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Wilmington B iz 2 0 2 0 c o m m e r c i a l r e a l e s tat e i s s u e

M A G A Z I N E

REDEFINING

RETAIL WHAT’S IN STORE FOR WILMINGTON AS THE RETAIL INDUSTRY CONTINUES TO EVOLVE?

LELAND LOOKS TO REINVENT ITSELF KEN DULL, FROM THE GROUND UP

Published by

Greater WWilmington G Published by

reater ilmington BUSINESS BUSINESS JOURNAL JOURNAL

SPRING 2020


B r a d l e y C r e e k S tat i o n OPENING SPRING 2020 80,000SF Class A Retail/Office Condominiums Located on Oleander Drive | For Sale or Lease NOW WELCOMING TO BRADLEY CREEK STATION First Carolina Bank

Crabby Chic

Head to Toe Day Spa

Angel Oak Home Loans

Wilmington Reproductive Laboratories

Big Sky Design Big Sky Shop + Studio

FOR MORE INFORMATION PLEASE CONTACT: ST EV E H A L L, Agent/Broker, Maus Warwick Matthews & Co. 910.279.3227 | stevehall@mwmrealestate.com STEVE ANDERSON Developer, SAMM Properties 910.616.0483 steve@sammproperties.com

PA R K E R A N D E R S O N Developer, SAMM Properties 910.200.6614 parker@sammproperties.comm


It Doesn’t Have To Be Hard

As a general contractor specializing in multi-family residential communities and public/private commercial housing properties, Harold K. Jordan & Company simplifies the building process. With 30 years of experience and hundreds of successfully completed construction projects in North Carolina, South Carolina and Virginia, we make it easy to work with us. Wilmington, NC

910.256.4388

Apex, NC

919.303.3652 hkjconstruction.com

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LETTER FROM THE EDITOR SOUND OFF BEHIND THE NUMBERS THE DIGEST C-SUITE CONVO THE TAKEAWAY

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DEVELOPING LELAND COVER STORY: RETAIL REVIVAL IN PROFILE: JENNY MIZELLE REAL ESTATE TRENDS IN PROFILE: KEN DULL MARKET SNAPSHOT RESTAURANT ROUNDUP: PINE VALLEY MARKET

ON THE COVER

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In the archives at The Oleander Co., a painting provides a 1950s vision of Hanover Center, called Hanover Shopping Center in the art. The Oleander Co. developed Hanover Center, the first suburban shopping center in Wilmington, and it opened in 1956.

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LETTER FROM THE EDITOR

REDUCE,

REUSE, R E C Y C L E

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f you’re of a certain age, watching the third season of Stranger Things brought back all your mall memories. To create the fictional mall set from the mid-1980s, when the series takes place, the production team built storefronts ranging from Orange Julius to Sam Goody – remember those? Yes, kids, you used to have to get in a car and drive somewhere to buy music. Workers built the ubiquitous mall in an actual, still-open one in the Atlanta suburbs. Today, however, Gwinnett Place Mall is an example of what’s happened to many of those Reagan-era shopping and hang-out destinations: a nearly empty shell with rows of vacant stores and anemic foot traffic. There are books, shows and websites dedicated to documenting closed malls featuring apocalyptic-like images of once-bustling food courts and escalators. But what determines whether these developments descend into dead mall status or not? Wilmington has seen the same shifts in shopping habits and retailer closures as the rest of the country. But Independence Mall, opened in 1979, has a reprieve for now with its redevelopment plan by Brookfield Properties, which bought the center about two years ago. Construction is underway in the area that once housed Sears – the struggling retailer closed the Independence Mall store in 2018. Plans are to incorporate lifestyle center elements such as exteriorfacing stores and a grocery store. Assuming the redevelopment takes place as planned, it won’t look like the mall of our youth, but it also won’t be 1 million square feet of dead space on one of Wilmington’s busiest corridors. (For more insight on these commercial retail space trends, turn to “Talking Shop” on page 22.) Reuse also is being discussed across town where

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a one-time shopping center on South College Road could be on its third life. Market Place Mall was built in 1989. Its shelf life was extended when New Hanover County’s government bought and renovated it for its offices in 2002, reflecting a national trend around then of adaptive reuse for aging retail spaces that turned them into DMV offices, schools and more. Now, citing the building’s expensive maintenance and inefficient layout, county officials are working with an outside team to turn the 15 acres into a mixed-use development that includes government offices and private commercial and residential space. Wilmington still has its share of vacant buildings as markers of the retail industry’s struggles – think Toys “R” Us on Oleander Drive and Kmart on South College. But like any industry undergoing disruption, the key will be transforming and figuring out the next evolution. Even Orange Julius found a way to hang on; it’s now a fruit smoothie.

VICKY JANOWSKI, EDITOR vjanowski@wilmingtonbiz.com

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Wilmington B iz

CONTRIBUTORS

M A G A Z I N E

2 0 2 0 R E A L E S TAT E I S S U E – $ 4 . 9 5

E R I N C O S T A ERIN COSTA is a Wilmington-based photographer whose work has been featured in publications including WILMA, the Greater Wilmington Business Journal, Rangefinder Magazine and more. A self-proclaimed travel junkie, she specializes in travel, portraits, intimate weddings and editorial work. In this issue, she photographed Pine Valley Market chef/owner Christi Ferretti on PAGE 40.

Publisher Rob Kaiser

rkaiser@wilmingtonbiz.com

President

Robert Preville

rpreville@wilmingtonbiz.com

A s s o c i at e P u b l i s h e r Judy Budd

jbudd@wilmingtonbiz.com

Editor

Vicky Janowski

vjanowski@wilmingtonbiz.com

A s s i s ta n t E d i t o r Cece Nunn

cnunn@wilmingtonbiz.com

Reporters

K E V I N KLEITCHES KEVIN KLEITCHES is a portrait and commercial photographer and personal branding consultant based in Wilmington. His work can be seen at kevintitusphoto.com. Kleitches photographed several of those representing Leland’s growth for “Welcome to Boom Town” (PAGE 19).

Johanna Cano

jcano@wilmingtonbiz.com

Christina Haley O'Neal

chaley@wilmingtonbiz.com

VP of Sales/Business Development Melissa Pressley

mpressley@wilmingtonbiz.com

Senior Account Executive Craig Snow

csnow@wilmingtonbiz.com

Account Executives Meghan Adams

madams@wilmingtonbiz.com

Ali Buckley

JESSICA MAURER JESSICA MAURER is a chef and writer with degrees from Hartwick College and The Cambridge School of Culinary Arts. Her column, Restaurant Roundup, appears each week in the Greater Wilmington Business Journal and she is a regular contributor to WILMA and Wilmington Magazine. Maurer talks with Christi Ferretti, of Pine Valley Market, about her career and ties to the area in “Community Chef” on PAGE 40.

abuckley@wilmingtonbiz.com

Brittney Keen

bkeen@wilmingtonbiz.com

Business Manager Nancy Proper

nproper@wilmingtonbiz.com

Events Director Maggi Apel

mapel@wilmingtonbiz.com

E v e n t s / D i g i ta l A s s i s ta n t Elizabeth Stelzenmuller estelz@wilmingtonbiz.com

D e s i g n & M e d i a C o o r d i nat o r Molly Jacques

production@wilmingtonbiz.com

C o n t e n t M a r k e t i n g C o o r d i nat o r Morgan Mattox

C E C E N U N N CECE NUNN has been writing and editing for more than 20 years, currently working as the assistant editor and real estate reporter for the Greater Wilmington Business Journal. She lives in Wilmington with her husband and two daughters. In addition to editing on this issue, she also details changes to the retail landscape in “Talking Shop” (PAGE 22).

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mmattox@wilmingtonbiz.com

Contributing Designer Suzi Drake

art@wilmingtonbiz.com

C o n t r i b u t i n g P h o t o g r ap h e r s

Erin Costa, Melissa Hebert, Kevin Kleitches, Michael Cline Spencer

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BizBites SOUND OFF |

BEHIND THE NUMBERS

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THE DIGEST

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C-SUITE CONVO

ENTREPRENEURIAL SPIRITS

End of Days Distillery is housed in a WWII-era Quonset hut where copperbellied stills concoct rum, vodka, gin and whiskey. Shane and Beth Faulkner opened the 4,800-square-foot distillery in February. The new Castle Street establishment houses a full cocktail bar, lounge, tasting room and event space. “We’ve been able to restore the building and make it a functional, as well as an artful, space,” said Oliver Earney, End of Days’ special events coordinator and lounge manager. photo by MICHAEL CLINE SPENCER

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SAVE LAND NOW FOR PARK EDITOR’S NOTE: Hansen Matthews is a partner in Wilmington-based commercial real estate firm Maus, Warwick, Matthews & Co. He discloses that his firm represents owners of land in an area he mentions as being suitable for park space.

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MAGINE FOR A MOMENT THAT TIME TRAVEL IS POSSIBLE AND THAT YOU SUDDENLY TRAVEL TO THE YEAR 2120. YOU’RE STILL IN WILMINGTON, BUT YOU’RE TALKING WITH YOUR GREAT-GREATGRANDCHILDREN. You ask about their lives and what Wilmington is like as a place to live. They answer that it’s all right living here with one major exception – there is no major park area that is open to the public. They say to you: “The entire county has been completely built out for the past 25 years because no one had the foresight, and no one took the initiative to save a large block of land for public recreation and enjoyment. It’s too late to do anything about it now though. Wish you’d thought about us when you had the chance in 2020!” Ouch – that last line hurts. Great cities have great parks. What would Chicago be without Lincoln Park? How about San Francisco without Golden Gate Park? Imagine how the quality of life for residents would suffer if Manhattan didn’t have Central Park. Do you know that NYC also has four parks that are even larg-

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HANSEN MATTHEWS er than the 800-acre Central Park? Closer to home, Raleigh benefits from 5,600-acre Umstead State Park. Mecklenburg County has 210 parks totaling over 21,000 acres. What’s our answer to those statistics? When it comes to the city and county, it’s Hugh MacRae Park, Greenfield Lake, Battle Park (which has lagged in creation) plus a couple of other smaller parks and our beaches. We must do better than this for our children’s future. As recently as the 1980s, there were hundreds of acres of undeveloped land in the southern part of the county, but no longer. Before we take the easy way out and blame developers, let’s look in the mirror. We collectively created demand for these new homes, apartments, stores, offices and restaurants, so developers have naturally responded by constructing them. It’s like drivers who complain about being stuck in a traffic jam. Look in that mirror again, because we are the traffic. New Hanover County will grow by more than 100,000 people over the next half century, and our parks are already straining underneath the weight of our existing population. Development during this time will not be like it was for the past 50 years. High land costs and scarcity will dictate changes and moving away from endless subdivisions full of half-acre

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lots. Smaller single-family lots, more multifamily development, increased building heights and mixed-use development must all come into play to provide efficiencies in supporting a much larger population. To solve the challenge that high-density population brings, we must collectively buy land through our county government to create a huge outdoor park. A GoFundMe page isn’t going to work this time. Countless metropolitan areas larger than ours have proven that you don’t have to sacrifice quality of life when growth occurs. We must plan for growth and then act on those plans. The time is now for our county to acquire a tract of land of 1,000 acres or more to be used and enjoyed by future generations. The cost of acquiring this land may not be very different than the amount that the city is currently investing to buy and develop the downtown 7-acre North Waterfront Park. An ideal target area for locating a mega-park is the currently undeveloped area located south of Castle Hayne, east of I-40 and north of the Northern Outer Loop. Fortunately, most of this land is owned by a few local families in separate tracts, which will ease the land assemblage effort. Finding a contiguous area this large will likely involve more than one seller. Some of this land is currently for sale while some of it is not, but it might be if the owners are approached by the county. These families all have deep roots in this community, and they have demonstrated civic mindedness throughout the years.


BizBites Waiting another decade to act could ruin the chance for acquiring any large tracts. Once sewer has been extended east of I-40, then it will bring the means to add thousands of new buildings and people to this area. The timeline for sewer extension is much closer than you think. Along with sewer comes higher land prices. Higher prices will mean more public resistance to pay for it. Public resistance now means that future generations will never get to enjoy a mega-park, and they’ll have to settle with eternal mediocrity for outdoor play areas. Wilmington has sometimes settled for being shortsighted and for thinking small. Other times we have risen to the occasion of taking the long-term view of what will make a great city, and we’ve reached for the stars. Whether or not we begin to immediately develop this park does not matter. Once we own the “large canvas,” then it can be “painted” gradually over the coming decades. The important objective now is to secure the land while it’s both available and affordable. Let’s join as a community now and dare to leave a great place to live for every future generation! Those great-great-grandchildren will thank you.

CROWDSOURCING REACTIONS, OPINIONS AND QUOTABLES FROM OUR ONLINE SOUNDING BOARDS

O N FA C E B O O K . C O M / W I L M I N GT O N B I Z

WHAT LOCAL BUSINESS ISSUES ARE MOST IMPORTANT TO YOU WHEN IT COMES TO VOTING IN THE NEW HANOVER COUNTY COMMISSIONERS RACE? “ENVIRONMENTAL ISSUES – sustainable ways to deal with new construction and stormwater runoff, workforce development, schools.” – BEATRICE BEARDSWORTH

“ENVIRONMENT, INFRASTRUCTURE and community livability – and the obvious intersection of those.” – TRAVIS LOOP “ENVIRONMENTAL ISSUES, NHRMC’s future, responsible development.” – KAREN CRAWFORD

T W I T T E R P O L L : @ W I L M I N GT O N B I Z AS THE RETAIL LANDSCAPE CHANGES, WHAT STORES DO YOU MISS THAT ARE NO LONGER IN SOUTHEASTERN NORTH CAROLINA?

“SEARS. Earth Fare.” – RICH SMITH

“RARE CARGO (downtown where Hot Pink Cake Stand used to be).” – SHEA CARVER “J.CREW” – COURTNEY SAUTER

“TOYS ‘R’ Us” – KRISTOPHER GERNER

“THE CONTAINER Store!” – ASHLEIGH RICH

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READER REACTIONS

EARTH FARE CLOSING ALL ITS STORES, INCLUDING IN WILMINGTON “THEY SHOULD put in a Sprouts Farmers Market!” – GARY ELLIS “WEGMANS please!” – ANDREA HILL

“NO MORE grocery stores!!!!” – JEFF PITTMAN

SOUND BITES 2020

SPARK

S PA R K IDEAS

EDITOR'S NOTE: The Greater Wilmington Business Journal and WilmingtonBiz Magazine publish a regular series of op-eds about ideas for sparking economic growth in the region. If you have a column topic to be considered, email editor@wilmingtonbiz.com.

“WHAT WE DO IS SO PERMANENT. A building is going to be around for years to come. You can’t take that responsibility lightly.” – LAURA MILLER, WILMINGTON OFFICE LEADER FOR LS3P, ON THE ARCHITECTURE FIRM’S APPROACH TO SELECTING PROJECTS. “MY LONG-TERM GOAL for us as a company is to also become active in the Wilmington area on other types of developments, not just industrial … I think we’re also very interested in seeing the communities we live in develop in a quality way that enhances the lifestyle of all the residents.” – EDGEWATER VENTURES CO-FOUNDER CHRIS NORVELL ON THE RALEIGH-BASED COMMERCIAL REAL ESTATE INVESTMENT FIRM ADDING TO ITS WILMINGTON PORTFOLIO. SIGN UP FOR DAILY NEWS UPDATES AND SUBSCRIBE TO THE GREATER WILMINGTON BUSINESS JOURNAL AT WILMINGTONBIZ.COM

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ALL REAL ESTATE IS LOCAL

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OME PRICES ARE RISING AND HAVE SURPASSED THEIR PREVIOUS PEAK FROM THE END OF 2018. BUT WE NEED TO BE COGNIZANT OF THE FACT THAT TIME IS PASSING, AND A DOLLAR TODAY ISN’T WORTH WHAT A DOLLAR WAS 12 YEARS AGO. If we account for inflation (deflate home prices by the consumer price index) prices are still 23% higher than they were in the early 2000s before the unsustainable runup in home prices leading to the Great Recession. And while the causes of the housing bubble are many, debatable and often politicized, there seems to be widespread consensus that being vigilant and avoiding a rerun is preferable to a replay of 2008. So, is there a bubble forming in the local market or is something else going on? The answer isn’t clear, but let’s explore a few of the potential arguments both ways. First, before we dive into local conditions, it is important for us to note that while national real estate trends often make headlines, local markets can differ dramatically. For example, compared to January of 2000, according to the Case-Shiller Index, home prices in Los Angeles are up 187%; San Diego and San Francisco are both up 160%! By comparison, Charlotte is up 67%, while Cleveland and Detroit are up only 27%.

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A D A M J O N E S The consumer price index has risen nearly twice as fast as home prices in Cleveland and Detroit, while home prices in California appear to be rising at more than three times the rate of inflation. Home prices in the Wilmington metro area of New Hanover and Pender counties have risen 90%, according to the Federal Housing Finance Agency, since 2000, slightly less than double the rate of inflation. Home prices in our region are rising faster than in Charlotte but much slower than the hottest markets in the U.S. Turning back to our original question, are the increasing prices in our region sustainable? Tough to say, but there are a few trends and relationships worth considering when making your own judgment. First, home prices tend to rise with income. At its peak in January 2006, the ratio of home prices to income was 45% higher than in January of 2000. A home that typically would have cost $200,000 cost nearly $300,000. Following the economic downturn, the ratio returned to more normal levels for the Wilmington MSA and was rising ever so slightly until the disruption of Hurricane Florence caused the ratio to jump 10%, likely owing to a tighter market for livable properties. Today the relationship is 15% M A G A Z I N E

higher than it was in 2000. On top of Florence tightening the market, the continuation of low interest rates has effectively multiplied incomes’ purchasing power and is likely providing some lift to home prices as well. Eventually one would expect the normalization of interest rates to remove some of their support. Looking forward, there are at least two major factors to consider when contemplating the sustainability of home prices: income growth and demographics. The first is easy to understand. Higher paying jobs support home values. Entry-level jobs in the service sector are not the same as opportunities at Quality Chemical, GE, research organizations or in the fintech space. Long term, as (or if ) Wilmington grows into the urban hub of Southeastern North Carolina and creates more professional jobs, increased incomes will put upward pressure on home prices. Demographics is a more difficult proposition. Retirees moving into Brunswick County and the graying of the population, in general, may well correspond to a change in budgetary preferences. Academic research suggests that an aging population may slow home price growth as much as a half to 1% per year at a national level. So where do home prices go? The policies and emphasis that we, as a community choose, will ultimately determine the direction of our demographics, employment and, in the long run, home prices. Adam Jones is a regional economist with UNCW’s Swain Center and an associate professor of economics in UNCW’s Cameron School of Business.


Providing students with the business education they need to succeed. Online MBA and Online Executive MBA Professional MBA International MBA M.S. Accountancy Online M.S. Finance and Investment Management Online M.S. Business Analytics M.S. Computer Science and Information Systems Business Foundations Certificate

csb.uncw.edu/grad

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An EEO/AA institution.

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NUMBERS $M 545 ILLION

AMOUNT OF INVESTMENT PROMISED TO

CANAPI VENTURES

VENTURE CAPITAL FIRM GETS MAJOR BOOST BY JENNY CALLISON

A VENTURE CAPITAL FIRM CO-FOUNDED two years ago by Live Oak Bancshares Chairman and CEO James “Chip” Mahan announced in February it had received major investor commitments. Canapi Ventures, which invests in early- to growth-stage financial technology companies, was promised $545 million from a “robust” institutional investor base, according to a news release.

The American Bankers Association, the Independent Community Bankers of America and several state banking associations are also Canapi investors, the release stated.

Savvy early-stage company founders seek more than capital, Ludwig continued, stressing the importance of an investor’s “deep domain expertise and an ability to help fintech companies tangibly grow revenue and customers. We believe our model is unique in that it aligns the interests of both banks that want to use innovative technologies as well as the companies creating those technologies and represents a true winwin for all parties involved.”

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$15M $10M $5M

$33.8M

$15.9M

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H EIGH T T H AT D UKE EN E R G Y RAIS ED T RANS MIS S ION LI NE S OVER T H E C A P E F E A R R I V E R F OR BIGGER S H IPS CO M I NG T O T H E PORT OF WILMING T O N

WILMINGTON

“Banks are looking for technology partners that can help them thrive and innovate in a rapidly changing and hyper-competitive market,” Ludwig said. “We believe many of these solutions have to come from early-stage companies, and that is why we launched Canapi Ventures.”

$35M $30M $25M $20M

COMMERCIAL CONSTRUCTION COSTS

“Much of the financial services industry is running on software created decades ago, and we are at an inflection point where that has to change,” Mahan said. “Canapi is here to connect banks to the innovators who aim to make that change happen and truly revolutionize the fundamentals of our industry.” Canapi Ventures, located in Wilmington on the Live Oak campus, is jointly managed by Mahan and Gene Ludwig, the founder and CEO of Promontory Financial Group, now an IBM company. Promontory Financial is a regulatory and compliance consulting firm for financial services and fintech companies.

# OF ILM PASSENGERS IN 2019

2018 VS 20 19

WILMINGTON

The investor base is a group known as the Canapi Alliance, the release stated. The Alliance is made of more than 35 banks and strategic investors “seeking attractive investments and greater partnership with the fintech ecosystem.” It includes 11 of the top 50 and 23 of the top 100 banks in the United States by total asset size, according to the release.

1,075,963 THE FIRST TIME THE AIRPORT CROSSED THE MILLION MARK

BRUNSWICK CO.

BEHIND THE

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BizBites

6.3% NHRMC

OPERATING MARGIN IN 2019

Sources: Wilmington International Airport, Brunswick County Code Administration, N.C. Ports, NHRMC


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DIGEST THE

A R O U N DU P O F R E C E N T CO MME R C IA L R E A L E STAT E NE WS

CHEW ON THIS

HOTEL DEVELOPERS CHECK PORT CITY FOR CHECKING IN Hotel plans continued in 2019 in hot spots around the Wilmington area, with plans and hopes for more to fill an increase in demand in recent years. One example is a Home2 Suites by Hilton underway in the 5500 block of Market Street. Developed by The Generation Companies based in Raleigh, the 125-room hotel is projected to open in the fourth quarter of this year, said Jeff Castleberry, the firm’s senior vice president of real estate. It’s the third Home2 Suites by Hilton, an extended stay hotel, for The Generation Companies. The firm opened one in North Charleston in 2012, selling that one to a large real estate investment trust (REIT) the day it opened. The Generation Companies was familiar with Wilmington because the firm had owned the Suburban Extended Stay Hotel on Eastwood Road and built the Homewood Suites

in 2010. The demand in the Wilmington area comes from several factors, Castleberry said. The area “continues to grow population-wise. You’ve got very great, diverse demand drivers down there: You’ve got business and corporate (travelers); you’ve got beach, vacation and destinations stuff; you’ve got the university and the airport,” Castleberry said. “All the surrounding communities are also continuing to grow.” Last year, a Georgia hospitality firm announced plans to build a Home2 Suites by Hilton at The Pointe at Barclay in midtown Wilmington. And the developers of the recently opened Holiday Inn Express & Suites Wilmington West-Medical Park (pictured above) at 839 Medical Center Drive are looking for more potential hotel sites.

– CECE NUNN

TO STAY IN THE LOOP ON THE LATEST REAL ESTATE HAPPENINGS, CHECK OUT THE WEEKLY REAL ESTATE UPDATE EMAIL. SIGN UP AT WILMINGTONBIZ.COM.

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The pet industry keeps growing its pawprint in Wilmington. A cage-free dog daycare and boarding franchise, Camp Run-A-Mutt, opened last year at 2541 Carolina Beach Road. Pawville, a Pender County-based business that offers pet boarding, grooming and other services, is building a 10,500-square-foot facility off Carolina Beach Road, marking its fifth location. The newest Pawville could be finished this year, and in addition to boarding, daycare, grooming and training, it will hold some new services. They include a boutique with pet items for sale that will be about 1,000 square feet, self-serve dog washing stations and a dog treat bakery.

$8.3 MILLION price paid for the CAPE FEAR INDUSTRIAL COMPLEX in Pender County

THE COMPLEX INCLUDES: -SQ.-FT. FACILITY

4 4 8 ,6 8 7 1 2 8 ,0 0 0 SQ. FT. of manufacturing space

ON A

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BizBites

C-SUITE C O N V O

HEAD OF THE HOUSE

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NNE GARDNER BECAME CEO OF WILMINGTONBASED CAPE FEAR REALTORS IN JULY,

WHAT OTHER TRENDS ARE YOU KEEPING AN EYE ON FOR POTENTIAL HOUSING MARKET IMPACTS?

head of an organization that includes more than 2,800 Realtors in Southeastern North Carolina and is on track to hit 3,000 by May. Gardner, who came to Wilmington after serving nine years as CEO of the Charlottesville Area Association of Realtors in Virginia, talks about the area’s current housing market and what might be on the horizon.

HOME SALES REALLY JUMPED UP IN JANUARY – 37% MORE THAN A YEAR EARLIER FOR THE THREE-COUNTY REGION AND THE STEEPEST INCREASE FOR THE MONTH OF JANUARY SINCE 2006. WHAT’S FUELING ALL THIS ACTIVITY?

“There are a few external factors contributing to the robust activity at the start of 2020, specifically low unemployment and declining mortgage rates. Combining 3.6% unemployment, which is a 0.5% drop from this time in 2018, and mortgage rates below 3.5%, there has been significant demand in housing across all segments and counties in our region. January’s performance shared markers typically found in March and April, however, with our area’s mild weather and a surge in end-of-year buyer traffic and pending sales, it resulted in a record month.” NATIONALLY, HOUSING INVENTORY HAS DROPPED, AND THAT SEEMS TO BE THE CASE LOCALLY. HOW MUCH OF A CONCERN IS THAT FOR THE AREA?

BY VICKY JANOWSKI

ANNE GARDNER CEO

CAPE FEAR REALTORS

“As the fastest-growing region in the state, housing demand extended beyond the tri-county area in earnest the past year, and buyers are absorbing available inventory in the surrounding areas. Inventory drops each month, and existing homes remain on the market an average of just 18 days in New Hanover County. With regard to new inventory creation by developers and builders, the national inventory shortage is driven by a shortage of ‘land, lumber or labor,’ or any combination of the three. Nationally, labor is the biggest issue, and while the local labor market remains tight, the scarcity of land is impacting both prices and home choice most acutely in the city of Wilmington and New Hanover County … The region’s anticipated population boom in the next two decades is expected to double our population. The challenges in meeting future demands are already upon us, and we are active in partnerships working to prepare the region for this growth.”

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“I have frequent conversations in the community where I am asked about the impact of retirees and other demographics on our housing market. Interestingly, it is less the influx of new retirees that will impact the housing supply for the region but instead the consumers who are choosing to age in place. The impact of this behavior is the housing stock, which would normally come onto the market as individuals are expected to downsize and leave their homes of 20 or more years are not coming into the existing home sales inventory … Another trend that will impact our communities is the delayed impact of millennials purchasing homes later than prior generations, due to flat wage growth and the impact of student loan debts. There is a concern that as purchasing power is impacted for this group, they remain renters longer than previous generations, or they will purchase with friends and family to combine resources … The most immediate impact to our region will be the rising costs of insurance and risk to property from natural disasters. While we are encouraged by recent changes to the National Flood Insurance Program’s (NFIP) risk assessment model, which determines risk factors on a parcel by parcel basis instead of zones, insufficient coverage and uneven claim payouts are putting a strain on the flood insurance market. The N.C. Rate Bureau (NCRB) has proposed a new private flood insurance plan for North Carolina that we are watching very closely.” R

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D Logan (from left) of Logan Developers Inc. and Gary Vidmar, the town of Leland's economic and community development director, see Harrington Village, a Logan project, as an ideal example of new development for Leland's Village Road area.

B BOOM welcome to

TOWN Brunswick County community of Leland copes with the joys and pains of growth

BY JENNY CALLISON PHOTOS BY KEVIN KLEITCHES

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y any measure, Leland is booming. As its residential population burgeons, business development follows. Rapid growth in the form of retail shops, hotels, restaurants, offices and medical practices is obvious even to the casual passerby. With the first of its tenants in place, the development called Leland Town Center is still under construction across U.S. 17 from Waterford Village, which is almost completely occupied. Further south on that highway are other commercial developments: Magnolia Greens, the Shoppes at Westgate and The Villages at Brunswick Forest. Other commercial outcroppings are in progress south of Brunswick Forest along U.S. 17 as part of new developments. This expanding commercial mix serves the town’s increasingly diverse population. “A lot of young families are beginning to move here,” said Gary Vidmar, Leland’s economic and community development director. “People think of the people moving to Leland as primarily retirees, but that’s not the case. The town’s median age is 42. School buses are coming through Waterford now, unlike two years ago. The population is balancing out.” He cited Leland’s age demographics: 27% of residents are between 25 and 44; 28% are under 25; only 2 0 2 0

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The patrons of Farmhouse Kitchen restaurant in Leland, owned by residents Josephine and Thomas Tilley (pictured at right), come from Leland and beyond.

22% are over 65. And new residents aren’t necessarily coming from the Northeast or Midwest. “A lot of folks are moving here from Wilmington, where they are still employed,” Vidmar said. “They find it easier to commute from Wilmington to Leland than through Wilmington.” Vidmar adds that when Brunswick Forest is fully built out, that community alone will boast as many residents – about 22,000 – as live in the whole of Leland today. One new business that is benefiting from all the growth is Farmhouse Kitchen restaurant, owned by Leland residents Thomas and Josephine Tilley. Thomas Tilley was getting burned out doing software sales, according to his wife, and the couple was ready to try something new. “We noticed the location available,” she said of a storefront in The Villages at Brunswick Forest, “and decided to try a breakfast and lunch restaurant.” They opened Farmhouse Kitchen in April. Almost one year in, “It’s been great,” Josephine Tilley said. “It was a little stressful at first, but we have a

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great staff whom we trust. Our chef is amazing. The community has been amazing.” Farmhouse Kitchen’s customers come from Leland and beyond: from Southport, from Wilmington and from people traveling along U.S. 17. More growth around them means more potential customers, Josephine Tilley said. At least two Wilmington restaurants have successfully established new locations across the bridge: Eternal Sunshine Café opened last summer on Village Road, and just this past November, Islands Fresh Mex Grill moved into a spot in Waterford Village. “My customers at the other locations (were) constantly telling me that Islands would be successful in Leland,” said Islands Fresh Mex Grill owner Lucas Jones. “When I looked further into opening in Leland, I couldn’t believe how perfect it was. The growth of the area is astronomical, and Islands would be the first fast-casual dining fresh Mexican restaurant to enter the market.” Jones said he has been surprised

M A G A Z I N E

that Islands’ customer flow has not slowed down since it opened. “We have remained consistently busy,” he said. “What I see around me is growth everywhere, which leads to so much opportunity for the people of Leland to have everything they need at their doorstep without having to venture into Wilmington.” Two breweries will soon open in Leland, according to Vidmar, who says they will bring a much-anticipated vibe. Medical practices have followed residents to Leland as well. In September, dermatologist Thomas Braza opened his practice in a high-visibility site near the Waterford community entrance. After practicing in Whiteville for two years, Braza was looking to


relocate to a higher growth area. Leland was attractive, he said, because it, as well as Brunswick County as a whole, is underserved in dermatology. Braza built a new facility, half of which his practice, Bluewater Dermatology, occupies, and half of which he hopes to rent to another medical provider. “Some of my old patients have followed me here, and I have some new patients,” he said. “Some come to me because they see the office while driving by. I get referrals from other patients. Brunswick Forest is growing. Compass Point is growing, and Waterford and Magnolia Greens are well established.” As the business community expands to keep pace with residential growth, the town is working to anticipate infrastructure and service needs. “It’s hard to stay ahead of the curve in terms of infrastructure,” Vidmar said. “Leland has had to increase staff. We’ve probably doubled staff in every department: police, fire, planning, building inspections, finance, public services and operations. That’s why we built the (new) government building, which we first occupied in 2016. Now we’re bursting at the seams.” It’s not just new commercial centers that are driving demand for town services. Leland has set out to enhance its older business corridor, Village Road, through a series of improvements. One of the first steps was to enact an ordinance that reduced the maximum height of signs along the road. Improved sight lines and aesthetics are apparent, Vidmar notes. More changes for that commercial strip are planned now that Leland has rezoned the Village Road area to a flex code, which, as the term implies, gives local officials and developers more leeway in the use of property. “We are trying to create a true downtown,” Vidmar explained. “The sign ordinance went a long way toward that. We’re looking at a plan to bury utility lines, which will improve the attractiveness of the area and attract new businesses. And we want to redevelop and repurpose older buildings.” The Village Road core area will

Dermatologist Thomas Braza relocated his practice from Whiteville to Leland in September because of Leland’s higher growth rate.

eventually offer a combination of commercial and residential properties, redeveloped to promote a walkable downtown, according to Vidmar. What the economic development official calls an “ideal example” of new development for the Village Road area is Harrington Village, Logan Developers Inc.’s 13-building mixed-use campus in the center of the flex code district. One of the Harrington Village buildings is built for commercial use; the remainder are apartments, said PJ Kelly, Logan Developers’ vice president. The complex was built in two phases: Phase one is 98% occupied, and phase two, just completed, is 40-50% leased. The commercial building is about a third leased. “We’re looking for some businesses that can bring convenience to local people,” Kelly said. “Maybe a small food store, small offices, businesses that offer everyday conveniences.” Kelly said Harrington Village has met with approval from the community since it was in the planning stages. “When the local population started to see plans, they were very enthusiastic, and I think that enthusiasm has led to our high occupancy rate,” he said. “I don’t see that slowing down. Before we undertake an apartment project we do months and months of study, looking both at economics and population. Our studies have shown there is still a huge need for apartments and mixeduse development (in both Leland and

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Wilmington).” Vidmar hopes other developers and local property owners will take their cue from Harrington Village and provide additional housing or businesses to the Village Road area. “There are a lot of small infill pieces of land that could hold a smaller housing development,” he said, explaining that Leland would like to see some of these parcels developed as affordable housing, which the town defines as units costing less than $200,000. Sometimes that means apartments and townhomes; sometimes it means neighborhoods of small homes on small lots. With more apartment complexes on the way elsewhere and developers of new neighborhoods requesting annexation so they will have access to public water and sewer, Leland’s population will continue its dynamic growth, say officials. And they want the population to swell because residents bring sales tax revenues. “The county collects the sales tax and divides up the money based on the population of the municipality,” Vidmar said. “Leland gets the biggest chunk of any municipality in Brunswick County: It’s about $24,000 per year per 100 residents. Dense developments like apartment houses bring in more revenue than do single-family homes. We get no sales tax revenue for commercial properties.”

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LANDLORDS AND DEVELOPERS ADAPT TO CHANGING TASTES IN THE WORLD OF RETAIL


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orkers toiled on a recent morning inside a new retail building at The Pointe at Barclay.

At the same time, customers at the midtown Wilmington complex filled the drive-thru at Starbucks. Others ate at tables inside a bagel cafe. The first movie would begin at The Pointe’s anchor tenant, a Stone Theatres cinema, after 11 a.m. But no one, at any time that day, would be buying shoes, clothes, books, computers or really anything other than food at the mainly dining, services and entertainment center. That’s because The Pointe at Barclay is an example of how retail is being redefined, with the traditional w i l m i n g t o n b i z m a g a z i n e . c o m

tenant mix at shopping centers in Wilmington and across the U.S. taking stock of what shoppers want in 2020 and planning accordingly. While some are declaring this year will see the continuation of a “retail apocalypse,” others say that’s an exaggeration, that the only chains that are suffering or dying are those that failed to adapt or buried themselves in debt. “For over a decade there has been intense debate about the future of retail, shopping centers and ultimately retail real estate,” according to a report titled, “Retail Real Estate Transformed,” by the International Council of Shopping Centers. The factors involved, the report states, include a shift toward convenience and accessibility, demand for experiential retail (one of the main buzzwords in 2 0 2 0

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A 1950s-era rendering by John Baer for Alexander S. Cochran Associates Architects of Baltimore shows Hanover Shopping Center in Wilmington.

Hanover Center, as it is known these days, in January at 3501 Oleander Drive in Wilmington.

CHANGES IN STORE FOR HANOVER CENTER AS NEW OWNERS PLAN FOR THE FUTURE

At Hanover Center in midtown Wilmington, updates top the shopping list for the property’s new owners. Within the next year to 18 months, patrons can expect work to be done on a new facade, along with a new entrance sign and improved parking lot, said Randy Kelley, principal of Harbour Retail Partners who is based in Wilmington. In December, Hanover Center changed hands in a $51 million deal through which Preferred Apartment Communities Inc. (NYSE: APTS) made an approximate 92.5% equity investment in a joint venture with Harbour Retail Partners. Anchored by a Harris Teeter grocery store, the Wilmington landmark at 3501 Oleander Drive measures more than 300,000 square feet and has been owned for more than 60 years by the MacRae family, developed by Hugh MacRae II and opened in 1956. In addition to improvements, the new owners plan to build 264 apartments, along with office and retail space, on 7 acres behind the center. And the changes aren’t likely to stop there.

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“We'd like to add another outparcel on the Independence Boulevard side,” Kelley said. “We've got a couple of tenants that we're talking to so we may end up building either a single tenant or a multitenant building on Independence.” New restaurants could be on the way. “We’re excited about complementing the existing restaurants with additional restaurants across different categories,” Kelley said, “less fast food-driven and more local chef-driven, fast-casual or even sit-down restaurants. Maybe even a craft brewery.” He said existing tenants at Hanover Center do very well. “I think it’s because of the location,” Kelley said. “The location is just irreplaceable real estate, and you’ve got proven traffic at this intersection (Independence Boulevard and Oleander Drive) and at this center.” Over time, if existing tenants leave, “we’ll be working really hard to try to bring more experiential retail to the center, which for us would include restaurants.”

M A G A Z I N E

retail real estate today), demographic changes, the integration of online shopping and a rise in the flexibility of omnichannel shopping (meaning a mix of online and in-store offerings). As a result, many landlords and developers have learned to adapt rather than closing centers or getting out of the development game. “Tenant diversification is good for the industry, as it is an example of adaptation to changes in consumer demand and demographics. In part because of these successful adaptations, the net number of centers continues to grow every year,” said ICSC spokeswoman Stephanie Cegielski. “We expect both tenant diversification and center growth to continue.” As brokers often point out, “There are hands-on services that you need that you can’t get online,” said Bryce Morrison, broker with Wilmington-based commercial real estate firm Cape Fear Commercial. Jason Swain, developer with Swain & Associates in Wilmington, said he doesn’t see retail as dying. “Certain parts of retail are struggling, but on the whole, I think retail is alive and well,” said Swain, whose company is planning CenterPoint, a $250 million mixeduse project – including retail – on Military Cutoff and Eastwood roads in Wilmington. “While there’s a lot of stuff you’ll buy online, there’s still a lot of reasons to go and shop at your local brick-and-mortar stores.”

TRANSFORMING THE CITY’S MALL

As stores, landlords and developers work to stay relevant, changes will also include continued redevelopment of older retail properties, including Independence Mall at 3500 Oleander Drive in Wilmington. The mall opened in 1979. At the end of February, a transformation was underway at the more than 800,000-square-foot center, where the vacated Sears wing was demolished and the side facing Oleander Drive was reshaped to make way for new stores with exterior entrances.


RENDERING C/O LS3P

“Independence Mall is a cornerstone in Wilmington, but to maintain this position, we must evolve,” said Helen Lewis, the mall’s general manager. “Our landlord, Brookfield Properties, has made a significant investment to ensure that Independence Mall offers our community a revitalized tenant mix including new restaurants and community gathering space.” Lewis acknowledged that the retail landscape, especially in the shopping center sector, changes at a rapid rate. “Today’s consumer wants convenience and everything under one roof, and this goes far beyond traditional retail. We’ve positioned the Independence Mall redevelopment to be a one-stop shopping destination that meets the changing needs of our community,” she said. “We are currently working to provide a plethora of experiences like entertainment, fitness and a variety of dining options. This will give shoppers a reason to stay longer and return frequently.” Some of the new tenants are

TOP: Drone footage shows construction crews working in February on the restructuring of Independence Mall, 3500 Oleander Drive in Wilmington. BOTTOM: A rendering reveals what Independence Mall is expected to look like with exteriorfacing entrances to many stores, including Dick's Sporting Goods, Five Below and Ulta.

businesses that aren’t already part of Wilmington’s retail scene, including Five Below, a Philadelphia-based value retailer geared toward teens. In a separate building on the mall’s campus, Walk-On’s Bistreaux & Bar is also expected to open, possibly this year. “With nearly 170,000 square feet

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of retail space under construction, our leasing activity remains very busy and exciting with anticipated openings as early as in the fourth quarter of 2020,” Lewis said. “Revitalizing our tenant mix to appeal to consumers of all ages is a top priority … In addition to a mix of retailers and restaurants, we 2 0 2 0

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are also actively pursuing fitness, entertainment and office uses that will invigorate and revitalize the center.” Around the mall, which sits on more than 40 acres along one of the busiest corridors in the city, there remains the possibility of a mix of uses outside of retail. “Within the current redevelopments of Brookfield Properties’ retail portfolio of over 170 assets, we continue to explore the viability of residential, office and other uses which are appropriate to the specific market,” said David Ortner, senior director of development at Brookfield Properties. “Wilmington is a dynamic and growing community, and the Independence Mall should reflect that as well.” The same could be said for other major centers in the city. Just before 8 a.m. on a weekday, a worker at H&M carried a mannequin around as she prepared to dress it in the clothing store’s first-floor window at Mayfaire Town Center. Not too long ago, a vacant patch of grass about 6 feet away from the Mayfaire H&M was supposed to hold more stores, possibly offering boating accessories or featuring window displays with more dressed-up mannequins. But more recently, the property has been marketed as a potential spot for office space. “We’re just offering it as an alternative to the retail for Mayfaire being that the office portion of Mayfaire has filled up,” said Steve Hall, partner in Wilmington-based commercial real estate firm Maus, Warwick, Matthews & Co. and the listing agent for the property. An office for Nest Realty recently opened in part of the center, in a longvacant building that was revamped. “Mayfaire has a wonderful mix of national, regional and local retailers. We strive to bring exciting concepts that resonate with today’s consumers, such as entertainment uses, new-tothe-market retailers and nonretail uses such as real estate offices,” said Paige Coniglio, Mayfaire’s specialty leasing manager and marketing director.

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PHOTO BY SUZI DRAKE

MIXING IT UP

Earth Fare closed all of its 50 specialty organic grocery stores this year, including the one in Wilmington. But the chain didn't succumb to disruptors, such as e-commerce. Instead, it fell to a failed refinancing attempt and other associated problems the business faced.

And while some traditional retail tenants have gone by the wayside at Mayfaire, including Eddie Bauer and J. Crew, they have been replaced or soon will be. Athleta, which is new to the Wilmington market, is expected to open in the former J. Crew space in mid-March, while Loft opened last year in what was Eddie Bauer’s storefront.

IT’S NOT ALL ABOUT SHOPPING

Swain said his niece, a freshman in high school, goes to Mayfaire with her friends “just like we used to go to the mall. They get together, and they go have coffee or go see a movie.” “There’s that experience of being together that Amazon or anybody online is not going to be able to capitalize on,” he said. But a project like CenterPoint, which is set to include shopping, dining, residential units, offices, a hotel and more, can capitalize on the need for real-life connections, Swain said. Part of that effort is through programming. Swain uses the example of North Hills, a mixed-use center in Raleigh created by developer John Kane. “Not only is it just a great location, like CenterPoint will be, but one of M A G A Z I N E

the attractions of North Hills is there’s always something going on,” Swain said. “He’s got a team that works around the clock to program these events.” Events are also part of the mix at Mayfaire. Coniglio pointed to Mayfaire’s 2.8-mile walking trail and its hosting of the Coastal NC Run/Walk for Autism, Girls Night Out events and holiday visits with Santa, features that “bring people together and keep customers engaged with the community and our brand.” “You will continue to see newer, more dynamic uses enter the market, each hosting an array of experiential components that will generate traffic and build loyalty,” Coniglio said. Drawing customers in a variety of ways is likely to remain a priority, as services continue to dominate the tenant lineup. According to the ICSC report, “With the growing importance of services, shopping centers have evolved into community hubs more than ever before. It harkens back to how the first marketplace fulfilled the basic needs of the consumer and played a vital role in everyday life.”


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PROFILE

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EYES BY LAURA MOORE

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enny Mizelle and her husband enjoyed spending weekends in Emerald Isle only to dread leaving the beach to return inland. They thought about relocating there but did not want to leave their jobs at the WithersRavenel headquarters in Cary. They combined the best of both worlds, the beach and business, by transferring to the Wilmington location of WithersRavenel, a civil and environmental engineering firm. Having worked in the marketing department in Cary, Mizelle transitioned into a new role as director of land development for the Wilmington office in 2017. “Almost all of my time has been in the private sector, and I knew a lot of people,” Mizelle said. “I was the director of economic development for the town of Holly Springs for 22 years, which was a fun organization, and I did a lot of networking and knew a lot of people. “So now my biggest challenge is not knowing a lot of people.” Sometimes Mizelle’s job takes her to small towns and counties beyond New Hanover County. She w i l m i n g t o n b i z m a g a z i n e . c o m

PROFILE

is currently consulting in Wayne and Montgomery counties. “We are working on the smartest and best use of property by doing our due diligence,” Mizelle said. “We work on conceptual master plans, zoning and vetting environmental features.” The Virginia Tech graduate earned her degree in urban planning, which “morphed” into mortgage banking, then community development and later economic development. “It is all about marketing your community,” Mizelle said. Mizelle’s main focus as a new member of this community is to market her company and to help establish more brand recognition for WithersRavenel. “I want to increase market share of our company in the Cape Fear region,” she said. “We are an excellent engineering company, and we are trying to differentiate ourselves with our excellent customer service.” Mizelle was witness to the exponential growth that occurred in Holly Springs as it grew from 900 people in 1990 to 9,000 people just 10 years later. She is particularly impressed with the fintech sector that has grown in the Wilmington area, especially having played a pivotal part in bringing big business to Holly Springs. In 2006, Mizelle was part of a team that sealed one of the top-10 largest economic developments deals in North America by bringing Novartis to Holly Springs. Mizelle and her team worked for two years to bring the vaccine manufacturing facility to the town. “I am still proud of the work our team did to recruit Novartis,” Mizelle said. Mizelle is excited to be a part of the changes that are currently underway in the Wilmington area. “What I see going to chamber and Business Journal events is that this area is gathering a lot of excitement and development activity, 2 0 2 0

and it is exciting,” Mizelle said. “It is a bigger market up in the Triangle, but it is so friendly, more laid back and casual down here. Everyone has been so open and welcoming.” One aspect that has not changed is Mizelle’s working relationship with her husband, Don, including their proximity. Not only do they live together and work together, but they share an office, as well. “He works on the technical aspects; I bring the relationships,” Mizelle said. Relationships are important to Mizelle and she looks forward to growing more relationships in the Cape Fear area. While living in the Triangle, Mizelle was active in the women’s leadership group, Triangle Commercial Real Estate Women, or TCREW, and is looking forward to getting more involved with the local Cape Fear CREW chapter. “I met the nicest people, formed great friendships and developed many professional leads. We were all there to support each other,” Mizelle said. “So the first thing I did was to find the Cape Fear CREW, and it is as good as I could it imagine it being.” WithersRavenel just celebrated 15 years in business, and Mizelle is proud to be a part of the employeeowned company that seems more like a family than a business. “We have a potluck lunch every month, and we just have fun together,” Mizelle said. Getting the hang of the roads in Wilmington was a bit of a challenge for her, but now Mizelle is ready to be a part of contributing to the greater good of the area. Mizelle has been working closely with the nonprofit Furniture Finders helping to distribute furniture to those in need. Having worked at the Holly Springs food cupboard, Mizelle hopes to do more with her passion for fighting food insecurity by working with Share the Table in Surf City. “I just want to become more involved in the community,” Mizelle said. R

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ommercial real estate activity in the region in 2019 included additional projects for some developers and the potential for new endeavors for others. Potential initiatives include at least one other publicprivate partnership like the downtown mixed-use project River Place, which the city of Wilmington is involved in with East West Partners of Chapel Hill. Experts aren’t sure when an official slowdown might occur, but many local brokers remained optimistic in the first quarter of 2020. BY CECE NUNN

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The potential redevelopment of the New Hanover County Government Center moved forward in January as county officials voted to proceed with a development team made up of Wilmington-based GHK Cape Fear Development and FD Stonewater, which was the county staff’s recommendation. The project could turn the government center, which includes 15 acres at 230 Government Center Drive off South College Road in Wilmington, into a mixed-use development that includes government offices and private commercial and residential space. Local officials have been bringing public-private partnerships (also referred to as P3s) to the table as potential solutions to public needs that could also help meet the market’s demands. P3s have advantages and disadvantages, but one of the benefits in the case of the county government center, according to County Manager Chris Coudriet, is the potential to end up with a better facility for fewer county dollars. If negotiations aren’t successful with the Cape Fear team, county officials could move on to the other firm that was vying for the redevelopment project, Chicago-based Vermilion Campbell.

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2 ADDITIONAL PROJECTS For the development firm working with the city of Wilmington on the 13-story redevelopment project River Place in downtown Wilmington, more local work is on its agenda. The company, Chapel Hill-based East West Partners, announced in February that a historical building undergoing renovation in downtown Wilmington is slated to open as coworking space from Dallas-based Common Desk. The Gaylord Building at 226 N. Front St. is more than 100 years old and has been vacant since it was condemned in the late 1980s. East West bought the Gaylord Building for $975,000 in 2018 with the intent of turning it into office space. “We will be restoring portions of the Gaylord’s original historic Front Street facade, while introducing a thoroughly contemporary interior design to accommodate the flexible and hospitable office environment today’s entrepreneurs prefer,” Lucien Ellison, senior managing partner with East West Partners, said in February. East West is also looking at a much bigger project, another publicprivate partnership with the city that could turn Wilmington’s northern gateway into a $90 million, mixed-use development.


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INDUSTRIAL SPACE ON THE WAY

FILLING RETAIL HOLES

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With a lack of certain types of industrial space in the city of Wilmington and surrounding areas, it was only a matter of time before companies and developers decided to add to the low inventory. In Pender Commerce Park, developers plan to build what would likely be the first modern Class A industrial space for lease in the Wilmington region in more than a decade. Pender Commerce Park Partners 1 LLC, a new entity formed for the development, released plans for the construction in January. In February, a dock building company planned a new facility on a site in New Hanover County. Bellingham, Washington-based Bellingham Marine Industries was planning to relocate in Castle Hayne to expand its local dock manufacturing operation. “We would like to develop a specialty free-cast concrete facility for manufacturing modules in a warehouse,” said Ed Heaton, general manager of Bellingham Marine’s Northeast division, adding that the company is looking to build between 20,000 and 25,000 square feet.

While some retail chains have closed stores in the Wilmington area, others are bringing their more successful brands to the region. For example, a store new to the Wilmington market, Athleta, is expected to open soon at 6807 Main St. in the former J. Crew space, next to Brixx Wood Fired Pizza, at Mayfaire Town Center off Military Cutoff Road in Wilmington. Gap Inc. owns Athleta, a women’s casual and athletic apparel brand that has been boosting the company’s profits in recent years as other sectors in the apparel industry struggle. To the south, Tractor Supply Co. is expected to open in Leland this year. As of January, the company had anticipated building about 19,000 square feet on more than 3 acres in Ibis Landing, a new development planned at Carol-Lynn Drive and U.S. 17 in Leland, said Gary Vidmar, the town’s economic and community development director. Tractor Supply Co. is a retail chain that offers home improvement, agriculture, lawn and garden, livestock and other products.

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Some property that has been in the same hands for decades is changing ownership. In addition to Hanover Center, Wilmington’s first suburban shopping center that was built by its previous owner, The Oleander Co., in the 1950s, some timberland also has new ownership. A timber investment firm recently purchased thousands of acres in five counties from Corbett Industries Inc. The sale encompassed 5,154 acres of timberland in an 18-tract portfolio, mainly in Pender and Duplin counties, but also in Brunswick, Columbus and Bladen counties. The buyers were Georgia-based Cat Tail LLC and Zibelin LLC. They paid more than $7.3 million for the property. Jason Windham, broker with Wilmington-based commercial real estate firm Maus, Warwick, Matthews & Co., said, “The tracts that made up this sale were comprised mainly of managed pine plantations, and have been that way for many years.” Corbett Industries Inc. continues to market more than 10,000 acres (of the 17,000 put up for sale in 2018) throughout Southeastern North Carolina that company officials consider to have significant development potential, Windham said.

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L A Y I N G THE

GROUNDWORK

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In

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K E N D U L L’ s philosophy has been about b u i l d in g t h e ri g h t r e l at i o n s h i p s B Y CH R I S T I NA HA L E Y O' N E A L P HOT O B Y M I CH A E L CLI N E S P E N C E R

W

hen McKinley “Ken” Dull moved to the Wilmington area in the late 1980s, he saw the potential for Wilmington to grow its business community. “I always believed Wilmington was going to have its day in the sun,” Dull said. “It was the only place in North Carolina that you could have a business career and live at the beach at the same time, which is still true.” Dull, owner and president of McKinley Building Corp., graduated from N.C. State University with an engineering degree and started his career with a general contractor in the Winston-Salem area. He later followed a job to Wilmington to join a commercial builder. Dull was one of the lucky ones as jobs in the area at the time were hard to find. “It was a great opportunity to be here at a time when things were just starting to get going,” Dull said. “For the first month I was here, people would ask me how I got my job. They would ask, ‘Did somebody retire, or did they pass away?’ Because otherwise there were no new jobs in Wilmington. And that’s kind of where we were in 1987.” Dull decided to branch out, however, with his own general contracting firm and started McKinley Building Corp. in 1992. Dull began his firm through a relationship with Bobby Harrelson, a prominent Wilmington-area developer. “Bobby helped me get started,” Dull said. “He told me, ‘Go start your business and come back and talk to me.’ So, I did. And he was kind enough that he had some work to give to me.” Dull’s first project in town was a 10,000-square-foot store at 801 S. College Road. The company has since developed a foothold in the vibrant business economy Dull now sees in Wilmington. And what started as a one-person firm, today has more than 70 employees. McKinley Building has earned a reputation as one of the leading locally-owned commercial contracting

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PROFILE

firms in the Port City, with more than 300 projects in its portfolio from Class A offices to multifamily developments. “I believe that we are at the right size for a place like Wilmington,” Dull said. “And I also believe and know that the more spread out you get, the harder it is to maintain the consistency and quality that you have agreed to provide.” McKinley Building is a boutique commercial contracting firm that has built some high-profile projects in the area. This summer, McKinley Building is expected to wrap up construction on Bradley Creek Station, an 80,000-square-foot office and retail building at 5815 Oleander Drive under development by Steve Anderson, of SAMM Properties Inc. “Bradley Creek is probably the largest single Class A office building project in Wilmington in 15 years. And I have been told that the leasing has gone very well for Steve Anderson,” Dull said. Anderson also enlisted McKinley Building for more than 200,000 square feet of space in six buildings that make up the Offices at Mayfaire. McKinley Building started this year on The Harrelson Center’s next phase of renovations, a project slated to be done later this spring, Dull said. The firm several years ago made renovations to the center, a nonprofit that supports and houses other nonprofits. Some of McKinley Building’s recently completed work includes Sawmill Point, a downtown Wilmington waterfront apartment community, which sold last year for $65 million. The company also built an $18 million five-story parking deck and pedestrian bridge at New Hanover Regional Medical Center. Dull said the company has been hired to construct a second parking deck and pedestrian bridge for the hospital. For McKinley Building, however, it has been more about building personal relationships over its 28 years in business. “We work for people, not projects,” Dull said. “And that’s how we get involved in the projects that we end up 2 0 2 0

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PROFILE

doing.” McKinley Building, since the beginning, has maintained its core values of integrity, teamwork, faith, commitment, efficiency, compassion and service to others, Dull said. He also carries on the tradition of his grandfather, who was a builder in the Winston-Salem area in the early 1900s. “We have the skill sets and business capabilities to compete with any large company from Wilmington or from out of Wilmington,” Dull said. “The difference is that we don’t act like a big corporation when it gets to the relationship.” Dull describes taking on a build a lot like a marriage with the client. And McKinley Building, while it does a lot of its projects within a two-hour radius of Wilmington, will follow a good client “wherever they ask us to go,” he said. It’s that company philosophy and commitment to both its clients and the Wilmington community that Dull attributes as the reason for the firm’s success. The company has also been developing relationships with other firms. “What we have done, rather than trying to grow into other markets and spreading ourselves thin and risking our reputation, we have developed strategic relationships with other general contractors that believe in the same core values that we do,” Dull said. One such relationship, for example, helped with the Sawmill Point work, in which the company partnered with a Durham-based builder on the project. With the right strategic partners, Dull said, McKinley Building can take on pretty much anything. “We’ve been very conservative in our growth over the past 28 years. As the old saying goes, ‘It’s about quality, not quantity,’” he said. “We never aspired to be the biggest commercial contractor in Wilmington. We just only wanted to find the right people to work for and be the best general contractor in Wilmington.”

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M A R K E T SNAPSHOT

MARKET SNAPSHOT

FEB.

W I L M I N G T O N A R E A C O M M E R C I A L R E A L E S TAT E H I G H L I G H T S

20192020

BUSINESS

SELECT RETAIL LEASES*

* A selection, but not all, ranked by size

3

5

6

SIZE (sq ft)

1

GUITAR CENTER

4715 NEW CENTRE DRIVE, WILMINGTON

10,000

1

DOLLAR GENERAL

7560 U.S. 117, ROCKY POINT

10,000

1

CAPE FEAR BOXING

1019 MARKET ST., WILMINGTON

10,000

4

O'REILLY AUTOMOTIVE

15489 U.S. 17 N., HAMPSTEAD

8,125

5

KFC

5120 MARKET ST., WILMINGTON

6,000

6

PETPEOPLE

929 MILITARY CUTOFF ROAD, WILMINGTON

5,768

7

PET SUPPLIES PLUS

130 HAYS LANE, PORTERS NECK

5,400

8

ALLIANCE FITNESS CENTER

5424 OLEANDER DRIVE, WILMINGTON

5,027

9

GOING LOCAL**

6859 MONUMENT DRIVE, WILMINGTON

4,002

UNLEASHED

2 S. FRONT ST., WILMINGTON

3,497

10

7

ADDRESS

SOURCE: GREATER WILMINGTON BUSINESS JOURNAL; COSTAR, YEAR-END 2019 REPORT **GOING LOCAL MOVED TO 890 TOWN CENTER DRIVE

“During an emergency, business and homeowners can count on a team that responds quickly, provides quality work and puts their needs first.” — WESLEY DANIEL, PRESIDENT APR EAST

APR

910.463.4800

2908-A ORVILLE WRIGHT WAY,

WILMINGTON, NC 28405

RESTORATION AND COMMERCIAL DEVELOPMENT

WWW.APR-NC.COM

WATER FIRE RESTORATION MOLD REMEDIATION

BRUNSWICK, NEW HANOVER, PENDER, ONSLOW, DUPLIN, BLADEN, SAMPSON AND COLUMBUS COUNTIES

SERVING:

ROOF REPAIR CONTRACTOR RESIDENTIAL COMMERCIAL

LOCALLY-OWNED

YOUR TRUSTED LOCAL RESOURCE

FULL-SERVICE

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MARKET SNAPSHOT

* A selection, but not all, ranked by size

SELECT OFFICE SPACE LEASES*

COMPANY 1

ALCAMI CORP.

2

PORT CITY COURTHOUSE

3

GPM SOUTHEAST LLC

4

VANTACA LLC

5

U.S. SECRET SERVICE

6 CRANFILL SUMNER & HARTZOG LLP

2320 SCIENTIFIC PARK DRIVE, WILMINGTON

74,000

1003 S. 17TH ST., WILMINGTON

34,635

1410 COMMONWEALTH DRIVE, WILMINGTON

19,736

7040 WRIGHTSVILLE AVE., WILMINGTON

17,298

1717 SHIPYARD BLVD., WILMINGTON

13,832 9,248

BIOCOMPOSITES INC.

700 MILITARY CUTOFF ROAD, WILMINGTON

8,829

MCKIM & CREED

2831 CAROLINA BEACH ROAD, WILMINGTON

8,000

301 GOVERNMENT CENTER DRIVE, WILMINGTON

7,554

RBC WEALTH MANAGEMENT

1055 MILITARY CUTOFF ROAD, WILMINGTON

5,978

HISCO INC.

2516 INDEPENDENCE BLVD., WILMINGTON

5,000

921 PRINCESS ST., WILMINGTON

4,800

5041 NEW CENTRE DRIVE, WILMINGTON

4,525

527 CAUSEWAY DRIVE, WRIGHTSVILLE BEACH

4,321

710 MILITARY CUTOFF ROAD, WILMINGTON

4,278

8 9

10

SIZE (sq ft)

101 N. THIRD ST., WILMINGTON

7

FEB.

20192020

ADDRESS

OPINIONLAB

11 12

A SAFE PLACE

13

N2 PUBLISHING

14

PLAYERSPACE

15

BIOCOMPOSITES INC.

SOURCE: COSTAR YEAR-END 2019 REPORT

WilminGton B iz

Frame fame

A Wilmington woman is part of the big picture of a framing software firm

M A G A Z I N E

Page 11

December 1-14, 2017, Vol. 18, No. 25

web

EXCLUSIVE

$2.00

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Catching many cabs

JIM FLECHTNER John Gizdic Brett Martin Jim Morton

WOMEN IN BUSINESS

Jose Sartarelli

Three taxi companies in Wilmington have a new owner wilmingtonbiz.com

DAN BRAWLEY

Jay Wileman Julie Wilsey

Lending leaps

Area banks have been increasing their SBA lending

MIKE ASHCRAFT

Page 4

Carter

Ben David

Brewing growth Page 27

John Monteith

Terry Espy Natalie English Cameron Family Rhonda

Bellamy Bobby Harrelson Randall Johnson Lauren Henderson Dick Jones PHOTO BY CHRIS BREHMER

HAL KITCHIN Charlie Mattox PAUL COZZA Sandy & Ronnie Mcneill Jeff Morvil

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Banking & Finance .............................4-5 Health Care ........................................6-7

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LESSONS IN LEADERSHIP D

BY CHRISTINA HALEY O’NEAL

espite their varied industries, these five women in the Wilmington area helping run organizations, companies and institutions have a lot in common. Their passions for their various fields – whether it’s in technology, health care, law or politics – have driven their successes and commitments to being lifelong learners. They recently shared their thoughts on what it takes to be a leader.

OWN YOUR DECISIONS MONA BADIE, a 13-year GE veteran, is chief information officer and chief digital officer for GE Hitachi Nuclear Energy, a role she assumed in August 2015. Prior to GE, Badie held various leadership positions at Fitch Risk Management, an arm of Fitch Ratings, and Polaroid.

Fred Meyers Dave Nathans Pete Peterson Karl Ricanek Michael

JENNIFER MCCALL Gus Simmons Dave Spetrino Dave Sweyer

FINTECH’S POWER DUO

WOMEN IN BUSINESS

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Carson

Bowen Satrazemis

George Taylor Jennifer Turnage Neil Underwood Amy Wright John

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Jeremy Tomlinson

Duane Hixon Jeff James Richard Johnson Michael McWhorter

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Burrows Smith

Aziz Tom Clifford Chris Cox Diane Durance Judy Girard

The List ...............................................23 Trend Tracker ........................................27

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Chad Paul Chris Reid

Swinny Bill Vassar Gwen Whitley Ed Wolverton

In Profile ..............................................11 Real Estate .................................... 12-14

Monteith

Alison Baringer English Evelyn Bryant Rob Burrus Jerry Coleman Dana Cook

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LIVE OAK BANK’S CHIP MAHAN AND NCINO’S PIERRE NAUDÉ

WILMA’S LEADERSHIP INSTITUTE 2018 MEMBERS: page 2

USHER IN THECharlie INAUGURAL WILMINGTONBIZ 100 STEPHANIE LANIER Tracey Newkirk Tammy Johnny Griffin Hardy

HR WEIGHS IN ON THE SEXUAL HARASSMENT CONVERSATION: page 10

Proctor Jim Roberts Dallas Romanowski Elizabeth Barfield Zane

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“Fun Fact: There’s a Cadillac in the Cape Fear” by Heather Divoky

Sound advice: At GE Hitachi Nuclear Energy, Mona Badie (above) is responsible for all information technology systems and processes as well as commercial software, including the company’s industrial internet efforts.

Index

TITLE SPONSORS

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Ryan Legg

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Shane Fernando Huntley Garriott JIM WALLACE Donna Girardot

Local brewery owners share their journeys, lessons learned

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Daily updates on the latest business happenings in our region

Steve Anderson

Chris Boney

Chris Coudriet Ken Dull Jeff Earp

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TOP 8

MARKET SNAPSHOT

COMMERCIAL SALES of 2019

1

5

PROPERTY

ADDRESS

7 PRICE

8

BUYER

SELLER

1

SAWMILL POINT

15 COWAN ST.

$65,300,000

CHAUCER CREEK CAPITAL

THE DAVIS COMPANIES OF BOSTON AND JOINT VENTURE WITH GEMINI PROPERTIES

2

HANOVER CENTER

3501 OLEANDER DRIVE

$51,400,000

PREFERRED APARTMENT COMMUNITIES AND HARBOUR RETAIL PARTNERS JOINT VENTURE

THE OLEANDER CO.

3

MARKET NORTH APARTMENTS

111 DARLINGTON AVE.

$23,600,000

VITUS

FFAH MARKET NORTH LLC

4

MONKEY JUNCTION SELF STORAGE

5044 CAROLINA BEACH ROAD

$21,500,000

PRIME GROUP HOLDINGS

ARCHIE MCGIRT

5

HOMEWOOD SUITES BY HILTON WILMINGTON / MAYFAIRE

6732 SWAN MILL ROAD

$18,300,000

THREE WALL CAPITAL

GENERATION SRE WILMINGTON MAYFAIRE LLC

6

ALCAMI CORP. OFFICES

23RD STREET NORTH AND SCIENTIFIC PARK DRIVE

$15,711,000

MATTIE EQUITY LLC

ALCAMI CORP.

7

DEERBROOK APARTMENT HOMES

703 GRATHWOL DRIVE

$14,400,000

CIG DBK JG LLC ET AL.

DEERBROOK LLC

8

THE SHIPYARD AT WILMINGTON

719 GALLEY LANE

$13,150,000

SHIPYARD WILMINGTON INVESTORS

SHIPYARD VILLAGE WILMINGTON LLC

(PART OF BIGGER SALE)

SOURCES: NEW HANOVER COUNTY TAX DEPARTMENT AND REGISTER OF DEEDS; GREATER WILMINGTON BUSINESS JOURNAL

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THE SCENE WilmingtonBiz Events

Elizabeth Barfield and Jonathon Forte at WilmingtonBiz 100.

Amanda Krankski at the 2020 Book on Business launch party.

Snapshots from the WilmingtonBiz 100 and 2020 Book on Business launch party. Stay tuned to upcoming events at WilmingtonBiz.com.

Dr. Charlie and Becky Hardy at WilmingtonBiz 100.

Alexandra Gosiengfiano, Stacy Schulman, Brittney Keen at the 2020 Book on Business launch party.

Alex King and Keith Beatty at the 2020 Book on Business launch party.

Dr. Jose Sartarelli, Katherine Sartarelli, David Swain, Chad Paul, and Robin Paul at WilmingtonBiz 100.

Lauren Henderson, Gwen Whitley at WilmingtonBiz 100.

Chris Coudriet, Spence Broadhurst, Leigh Coudriet at WilmingtonBiz 100

U PCOM I NG EVE NTS Coastal Entrepreneur Awards May 21, 2020

WilmingtonBiz After Hours May 27, 2020

WILMA Social Hour June 6, 2020

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Power Breakfast June 18, 2020

WILMA Leadership Accelerator July 15, 2020

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RESTAURANT R O U ND U P

RESTAURANT ROUNDUP

COMMUNITY

CHEF

BY JESSICA MAURER

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HRISTI FERRETTI IS A WOMAN WHO WEARS MANY HATS. WIFE. MOTHER. BUSINESS OWNER. CHEF. TEACHER. COMMUNITY ADVOCATE. VOLUNTEER.

Ferretti co-owns Pine Valley Market with wife, Kathy Webb, and together the couple has a 12-year-old son, Alex. The market, which includes a cafe and catering company, celebrated 18 years in business at the start of the year. When Ferretti and Webb moved to Wilmington to take over the business in 2003, the market served as a butcher shop and catering company with a sampling of prepared foods for carryout and plenty of specialty items from purveyors such as Robert Rothschild Farm and Stonewall Kitchen. It was one of the few local shops that carried these coveted items, and customers didn’t hesitate to spend a few extra dollars for gourmet dressings, jams, marinades and condiments. But when the recession hit five years later, that was no longer the case. With the downturn in the economy, many of the market’s regulars were forced to trim their budgets. Yet despite that, Ferretti said many continued to support the market however they could. “People may not have been spending what they used to, but they still made a point of coming in because they knew how important it was,” she said. In an effort to draw more customers to the market, Ferretti and Webb decided to make the changes necessary for customers to be able to dine in. “It was kind of a Hail Mary move,” Ferretti said. “There were a lot of peaks and valleys, and we never knew from one day to the next how to prepare.” Once the market had a steady lunch business, they decided to open for breakfast as well, which was hugely popular but very taxing on the staff. “For our staff to do what they do on a Friday and Saturday night and then

RESTAURANT ROUNDUP

have to come in and make biscuits at 5 a.m. was really difficult,” Ferretti said. So in an effort to preserve the wellbeing of the staff, Ferretti and Webb decided to pull the plug on breakfast and close on Sundays. For Ferretti, this was particularly challenging because it was one of the first times she had to say no to a part of the business. And saying no is not something that comes naturally to Ferretti. In addition to overseeing day-to-day operations at the market and managing off-site catering, Ferretti has become well known around the Port City for her community involvement. Her outreach efforts have earned her numerous accolades, including a Women of Achievement Award from the YWCA Lower Cape Fear and a recent Toasty Award nomination. It was by chance that she catered the initial local meeting of organizers looking to establish what would become North Carolina’s first all-girls public charter school, the Girls Leadership Academy of Wilmington (GLOW). “There were people there from the New York school,” Ferretti said, referring to the Young Women’s Leadership Network of which GLOW is an affiliate, “and the presentation they gave left me with tears in my eyes.” She volunteers at the school, assisting with culinary classes, and for the past two years has served as the chef liaison for the academy’s annual celebrity chef fundraising events, assisting visiting chefs Robert Irvine and Tyler Florence in everything from menu planning and budgeting to assessing equipment needs and sourcing ingredients. It’s a major time commitment, but it’s a position Ferretti truly enjoys. “GLOW has become a huge passion of mine,” Ferretti said. “I’m a teacher, that’s what I went to school for, so I love the chances I get to work with these girls. And it’s a huge reward for me to collaborate with local chefs that I don’t normally get to cook with, as well as chefs from outside of Wilmington. It’s an incredible learning opportunity that really reignites my passion for feeding

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people.” It’s that, Ferretti said, that she finds most rewarding. Not the act of cooking itself, but feeding others. That is a big part of what led her to volunteer her time and kitchen space to the efforts of World Central Kitchen (WCK) during Hurricane Florence. Pine Valley Market served as a satellite kitchen for WCK in the days following Florence in September 2018, serving thousands of meals per day. “What I learned from our efforts in response to Florence is that Wilmington is a strong, compassionate, tight-knit community that steps up in times of need,” Ferretti said. “Pine Valley Market is a piece of a larger picture of humanitarianism that is shown over and over again in Wilmington.” Rather than having a marketing budget, Ferretti and Webb prefer to donate their time and food to charitable events. Their presence at these events, where the public gets to taste their food and see their commitment to the community, is their preferred method of advertising. Pine Valley Market has participated in numerous events over the years from the Chef ’s Feast benefiting the Food Bank of Central & Eastern North Carolina, to The CARE Project, to the Epicurean Evening benefitting the Methodist Home for Children to the Wish Upon a Chef event, benefitting the Make-A-Wish Foundation of Eastern North Carolina, just to name a few. “The exposure to guests at these events inevitably brings people into the market and generates catering business,” Ferretti said. “And it’s something we love to do.” Ferretti said she’s still in awe over the fact that the community has been so supportive throughout their journey. “We’re so grateful to Wilmington for welcoming us 18 years ago and for supporting us and growing with us over the years,” she said. “This is home.” For more restaurant news, sign up for the Business Journal's weekly Restaurant Roundup email by going to WilmingtonBiz. com.

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THE TAKEAWAY

PUT A

BIRD ON IT The Hive boutique hotel recently opened on North Second Street as an aparthotel, short for apartment and hotel that combines elements of each. Envisioned by business partners Robert Rosenberg and Kaylie O’Connor, it was built by Bauen Group’s Eric Davis and designed by Rob Romero, of Romero Architecture. Robin Hertzog pulled together the hotel’s eclectic interior décor, including for each of its fourteen rooms. photo by MELISSA HEBERT

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Profile for WilmBiz

WilmingtonBiz Magazine - 2020 Commercial Real Estate