WILMINGTON — A City of Wilmington-owned building, previously leased for $1 per year, has been let for $2 per square foot per year, a contract that Wilmington Mayor Randy Riley says he mistakenly never presented to council.
Wilmington Law Director Brian Shidaker said council will be asked to ratify the lease at its Thursday, Nov. 19 meeting, but said mayors have the authority to negotiate them. Council’s approval is required for the contract to be enforceable in court, according to Shidaker.
Council member Randi Milburn, who sits on the assets, acquisition and use committee, said she wasn’t aware it was signed by the mayor, only that it was being discussed.
Milburn said she was surprised it was signed without going to council or a council committee. She also said she knew it was a transition period, but “that communication line needs to be open at all times.”
“I’m a little shocked,” Milburn said. “Sounds like we need to have a conversation about it pretty soon.”
“She’s absolutely right; it was a mistake,” said Riley, who added that he should have involved council earlier.
The Textron building, which is owned by the city’s wastewater department and sits across from the wastewater treatment plant on S. Nelson Avenue, is being used by Runway Logistics, a Sewell Motor Express company. The contract says the lease will be valid for three years with an option to extend for three more years, according to the contract.
The contract was signed in late October and effective as of the first of that month. It lets the building for $2 per square foot per year. In the lease, Runway Logistics says it will use 55,000 square feet of the building.
Riley said Sewell can use and pay for more than that, if it needs to expand, and the contract says an additional 43,000 square feet is available.
The money, about $110,000 per year, without expansion, will not go into the general fund because the city’s wastewater department owns the building.
Riley said those funds will help avoid increases in wastewater rates and can help raise capital for a couple of projects that may come about as a result of potential Environmental Protection Agency mandates.
The previous tenant of the building was Total Baking Solutions, which rented the building from 2011 to 2014 for $1 per year with the option to buy the building for $1 million when the lease expired. That option was never used, and TBS left the building ahead of its lease.
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.