development agreement - north carolina · 2020-05-14 · 1 development agreement this development...

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1 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into on the ____ day of June, 2020, by the COUNTY OF NEW HANOVER, a public body, corporate and politic, having its principal office at 230 Government Center Drive, Wilmington, North Carolina (the "County”) and CAPE FEAR FD STONEWATER, LLC, a North Carolina limited liability company corporation, having its principal place of business at 1051 Military Cutoff, Suite 200 Wilmington, North Carolina, its successors and assigns (the “Developer”), regarding the redevelopment of certain land located at 230 Government Center Drive, Wilmington, North Carolina (the "Project"). W I T N E S S E T H: WHEREAS, the County owns the land located at 230 Government Center Drive, Wilmington, North Carolina, as more particularly described on Exhibit A attached hereto and incorporated herein (the "Property"); and WHEREAS, in 2019, the County identified an interest to redevelop the Property and the Government Center located thereon to improve the County's facilities, incorporate a new Emergency Operations and 911 Center, and to improve the County's tax base with the private development including residential, commercial, and/or office uses; WHEREAS, in the fall of 2019, the County issued a Request for Qualifications and carefully evaluated the private developer candidates who responded to the same; WHEREAS, on January 21, 2020, the County selected the Developer as its preferred development partner for redevelopment of the Property; WHEREAS, the Property includes a future parcel or tract of land that the parties intend to develop as a new government center and Emergency Operations and 911 Center for the County, identified on Exhibit B attached hereto as "Parcel 1" (referred to herein as "Parcel 1"); and WHEREAS, the Property includes a future parcel or tract of land that the parties intend to be conveyed to Developer for future development, identified on Exhibit B attached hereto as "Parcel 2" (referred to herein as "Parcel 2"); and

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Page 1: DEVELOPMENT AGREEMENT - North Carolina · 2020-05-14 · 1 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into on the ____ day of June, 2020,

1

DEVELOPMENT AGREEMENT

THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into on the ____

day of June, 2020, by the COUNTY OF NEW HANOVER, a public body, corporate and

politic, having its principal office at 230 Government Center Drive, Wilmington, North Carolina

(the "County”) and CAPE FEAR FD STONEWATER, LLC, a North Carolina limited liability

company corporation, having its principal place of business at 1051 Military Cutoff, Suite 200

Wilmington, North Carolina, its successors and assigns (the “Developer”), regarding the

redevelopment of certain land located at 230 Government Center Drive, Wilmington, North

Carolina (the "Project").

W I T N E S S E T H:

WHEREAS, the County owns the land located at 230 Government Center Drive,

Wilmington, North Carolina, as more particularly described on Exhibit A attached hereto and

incorporated herein (the "Property"); and

WHEREAS, in 2019, the County identified an interest to redevelop the Property and the

Government Center located thereon to improve the County's facilities, incorporate a new

Emergency Operations and 911 Center, and to improve the County's tax base with the private

development including residential, commercial, and/or office uses;

WHEREAS, in the fall of 2019, the County issued a Request for Qualifications and

carefully evaluated the private developer candidates who responded to the same;

WHEREAS, on January 21, 2020, the County selected the Developer as its preferred

development partner for redevelopment of the Property;

WHEREAS, the Property includes a future parcel or tract of land that the parties intend to

develop as a new government center and Emergency Operations and 911 Center for the County,

identified on Exhibit B attached hereto as "Parcel 1" (referred to herein as "Parcel 1"); and

WHEREAS, the Property includes a future parcel or tract of land that the parties intend

to be conveyed to Developer for future development, identified on Exhibit B attached hereto as

"Parcel 2" (referred to herein as "Parcel 2"); and

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WHEREAS, the Project will promote economic and cultural development of the area, and

will enhance the public welfare and the public use and enjoyment of the area; and

WHEREAS, it is the desire of the County and Developer that construction of the Project

be carried out in a coordinated and efficient manner; and

WHEREAS, upon completion of the Government Center Improvements, as hereinafter

defined, the County shall hold a leasehold interest in said Public Improvements; and

WHEREAS, the consideration to be paid by the County to Developer for the Public

Improvements have been found to be reasonable; and

WHEREAS, the consideration to be paid by Developer to the County for the portion of

the Property to be conveyed to the Developer has been found to be reasonable.

NOW, THEREFORE, in consideration of the foregoing premises, this Agreement and

undertakings hereinafter set forth, the County and Developer hereby agree as follows:

1. Subdivision of the Property. Developer shall prepare a recombination

subdivision plan (the "Subdivision Plat") to divide the Property into Parcel 1 and Parcel 2 in a

manner materially similar to the concept plan attached hereto at Exhibit B, and Developer and

County shall cooperate to obtain approval for and record said Subdivision Plat to facilitate the

establishment of Parcel 1 and Parcel 2 as independent parcels of land.

2. Ground Lease of Parcel 1. County shall ground lease Parcel 1 to the

Developer for term equal to twenty (20) years and the actual time to complete construction of the

Government Center Improvements (as defined below) for an annual consideration of $1.00 (the

"Ground Lease"). At completion of the Ground Lease, County will retain ownership of Parcel 1

and any and all improvements therein, including the Government Center Improvements, and

appurtenances thereto, with no further additional consideration paid for those improvements.

Notwithstanding the forgoing, in the event that the County defaults under the Government Center

Lease (as defined below) and the Government Center Lease is terminated as a result, Developer

shall have the right to extend the term of the Ground Lease for up to three (3) additional terms of

ten (10) years each. The Manager and staff of the County and the Developer shall cooperate to

prepare and execute a Ground Lease consistent with these terms, and acceptable to each parties'

lender, if any, and shall execute the same upon approval of the transaction by the County

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Commissioners as described in Section 8.a. below, and execution of the Government Center

Lease.

3. Construction of the Government Center Improvements. Pursuant to

the Government Center Lease, Developer shall construct a new Government Center Complex,

including a 911/Emergency Operations Center, consistent with the presentation, plans and

specifications attached hereto at Exhibit C (collectively, the "Government Center

Improvements"), and materially pursuant to the anticipated construction schedule attached hereto

at Exhibit D. Said Government Center Improvements shall include adequate, nonexclusive,

parking to support the same operations planned thereon, either on or adjacent to the Property.

Developer shall be responsible for completing design details, obtaining all permits and

entitlements necessary to complete the same, and the County shall use all reasonable efforts to

cooperate to obtain said permits and entitlements.

The provisions of the Government Center Lease regarding the construction of the

Government Center Improvements shall include the following:

A. Insurance provisions regarding liability, worker's compensation, and builders

risk mutually acceptable to the parties and materially similar to the terms

proposed by the County to the Developer prior to execution of this

Development Agreement.

B. Bonding Requirements consistent with the following:

a. Performance Bond. Prior to Commencement of Construction,

Developer shall furnish, or cause to furnished, a performance and

maintenance bond, executed by a company duly authorized to do

business in North Carolina, in an amount equal to at least One

Hundred Percent (100%) of the construction costs of the Government

Center Improvements to guarantee the faithful performance of the

work, subject to adjustment throughout completion of the several

phases of the Government Center Improvements.

b. Payment Bond. Prior to Commencement of Construction, Developer

shall furnish, or cause to be furnished, a payment bond, executed by a

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company duly authorized to do business in North Carolina, in an

amount equal to at least One Hundred Percent (100%) of the

construction costs of the Government Center Improvements, subject to

adjustment throughout the completion of the several phases of the

Government Center Improvements.

In connection with construction of the Government Center Improvements,

Developer shall direct its general contractor to: (i) use its reasonable and good faith efforts to

comply with G.S. 143-128.2, G.S.143-128.4, and to recruit and select small business entities, and

(ii) to fully comply with the U.S. Department of Homeland Security employee legal status E-

Verify requirements for itself and all its subcontractors.

4. Government Center Lease. Developer shall lease Parcel 1 including all

improvements thereon to the County for a term of twenty (20) years plus the actual time to

complete the Government Center Improvements for a rental rate no greater than Four Million

Five Hundred Seven Thousand Fifty Four and 00/100 Dollars ($4,507,054.00) per year,

commencing upon substantial completion of the Government Center Improvements as described

in Exhibit C, pursuant to a triple net lease (NNN) to be prepared and executed by the parties,

consistent with these terms and acceptable to each parties' lender, if any. The Government

Center Lease shall include a contingent credit to the County based on actual savings in the cost

to complete the Government Center Improvements. The Manager and staff of the County and

the Developer shall execute the Government Center Lease upon approval of this Agreement by

the Board of Commissioners, and said Government Center Lease shall be contingent on LGC

approval similar to the contingency described in Section 8.b. below.

5. Purchase and Sale of Parcel 2. The County agrees to sell and convey fee

simple title to Parcel 2, free of any unacceptable encumbrances, to the Developer for a price

equal to Fifteen and 28/100 Dollars ($15.28) per square foot of land included in Parcel 2, based

on the final subdivision plat of the same, after satisfaction of all applicable contingencies,

including without limitation: (i) all necessary and desirable permitting and entitlement for

Developer's intended use of Parcel 2, and (ii) resolution of any and all interfering title

encumbrances necessary to allow Developer's intended use of Parcel 2. Closing on said purchase

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and sale shall be contingent upon substantial completion of the Government Center

Improvements. The Manager and staff of the County and the Developer shall execute a Purchase

and Sale Agreement for the sale of Parcel 2 to the Developer, inclusive of the terms herein, upon

approval of this Agreement by the Board of Commissioners as described in Section 8.a below.

6. Development of Parcel 2. The Developer will commence construction of

a mixed-use development, to include at least 5% of the residential units in said development for

workforce housing, with an anticipated value of approximately forty six million dollars

($46,000,000) on a portion of Parcel 2 within twenty four (24) months of acquisition of title to

the same. The Developer will present final plans along with the cost estimate for said

improvements to the County and receive input from the County Commissioners on the mixed-

use improvements prior to beginning construction. The Developer will commence construction

of an office or other commercial use development with an anticipated value of approximately

twenty four million dollars ($24,000,000) on another portion of Parcel 2 to be subdivided from

Parcel 2 (the "Office Tract") within eighty four (84) months of acquisition of title to Parcel 2.

The Developer will present final plans along with the cost estimate for said improvements on the

Office Tract to the County and receive input from the County Commissioners on the office or

other commercial use development prior to beginning construction of the same. In the event that

the Developer fails to timely commence construction of said developments, subject to force

majeure, then: (i) with regard to the initial mixed use development, the County will have the

option to repurchase Parcel 2 for ninety percent (90%) of the Developer's purchase price for the

same, and, (ii) with regard to the intended development of the Office Tract portion of Parcel 2,

the County will have the option to repurchase said Office Tract for a price equal to 90% of the

Developer's purchase price for the same, calculated on a price per square foot basis as described

above. The right to repurchase will be set forth in the deed of conveyance from County to

Developer or similar instrument of record, to run with the land until the conditions that would

trigger the same are satisfied. The Developer shall identify the County as a third party

beneficiary of any construction completion assurances provided by the Developer to the

Developer's lenders and investors with regard to the construction of the mixed-use development

and other office or commercial use improvements described above, as said completion

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assurances may be adapted from time to time.

7. Temporary Construction Easement. In connection with the

Government Center Lease, the County shall grant and convey to the Developer a temporary

construction easement over Parcel 2 from the date of execution of the Government Center Lease

until the completion of the Government Center Improvements.

8. Contingent upon Approval. The parties obligations hereunder are

expressly conditioned on the following:

a. Approval by the County Commissioners. This Agreement is

contingent upon approval of the same by an affirmative vote of the County Commissioners after

publication and notice of the Agreement pursuant to N.C.G.S. § 143-128.1C.

b. Approval by the Local Government Commission of the State of

North Carolina (the "LGC"). This Agreement is contingent upon approval of the Government

Center Lease by the LGC. The County shall use best efforts to promptly obtain the approval by

the LGC of financing of the obligations described herein, including the payment of rent under the

Government Center Lease as consideration for the construction of the Government Center

Improvements.

9. County Authority. The County Manager and staff are expressly

authorized to enter and execute any and all necessary, desirable, and ancillary agreements and

instruments utilized to facilitate the transactions contemplated hereby, including without

limitation instruments of conveyance, leases, easement agreements and the like.

10. Notices. All notices and other communications required or permitted

under the provisions of this Agreement ("Notice") shall, unless otherwise specified, be in

writing, sent by hand delivery or by certified first class mail, postage prepaid, with return receipt

required, to the following addresses:

As to the County:

County of New Hanover 230 Government Center Drive Wilmington, NC 28403 Attn: County Manager With a copy to:

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County Attorney 230 Government Center Drive Wilmington, NC 28403

Attn: Kemp Burpeau As to Developer: Cape Fear FD Stonewater, LLC Attn: Brian Eckel

1051 Military Cutoff Suite 200 Wilmington, NC, 28405

With a copy to: Ward and Smith. P.A.

Attn: Sam Franck 127 Racine Drive Suite 101 Wilmington, NC 28403

or to such other address in the United States as the party to whom the notice is sent shall have

designated in writing in accordance with the provisions of this Section 9. Any such Notice shall

be deemed received (a) in the case with a deposit with an overnight courier, on the business day

immediately following such deposit, and (b) in the case of deposit in United States mail, on the

date appearing on the return receipt therefor. Any party to this Agreement may change its

address by giving the other party written Notice of it new address as herein provided.

11. Additional Terms.

a. The County represents and warrants to the Developer, and the

Developer represents and warrants to the County that: (i) it knowingly and voluntarily agrees to

all the terms set forth in this Agreement, (iii) it knowingly and voluntarily agrees to be legally

bound by this Agreement, (iv) the execution of this Agreement has been duly and validly

authorized by all necessary and appropriate authority, subject to the contingencies described

herein.

b. This Agreement, including all Exhibits attached hereto, constitutes

the entire agreement between the parties as to the transaction described herein, and no

amendment, modification, or addendum to this Agreement shall be effective unless in writing

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dated subsequent to the date hereof and executed by the duly authorized officers of the respective

parties hereto. The requirement for such a writing shall apply to any waiver of the requirement

of a written modification pursuant to this paragraph and shall be deemed an essential term of this

Agreement. This Agreement will be deemed drafted by all parties hereto and shall not be

construed against any party as the drafter of this Agreement. This Agreement shall inure to the

benefit of the parties hereto and their respective successors, heirs, and assigns.

c. Whenever possible, each provision of this Agreement shall be

interpreted in such manner as to be effective and valid under applicable law, but if any provision

of this Agreement is found to be invalid, illegal or unenforceable in any respect under any

applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not

affect any other provision or any other jurisdiction, but this Agreement shall be reformed,

construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision

had never been contained herein.

d. The validity, construction, interpretation, and administration of this

Agreement shall be governed by the substantive laws of the state of North Carolina, and any

action brought in relation to or to enforce or construe the same shall be brought in the Superior

Courts of North Carolina, and each party waives any rights or defenses relating to jurisdiction.

e. This Agreement may be executed in separate counterparts, each of

which shall be deemed an original, and all which taken together shall constitute one and the same

instrument.

[Signatures to Follow]

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IN WITNESS WHEREOF, the parties have set their hands and seals to this Agreement this ___

day of June_____, 2020.

COUNTY OF NEW HANOVER

By: ___________________________________ Name: Chris Coudriet Title: Manager

CAPE FEAR FD STONEWATER By: ___________________________________ Name: Title: Manager

Exhibits Attached

A. Legal Description of the Property

B. Planned Subdivision of Parcels 1 and 2

C. Plans for Government Center Improvements

D. Anticipated Construction Schedule

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EXHIBIT A

Legal Description of Property

Includes New Hanover County Tax Parcels: R04916-003-002-000, R04916-003-007-000, and R05013-008-043-002 All of those tracts or parcels of land lying and being in New Hanover County, North Carolina and being more particularly described as follows: Parcel 1- R04916-003-002-000

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Parcel 2- R04916-003-007-000

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Parcel 3- R05013-008-043-002

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EXHIBIT B

Approximate Planned Subdivision of Parcel 1 and Parcel 2

Attached

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EXHIBIT C

Preliminary Conceptual Plans for Government Center Improvements

The following is attached:

New Hanover County Government Center, Presentation dated May 7, 2020, including preliminary exterior elevations and renderings prepared by LS3PArchitecture PLLC, and preliminary Site Plan prepared by Mihaly Land Design.

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EXHIBIT D

Anticipated Construction Schedule for Government Center Improvements

The Preliminary Schedule for Government Center Redevelopment prepared by Thomas Construction Group, dated May 7, 2020 attached. This schedule is based on an anticipated Notice to Proceed date of June 15, 2020 and subject to change.

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HU

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1

Fou

nd

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20

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26

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de

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09

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on

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16

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rM

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Sep

Oct

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vD

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bM

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pr

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Jun

Jul

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gSe

pO

ctN

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cJa

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Oct

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Ap

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Jul

20

20

20

21

20

22

20

23

PR

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STRU

CTIO

N

Cou

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missio

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roce

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DU

E D

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NC

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l

NC

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Bu

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Re

view

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eceive

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VE

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NT

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IL

Schem

a�

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sign D

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struc�

on

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cum

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ts

PH

ASE

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CC

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bilize

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n C

on

trol

Site D

em

oli�

on

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rb &

Asp

ha

lt

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din

g, Cu

rb, Sid

ew

alks, Sto

ne

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sph

alt

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ASE

2 ­ E

OC

| HU

B &

OFFIC

E B

UILD

ING

SITE

WO

RK

Mo

bilize

& E

rosio

n C

on

trol

Site D

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oli�

on

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rb &

Asp

halt, P

ipin

g

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itary Sew

er, W

ater

Gra

din

g, Curb

, Side

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dsca

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g

Fine

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din

g & A

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alt Pa

vem

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re

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s

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UB

Fou

nd

a�o

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de

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on

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de

Pre

limin

ary

NH

C G

ov

ern

me

nt C

en

ter R

ed

ev

elo

pm

en

t07-May-20

Re

main

ing L

eve

l of E

ffort

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al L

eve

l of E

ffort

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al W

ork

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main

ing W

ork

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l Rem

ain

ing W

ork

Mile

stone

Pa

ge

1 o

f 4T

AS

K filte

rs: C

ritica

l, In P

rogre

ss, N

ot S

tarte

d.

Page 24: DEVELOPMENT AGREEMENT - North Carolina · 2020-05-14 · 1 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into on the ____ day of June, 2020,

Ac�

vity Nam

eO

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ra�o

n

Re

main

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START D

ATE

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D

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wte

ch Sid

ing

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15

14

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v­21

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ch C

ou

rtyard

& H

VA

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qu

ip1

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52

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07

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riors

21

02

10

24

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HU

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47

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05

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­22

Inte

rior W

all Fra

min

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10

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p­2

1

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Ro

ugh

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all &

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25

26

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02

03

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ram

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T, Light Fixtu

res, H

VA

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iffu

sers

20

20

28

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24

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v­21

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bin

etry &

Ca

sew

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10

10

11

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l Pain

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vD

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bM

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pr

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Jun

Jul

Au

gSe

pO

ctN

ov

De

cJa

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Jun

Jul

20

20

20

21

20

22

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23

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Pan

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as�

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p P

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UB

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min

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of ­ E

OC

& H

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oo

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ch C

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g

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UB

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t

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limin

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ev

elo

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en

t07-May-20

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ing L

eve

l of E

ffort

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al L

eve

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ffort

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al W

ork

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main

ing W

ork

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l Rem

ain

ing W

ork

Mile

stone

Pa

ge

2 o

f 4T

AS

K filte

rs: C

ritica

l, In P

rogre

ss, N

ot S

tarte

d.

Page 25: DEVELOPMENT AGREEMENT - North Carolina · 2020-05-14 · 1 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into on the ____ day of June, 2020,

Ac�

vity Nam

eO

rigin

al

Du

ra�o

n

Re

main

ing

Du

ra�o

n

START D

ATE

SCH

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D

FINISH

DAT

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as P

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20

20

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02

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20

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09

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AC

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20

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10

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23

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Inte

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10

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10

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23

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20

20

10

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09

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24

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Fina

l Pain

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24

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3­M

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Page 26: DEVELOPMENT AGREEMENT - North Carolina · 2020-05-14 · 1 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into on the ____ day of June, 2020,

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