N.C. Treasurer weighs in on Freeman Park purchase proposal

N.C. Treasurer weighs in on Freeman Park purchase proposal
Published: Feb. 1, 2022 at 11:28 AM EST
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CAROLINA BEACH, N.C. (WECT) - Late last year, the Town of Carolina Beach had finally reached an agreement to end four lawsuits with property owners at Freeman Park and intended to purchase the land for $7 million. The deal that was presented included a 20-year amortization rate at 5% and a seven-year balloon payment, meaning after seven years, the remaining balance would be due.

The town stated the cost of the park would be $7 million, however, at a 5% over seven years, the park will cost closer to $8.5 million, with nearly $5 million due at the end of the seven years. There is no early payment penalty meaning if the town was able to secure additional grant funding from the state or other entities, they could pay the land off before the seven years is up.

Another option would be for the town to secure a loan through more traditional funding routes, pay off the balloon early, and make payments on the balance over an extended period of time.

But despite the seemingly inked agreement, it’s not quite ready to move forward yet.

State Treasurer Dale Folwell said things like this have to be approved by the Local Government Commission (LGC) before they can go through and that’s a good thing for taxpayers in Carolina Beach. The LGC approves deals like this and helps government’s get the best deals that they can get.

“As the state treasurer of North Carolina and the chair of the local government commission and keeper of the public purse I’m not just interested in the finances of the state, but also all the local entities like Carolina Beach, they have to report to us,” Folwell said.

As an example of the LGC saving taxpayers money, Folwell pointed to the New Hanover County Government Center project. Following the proposal, the LGC helped the county re-negotiate the deal to help get a lower interest rate for the project.

However, not all projects are the same. The Freeman Park deal is an agreement that was crafted to end the lawsuits the town has been entrenched in with private landowners, so it would likely be up to the landowners to decide if they would agree to any changes.

That could be a problem for the town.

“Carolina Beach has not finalized its application and supporting paperwork for this land purchase at this time. However, it has been discussed with staff and the town was advised that LGC does not consider balloon payment options appropriate for North Carolina local government financings. Staff is working with the town to get this resolved,” Deputy State Treasurer Frank Lester said.

Town officials declined interviews based mainly on the fact that they don’t have much of an update to provide, and the contract’s specifics are still being withheld from the public since they have not finalized the deal.

“I was debriefed by Attorney [Noel] Fox late last week and it sounds like we are awaiting finalization of a document from the owners before we can schedule to go before the LGC for financing approval,” Mayor Lynn Barbee said.

The town has pledged to not use funds from the town’s general fund to pay for the park; instead, they are relying on user fees generated from the park, and are actively applying for grants to help fund the project. While this is a feasible plan with the park bringing in close to $1 million annually, there have been some significant changes to the park over the past few years, including park limitations and the closure of the beach past the ‘choke point’ due to erosion and high tides.

Once the final plans are submitted to the LGC, there should be a clearer look at what the plans for the park are, and how the town will move forward.

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