatement, grants for the rehabilitation of commercial historic structures, annual incentive payments or such other grants or incentives as may be authorized by G.S. § 158-7.1.
2. Vacant Lots Located at the Corner of Craven Street and South Front Street. The City owns the vacant lots located at the corner of Craven Street and South Front Street in the downtown commercial district of the City identified as 304 and 308 South Front Street (the Front Street Property”). The subject parcels have been underdeveloped for a period in excess of 20 years. The current tax value of the subject parcels is $567,630. NBH and City agree and acknowledge that the Parties shall cooperate and use good faith efforts to agree on the terms an
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conditions by which the City will convey the Front Street Property for the development of an upscale multi-family development comprised of street level retail to service the greater community. The proposed development and associated facilities would provide an increased tax value of the Front Street Property and allow for the employment of employees in excess of the median wage in the City. To allow for NBH’s proposed development activities on the Front Street Property, the City hereby agrees and acknowledges that the City shall convey the Front Street Property to NBH as authorized by and consistent with the procedures set forth in G.S. § 158.7.1(d) and (d)(2) subject to the terms and conditions as agreed upon by the Parties. In connection with NBH’s proposed development activities on the Front Street Property, the City hereby agrees and acknowledges that the City shall cooperate with and shall assist NBH with processing and obtaining economic development incentives, which may include grants, annual incentive payments, or other grants or incentives as may be authorized by G.S. § 158-7.1.
2. Objectives. With respect to the Projects identified in Sections 1. 1 and 1. 2, the Parties desire to cooperate to develop an economic incentive agreement consistent with the statutory and procedural requirements set forth in G.S. § 158-7.1, specifically including a properly noticed public hearing where the Board of Aldermen of the City shall determine the content and the terms of the economic development appropriations that are in the best interest of the City and comply with the statutory requirements of G.S. § 158-7.1.
3. Non-binding Nature of Memorandum of Understanding. The Parties recognize and agree that the purpose of this MOU is to set forth a process by which NBH may proceed with the development of the Projects, and the City may exercise its development powers granted by statute under N.C.G.S. 158-7.1, which authorizes the City to engage in economic development activities in order to increase the population, taxable property, agricultural industries, employment, industrial output, or business prospects of the City. Nothing in this MOU shall be binding on the Parties other than to (i) proceed with the further assessment of the Projects, and (ii) negotiate diligently, reasonably, and in good faith on a development agreement between the parties identifying the economic development incentives described herein generally consistent with the objectives set forth herein and in accordance with the statutory and procedural requirements set forth in G.S. § 158-7.1. The Parties acknowledge and agree that the Projects terms described in this MOU are a preliminary statement of intent of the Parties and are subject to all necessary City approval procedures and definitive documents setting forth the complete agreement and
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understanding of the Parties in form and content satisfactory to the City and NBH, which the parties agree to diligently prosecute for the parties’ review and acceptance. The Parties acknowledge that development of the Projects will necessarily involve terms and conditions that have not yet been agreed upon; that this MOU is in no way intended to be a complete or definitive statement of the terms and conditions of the proposed transactions; and that any binding agreements between the Parties will be subject to the future negotiation and execution of such necessary documents. Notwithstanding the above, upon acceptance and determination of the appropriate economic development appropriations as provided in Section 2, the Parties shall agree as to the timing and form of any applications necessary to provide for the award or grant of such appropriations.
4. General Provisions.
(a) The City and NBH will use reasonable efforts and act in good faith in the performance of their respective obligations under this MOU.
(b) No modifications, amendments or waiver of any provision of this MOU shall be effective unless the same shall be in writing and signed by all of the Parties hereto.
(c) The covenants and conditions contained in this MOU shall bind and inure to the benefit of the City and NBH and their respective successors and assigns.
(d) This MOU shall be governed by and construed under the laws of the State of North Carolina.
(e) The City and NBH will each be responsible for their own expenses incurred in connection with the performance of any obligations required by this MOU.
(f) Each Party represents to the other that it has all necessary authority to enter into, execute, deliver and perform its obligations under this MOU.
(g) This MOU may be signed in counterparts; each counterpart shall be considered an original.
5. Exclusivity. In connection with NBH’s development of the Projects, the City shall not solicit, accept or negotiate any proposal from any other Party to acquire, lease or license the South Front Property.
{SIGNATURES ON FOLLOWING PAGE}
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IN TESTIMONY WHEREOF, the City has caused this instrument to be executed in its corporate name by its Mayor and its seal to be hereunto affixed and attested by its City Clerk; and NBH has caused this instrument to be properly executed, all on the date first above written.
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