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Cape Fear StateBotanic Park and Bird Sanctuary

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ProspectusPreliminary

[Revised Draft–July 11, 2013]

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RisingwaterAssociatesSouthport, North Carolina

Prepared forSave the Cape, Inc.

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Contents

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Cape Fear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Area Wildlife Habitat and Natural Heritage Areas. . . . . . . . . . . . . . . . . . . . . . . . 6

The Proposed Park. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Economic Impacts of Parks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The Ports Authority Property.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Surrounding Uses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The State Parks System.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Criteria for New Parks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Implementation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Ownership of the Property.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21State Ports Authority Debt.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Ports Authority Capital Needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Sources of State Ports Authority Capital Funds. . . . . . . . . . . . . . . . . . . . . . . . . 25Supplementary Funding Sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Cape Fear State

Botanic Park and Bird SanctuaryProspectus (Preliminary)

It shall be the proper function of the state to acquire and preserve park, recreationaland scenic areas, and in every other appropriate way, to preserve as a part of the

common heritage of this State, its open lands and places of beauty.–North Carolina Constitution

Summary

This is a proposal to create a new State park at the Cape Fear. The Cape Fear is abiodiversity hotspot, with unique species of plants, birds and animals, some of which areendangered and some of which exist nowhere else. The people of the State and the guests ofthe State should have the opportunity to enjoy, appreciate, and learn about the very specialplant and animal life of the Cape. The unusual trees and plants–including carnivorous plantsunique to the region–and the astonishing splendor of the birds of the region are assets thatdeserve to be displayed and nurtured.

The opportunity for a new park arises because an agency of the State, the NorthCarolina State Ports Authority, owns a 600-acre undeveloped tract on the Cape Fear River inthe heart of this prolific area. The property was purchased in 2006 for a very large containerterminal, but that project has been put aside so the State Ports Authority can devote itsresources to projects and services that more efficiently benefit the State.

The State Ports Authority needs substantial amounts of capital for debt repayment and new business projects, and will be seeking those funds from the General Assembly. This is aplan for the State to receive the land as direct value for its grants to the ports, instead of simplyproviding a subsidy. The Ports Authority would obtain needed funds to benefit the Stateeconomy; the State would obtain a unique and irreplaceable asset for the State parks system.

State parks are significant economic drivers. Both North Carolina and BrunswickCounty, where the Ports Authority’s land is located, depend to a substantial extent on traveland tourism, and our State parks, like National parks, return ten dollars in benefits for everydollar spent. But Brunswick County does not have a State park.

The plan contemplates a destination park, a large botanic park focusing on NorthCarolina’s trees and plants, particularly those of the Cape Fear region. The State does not nowhave a botanic garden or arboretum in its parks inventory. The same facility would function asan active bird sanctuary, another missing element of the park system. Although there aremany passive bird sanctuaries reserved in the State, more often than not those are inaccessible. This park would be for people as well as birds. Walkways, exhibits, trestles over wetlands, allproviding places to see to the stunning variety of birds that inhabit and visit the Cape Fear.

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The Cape Fear

The Cape Fear is a region of unique biogeographic features and extraordinarybiodiversity. The southeastern coastal plain of North Carolina is an area of particularly highbiodiversity, but within that area the Cape Fear is the highest. The Nature Conservancyidentifies the Cape Fear as a ‘biodiversity hotspot,” with greater diversity of plant and animalspecies than any area along the East Coast north of Florida. Brunswick County, whichembraces most of the Cape, has the largest number of rare species in the State. Many of thosespecies grow nowhere else, and are endangered or threatened.

Biodiversity “hotspots” in the United States. Note the Cape Fear region.

The region has

* 50 different natural communities * 300 species of animals and plants * 19 federally threatened or endangered species * 63 state threatened or endangered species * 22 endemic species of plants * 19 endemic species of animals * 100% of the world’s native Venus flytraps * The oldest trees east of the Rocky Mountains, including a 1,700-year-old Bald Cypress.

Yet the North Carolina State park system does not include a State park in BrunswickCounty–even though the County is the State’s sixth largest and the tenth most visited of the 100

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counties. The system has reserved areas in the County on the east side of the Cape Fear Riveras “natural areas,” but these are inaccessible and without visitors’ facilities; they have beenreserved to protect the unique flora and fauna but not provide recreational or educationalopportunities. The Nature Conservancy and the North Carolina Coastal Land Trust, privatefoundations, have reserved large tracts in the area by acquiring ownership or conservationeasements, but those, too, focus on protection of unique ecological features and not recreation.

This is a proposal to create a new State park at the Cape Fear that would permit thepeople of the State and the guests of the State to enjoy, appreciate, and learn about the veryspecial plant and animal life of the Cape. The unusual trees and plants–including carnivorousplants that grow nowhere else–and the astonishing splendor of the birds of the region are assetsthat deserve to be displayed and nurtured.

The opportunity arises because an agency of the State, the North Carolina State PortsAuthority, owns a 600-acre tract on the shore of the Cape Fear River in the heart of thisprolific area. The property was purchased in 2006 for a very large container terminal, but thatproject has been put aside so the State Ports Authority can devote its resources to projects andservices that more efficiently benefit the State, particularly the eastern part of the State.

The property, shownat right, has never beendeveloped beyond use as afarm more than 30 yearsago. Besides the fields andwoodlands, the site includesnearly 200 acres of saltmarsh, regarded as the mostbiologically productivehabitat in nature. It alsoincludes a tidal freshwatercreek and several ponds.

The property is insoutheastern BrunswickCounty, an area whoseeconomy is based on tourism, vacation stays, and low-density retirement housing, all fosteredby the natural characteristics of the area.


Existing Parks and Natural Areas

This map from the NCDENR Division of Parks and Recreation shows the State reservations at the Cape Fear. All except Brunswick Town are on the east side, accessiblefrom greater Brunswick County on the west side only by ferry or by river crossing 20 milesnorth at Wilmington. Brunswick Town and Fort Fisher Historic Sites are managed by theDepartment of Cultural Resources. Carolina Beach State Park, the North Carolina Aquarium,and Fort Fisher State Recreation area are active tourist attractions, operated by the Division ofParks and Recreation. The other sites are passive natural areas, relatively inaccessible.

Ports Authority Property


This map shows the lower Cape Fear, where the park would be located. US highway17 passes through Brunswick County, connecting to coastal tourist areas to the north andsouth, and intersecting Interstate 40 and US74/76, connecting to I95 and to the central andwestern parts of the State.


Area Wildlife Habitat and Natural Heritage Areas

This map from the NCDENR Conservation Planning Tool shows the biodiversity/wildlife habitat assessment for the lower Cape Fear region based on surveys for the NaturalHeritage Program. The State Ports Authority property on the west bank of the Cape FearRiver is outlined in red.


This map from the North Carolina Natural Heritage Program shows sites of National,State, and regional significance in eastern Brunswick County:

2. Bald Head Island 3. Battery Island 8. Blue Pond9. Boiling Spring Lakes Limesink Complex10. Boiling Spring Lakes Wetlands Complex 15. Clarendon Plantation Limesinks18. Fort Caswell Dunes and Marshes19. Funston Bays22 Hog Branch Ponds.26. Lower Cape Fear Bird Nesting Islands27. MOTSU Governor’s Creek Natural Area28. MOTSU Northwest Natural Area29. MOTSU Three Ponds Natural Area32. Orton Pond33. Pleasant Oaks/Goose Landing Plantation34. Pretty Pond Limesinks Complex42 Southport Ferry Landing Forest48. Town Creek Marshes and Swamp54. White Springs Pond Complex56. Middle Island57. Zeke’s Island60. Bluff Island and East Beach63. Lower Cape Fear Aquatic Habitat

Ports Authority Property

Note: MOTSU is the Military Ocean Terminal atSunny Point. Natural Heritage Sites numbered 27,28, and 29 are within the Sunny Point property.

The Boiling Spring Lakes wetlands complex (10) isa favored habitat of the red-cockaded woodpecker,an endangered species, although the bird can beseen over a larger area.

The State Ports Authority property, while not a significant example of a particularnatural community, lies in the heart of a diverse ecosystem supporting unique plants andanimals, and a particularly prolific avian population. Its value is its accessibility, its variedterrain, and its utility for display of nature’s variety for enjoyment by the people of NorthCarolina and our guests.


The Proposed Park

The proposed Cape Fear State Park would be an active facility, designed toaccommodate visitors and provide educational opportunities. It would have these elements:

Botanic Park and Arboretum. The State park system does not have a botanic garden orarboretum. The North Carolina Botanic Garden at Chapel Hill is part of the University ofNorth Carolina. There are other smaller botanical gardens, but all are privately funded. Thenearest is in Fayetteville, but that is only 79 acres.

There are arboreta in the State, some private and some established as part of countygovernment facilities, but all are small except the North Carolina Arboretum near Asheville. That is privately funded, and focuses on the trees of the mountains.

The botanic park at the Cape Fear would not beintended to showcase ornamentals, as does Airlie Gardens inWilmington. The collection would be devoted to NorthCarolina’s native trees and plants, focusing on uniquevarieties, such as live oak and the various carnivorous plantsendemic to the region. The Venus fly-trap, which growsnowhere else, would be featured.

Many of the necessary varieties are on the site; others would have to be planted andactively cultivated. The varied terrain, which includes high ground and salt and fresh-watermarshland, would provide suitable environments for every species of interest. It is thisvariety of terrain and wildlife habitat that would set this park apart from other botanic gardens.

Pathways, including paved paths for the handicapped, would be provided.

Bird Sanctuary. There are State reserves designated as birdsanctuaries, such as those at Battery Island, Lea-HutaffIsland, Pine Island, and Wainright Island, managed byAudubon North Carolina. Those are passive reserves,specific for shore birds. There are not any State-sponsoredaviaries or active bird sanctuaries suitable for tourist visits.

This facility has two advantages as a bird sanctuary:First, the site has a rich variety of bird habitat– woodlands,open fields, salt marsh, fresh-water marsh, and ponds. Shorebirds, waterfowl, and upland inhabiting varieties can find homes. Second, the site is proximateto the bird sanctuary at Battery Island, an important heronry and the annual nesting ground for12 to 15 per cent of the State’s population of white ibis, the State natural areas across the CapeFear River, the spoil islands in the river that have become important habitat of wading birds,and many designated natural heritage areas in the immediate vicinity.


The botanic park and the bird sanctuary would be the same. The same trails and pathswould permit viewing the birds and their habitat.

Bird Rehabilitation Center Injured birds, especiallythe larger birds and shore birds are frequentlyencountered in coastal areas. The State does not operatea facility for care and rehabilitation of injured birds. There are many such facilities throughout the State, butall are private, and all are small. The facility for theCape Fear region, the Seabiscuit Wildlife Refuge, is in aprivate home on Oak Island.

The bird rehabilitation center would be funded andoperated by a non-profit organization. Collaborationwith the veterinary school at NC State University and thepre-veterinary program at UNC-Wilmington would besought.

Those birds unable to return to the wild would This Great Horned Owl was foundbe provided homes in viewing areas–those would be shot, and rehabilitated and releasedthe only captives. by the Seabiscuit Wildlife Refuge

Camping. The only State-provided camping facilities in the Cape Fear region are at CarolinaBeach State Park, across the Cape Fear River and accessible only by ferry or by bridge about20 miles upriver at Wilmington. The 600 acres of the Ports Authority property include high,open areas and wooded areas suitable for tent and RV campgrounds, which would supporttourism in the Southport-Oak Island area as well as the State Park itself.

Amphitheater. The only large outdoor theater and concert facility in Brunswick County is inthe gated community of St. James, available only to residents. The high ground in the westernpart of the 600-acre site would afford ample space for a large amphitheater, whether withseating or simply a grassy slope. Inasmuch as events would take place in the evening, parkingareas would serve both daytime visitor facilities and the amphitheater.


The Economic Impacts of Parks

While our parks, national, state, and local, are treasured for their own sake–naturalfeatures preserved, wildlife nurtured, rest and recreation provided, the economic effects arevery substantial. On a national basis, parks return ten dollars in economic benefits for everydollar spent on the park system. A study done by Michigan State University for the NationalPark Service in 2011 showed that national parks generated $30.1 billion in economic activityand supported 252,000 jobs. More than one-third of those billions, $13 billion, went intocommunities within 60 miles of a park. The “gateway” communities nearest the parksinevitably prosper, from parks payroll and local purchases, but more importantly, from touristdollars spent on lodging, food, fuel and also on collateral activities–other attractions,entertainment, and retail.

At the State level, we see similar impacts. The Governor, in a proclamation for May 2-12 as Tourism Week, identified tourism as “vital to the economic stability and growth of theState.”

North Carolina is the sixth-most visited state in the country. The U.S. TravelAssociation reported that visitors spent $19.4 billion in the State in 2012. While the State’sattractiveness to visitors is based on many things, the State parks are a significant element oftourist draw. A study done in 2008 by North Carolina State University attributed $289 millionin sales to visitors to our State parks, approximately ten times the Division of Parks andRecreation annual budget. This is the same 10-to-1 ratio of benefits to costs as occurs withNational Parks.

In Brunswick County, tourism is the lifeblood of the economy. The State Departmentof Commerce reported that over $300 million were spent by visitors to Brunswick County in2012–the tenth-highest amount in the State.

The Department also reported that Brunswick County’s seasonal population is 2.6 timesthe permanent population– adding 180,000 vacationers seeking things to do and places to see.

We cannot report the contribution of the State parks to the economy of BrunswickCounty, however. There are not any State parks in Brunswick County. The only parts of theState park system in Brunswick County are the natural areas on the other side of the Cape FearRiver, inaccessible by land.


The Ports Authority Property

This excerpt from the US Geodetic Survey map shows the contours of the property in2005 and the border with the Brunswick Nuclear Plant. (The property currently owned by theState Ports Authority now includes the missing triangular segment at the northeast corner.)

Beginning on the western side, the site comprises unremarkable (albeit relativelyunmolested) hardwood and pine forest and fields at an elevation of 20-25 feet above mean sealevel. As one moves east, the elevation gradually reduces and a richer variety of terrainappears. The US Fish and Wildlife Service National Wetland Inventory shows substantial areasof freshwater wetlands, and then a very substantial area of estuarine and marine wetlands (mapon following page). Precise measurements of the wetland area are not available; the BrunswickCounty tax assessor shows almost 170 acres of wetlands and marsh.


The salt marsh at the eastern side is part of the larger Walden Creek estuary to theimmediate north, designated by the North Carolina Department of Environment and Natural Resources as a “Primary Nursery Area.” Salt marsh is regarded as one of the mostbiologically productive habitats in nature. The dark green area is tidal fresh-water marsh,higher in plant diversity than salt marsh, and home for rare plants and animals.

Among the ponds on the site are four that have been identified as among few remaining“coastal plain ponds” by the North Carolina Natural Heritage Program.

These wetlands and other wetlands along the Cape Fear River support a variety of avianlife. The US Fish and Wildlife Service names these groups “(1) waders, (2) shallow-probingand surface searching shorebirds such as sandpipers, plovers, knots and oystercatchers, (3)deep-probing shorebirds, such as godwits, willets, and curlews, (4) serial searching birds suchas terns, gulls, skimmers, pelicans and kingfishers, (5) floating and diving birds such as ducks,grebes, loons, cormorants and swans, and birds-of-prey such as osprey, hawks, eagles andowls.” The waders include great white egrets, great blue herons, snowy egrets, and whiteibis, all spectacular birds.


This is an excerpt from the nautical chart for the Cape Fear River:

Depths shown are in feet. Snows Marsh is owned by Duke Energy and is inaccessible, andconsequently unmolested. That and the small islands are important bird habitat.


Surrounding Uses

This aerial photo showsthe State Ports Authority site(yellow) relative to neighboringuses.

Although first glance isfrightening–a very largeammunition depot and a nuclearplant–these uses requireextensive buffer areas that areundisturbed wildlife habitat.

The area outlined in red isthe Military Ocean Terminal atSunny Point, a marine terminalused almost entirely forammunition shipments. Theterminal property itself is about8500 acres, with facilities well-disbursed and the remainingareas retained in the natural state. The red shaded area is a bufferzone, also maintained in thenatural state with only daytimeactivities permitted.

The buffer zone extendsacross the Cape Fear River. Partof Carolina Beach State Park iswithin the buffer zone.

The Sunny Point propertyincludes three designated Natural Heritage Areas, which are actively maintained by a staffbiologist. This includes periodic burning to support the long-leaf pine forests, a preferredhabitat of the red-cockaded woodpecker, the area’s favorite endangered species. There are 26rare species of plants and animals on the site.

In like manner, Duke Energy’s Brunswick Nuclear Plant is concentrated in a small partof the larger property outlined in green. The surrounding buffer area is left in the naturalstate, with security precautions to prevent entry, thus leaving the wildlife and the naturalfeatures unmolested.


The State Parks System

The State Parks System is constantly under pressure to grow, to meet the needs of agrowing population and the increasing urbanization of that population, both of which putgreater stress on existing scenic and recreational resources. The State Parks must also beexpanded to fill gaps in the types of resources preserved and made available, and to fill gaps ingeographic coverage. But funds are scarce.

In its report, New Parks for a New Century, the Division of Parks and Recreationreports that:

The State Parks Act directs the system to include representativeexamples of North Carolina's archaeological, geological, biological, scenic andrecreational resources. Under those categories, specific examples of the state'snatural diversity are considered resource themes, such as mountain bog,spruce-fir forest, tidal wetlands, etc. Of 108 resource themes identified in theState, only 29 are adequately represented in the parks system now. Thirteenresource themes have little representation in any geographic region, and four arenot represented at all.

High-quality examples of the state's great diversity of naturalcommunities are being damaged every day as population growth anddevelopment infringe on important natural areas. Wildlife habitat is becomingfurther fragmented and many species of plants and animals are dwindling innumber.

Despite this mandate, it has been four years since the last new park was added to theState Parks System–Grandfather Mountain. The Division of Parks and Recreation currentlyhas eight sites under consideration for new parks, including the Lower Cape Fear, along withone site for a recreation area and 35 sites for natural areas. All are competing for scarcefunds.

White Ibis at the Cape Fear


Criteria for New Parks

The Division of Parks and Recreation has criteria to evaluate potential new park units,and a scoring system to remove unsuitable sites from consideration and rank the qualifyingsites.

The first test comprises four minimum criteria. Sites that do not meet these basicrequirements are removed from consideration. The criteria are presented below, withcomments about the suitability of the Ports Authority site:

Statewide significance of resource themes represented. The site has thesefeatures listed in the 2009 Outdoor Recreation Plan as significant tidewaterthemes with little or no representation in the State park system:

Scenic: rivers, meadows/grasslands, bays/estuaries.Biological: riverine aquatic communities.

In addition, the site provides these scenic themes with only moderate representation inthe system: scenic vistas, forests, and marshes. Biological themes at the site with onlymoderate representation in the State park system include maritime upland forests, drylongleaf pine communities, and freshwater tidal wetlands.

Size–sufficient acreage to protect principal resources and provide appropriatefacilities with minimal impacts on those resources. The 600-acre PortsAuthority site has substantial upland acreage, previously cleared for farming,that can be improved for parking, camping, exhibits, greenhouses, aviaries andother facilities with minimal loss of habitat and no loss of natural communitiessought to be protected.

Absence of incompatible features such as roads, intrusive development,incompatible vistas and air, water and noise pollution. A residential lanepasses south of the site to several private homes. On the west side of the site,the Brunswick Nuclear Plant is visible in the distance; it is quiet and does notpollute. To the south is a citric acid plant separated by a buffer area; that issimilarly benign, although this side would benefit from a line of trees. (We notethat the Brunswick Nuclear Plant was put on line in 1972; although the licensehas been renewed to 2035, many plants of this generation have already beendecommissioned. Likewise, the citric acid plant was built in 1970; it’s usefullife is not known.) Due east lies a tributary of the Cape Fear River; theshipping channel is invisible behind Snow’s Marsh, an island. The vista towardthe river is one of undisturbed natural beauty.


View from Ports Authority property looking east toward the Cape Fear River

Sufficient access for management and public use. An extension of Southport’sEast Moore Street ends on the site, about two miles from the City. NCDOT iscurrently planning a bypass to permit direct access to the area from NC87.

If a site meets these basic requirements, then scores are assigned for each of thesecriteria:

Number of high priority resource themes represented. This site has two suchhigh-priority themes: salt marsh and tidal fresh-water marsh. A survey maydetermine that the hardwood and pine forests are also valuable naturalcommunities. More important are the special animal habitats: osprey nestingareas, wading bird and shorebird foraging areas, and wading bird rookeries.

Rarity of themes. Both salt marsh and tidal freshwater marsh are rapidlydisappearing in the path of coastal development all along the coast. Overall threat to themes. Coastal development continues unrelentingly. Justone mile south of the site, the Southport Ferry Landing Forest, a NaturalHeritage Area with good examples of coastal fringe evergreen forest, coastalfringe sandhill, and brackish marsh natural communities, is destined forresidential and commercial development.

Degree of threat to resources/urgency of acquisition. This site is surplus to theneeds of the State Ports Authority, the State Ports Authority needs new capital,and the site is zoned for industry.


Presence of rare and/or endangered species. The site is known habitat for theAmerican alligator and the red-cockaded woodpecker, both endangered. Thesite has not been surveyed, but the natural heritage areas to the immediate northsupport 26 species of rare plants and animals, including the Carolina gopherfrog, the Cape Fear threetooth, pondspice, rough-leaf loosestrife, and loosewatermilfoil.

Interconnection with other protected areas. The State Ports authority propertyis a vital link in a chain of areas protected by State and Federal reservations andprivate conservation easements along both sides of the Cape Fear River. Forland animals, the connection is interrupted by fence and water barriers, butbirds and marine animals freely forage along the river and the shore areas.

Quality of resources and/or presence of a superlative (biggest, best example.unique, etc.). The superlative must be created. The appeal of this site is itssuitability for a facility not now existing in the State parks system–a combinationcomprehensive botanic garden and bird sanctuary serving the needs of thepeople as well as the plants and animals.

Regional demand for parks system units staffed and open to the public. Thepopulation of Brunswick County swells by 180,000 vacationers in-season,people coming for the beaches, golf, and whatever other recreational facilitiesare available. This park would be a fine complement to those traditionalactivities, providing an interesting and educational experience available nowhereelse. Brunswick County does not have a State park, and the nearest Staterecreational facilities and State campgrounds are across the Cape Fear River.

Suitability for providing high quality recreation. The 2009 Outdoor RecreationPlan sets out these strategic directions for the State park system;

#1 Continue expansion of the state parks system,#2 Providing the best possible visitor experience,#3 Increase efficiency and reduce costs,#4 Support local economic development.

This project supports all four strategic directions: (1) the addition of a park where noneexists, in an area that is underserved, (2) the concept of an active park, with the abilityto immerse visitors in normally inaccessible natural situations, (3) the adoption of a sitealready in the State inventory, and (4) a function enhancing and complementing thetourist and vacation-based economic values of Brunswick County.


In addition to the scoring system based on the above criteria, the Parks and RecreationDepartment sets priorities based on practical criteria, such as:

Availability of funding through the principal conservation trust funds of theState or in partnership with local or statewide land trust organizations.

The potential of the site to qualify for special funding such as Federal Land andWater Conservation grants or wetlands mitigation programs.

The willingness of property owners to negotiate for sale. In most cases, it isunknown whether sites might be available for acquisition.

Local support for a state parks system unit.

The appearance of an imminent threat to preservation such as impendingdevelopment.

Further site research that identifies extremely rare or additional resourcethemes.

[Note: These criteria will be examined in connection with review of this proposal by cognizantauthorities and interested parties, and examination of the site in greater detail.]


Implementation

The State parks system looks to several trust funds to meet needs for land acquisitionand capital projects: the Parks and Recreation Trust Fund, established in 1994 and supportedby a portion of the state’s tax on real estate deed transfers, the Clean Water Management TrustFund and the Natural Heritage Trust Fund. The combined proceeds from these funds stillleave a substantial gap between planned projects and available funds.

This plan contemplates implementation without competing with other projects for thoseparks system trust funds. The basis of this plan is that the property proposed to be devoted tothe Cape Fear State Park is already in the State’s inventory, although in another agency.

The plan for the Cape Fear State Parks would be completed by a public-privatepartnership for the Cape Fear State Park. This how it would work:

! The property proposed for the new State Park is owned by the State Ports Authority inits own name. The property is on the Ports Authority’s balance sheet at $30 million,substantially more than the market value. The State Ports Authority does not haveplans for use of the property.

! The State Ports Authority is facing substantial needs for capital infusions from the Stateto meet its debt service requirements and to make capital improvements to respond tochanging markets and the needs of the State’s business, particularly agribusiness. TheGeneral Assembly has in the past provided capital grants to the Ports Authority. Suchgrants are again necessary, but recent efforts to obtain funds have been receivedwithout enthusiasm.

! Instead of seeking grants in the nature of subsidy from the General Assembly, this planproposes that the State Ports Authority convey the property discussed herein to theState, so that the State realizes value for the grants. The property would be designatedto the NCDENR Division of Parks and Recreation for the Cape Fear State Park. Payments would be appropriated by the General Assembly from year to year ininstalments, as the needs of the Ports Authority are expected to arise. These areappropriations the General Assembly would be compelled to make anyway, to preservethe viability of the State’s ports.

! Funds for the improvements to turn the property into a functioning park would besought from government agencies traditionally supporting such projects, such privatefoundations with an interest in the success of this project, in particular the Duke EnergyFoundation, which makes grants for environmental projects in communities proximateto its facilities, and global and regional foundations already invested in the area andinterested in preserving the environmental value of those investments. The location ofthe park site on an estuary expands the range of available Federal resources.


Ownership of the Property

In 2006, the North Carolina State Ports Authority, a semi-autonomous component ofthe North Carolina Department of Transportation, purchased the 600-acre undeveloped tract onthe western shore of the Cape Fear River near Southport, intending to create a new port, avery large marine container terminal. The purchase price was $30 million. All of that wasborrowed using bank credit lines.

In the next six years, the Ports Authority spent approximately $7 million on engineeringand economic studies, and the Department of Transportation spent another $2 million. ThePorts Authority studies showed that the cost of the container terminal project would be inexcess of $4.4 billion. The NCDOT study produced even higher estimates, and suggested thatthe resources of the State would be better used to develop the existing ports at Wilmington andMorehead City to serve the needs of the eastern North Carolina region. The container terminalproject has been put aside, and the State Ports Authority is now focusing on projects to benefitmarkets that have recently emerged, as well as its traditional services.

The 600-acres in Southport remainsin the property inventory of the State PortsAuthority. In accordance with the lawgoverning the State Ports Authority, theproperty is titled in the name of the NorthCarolina State Ports Authority, not theState itself.

The State Ports Authority does notpay taxes and the maintenance cost of theproperty is insignificant, but the $30million investment represents a lostopportunity cost of approximately $1.35million per year–the approximate amount ofannual interest on the debt it represents. And that $30 million is not now availablefor capital projects that would benefit thebusinesses in the State using the ports forexports and imports.


State Ports Authority Debt

The purchase of the 600-acre property, the related studies and interest cost, and otherrecent capital projects, has left the State Ports Authority with a substantial debt burden. Thischart shows the growth in the funded debt of the State Ports Authority since 2005, when thecontract for the purchase of the 600-acre site was signed:

In 2008, the Ports Authority, havingjust taken delivery of four new containercranes, entered into a 15-year finance lease forthe entire purchase price, just over $32million.

In 2009, the State Ports Authorityissued $20 million in bonds to convert part ofits bank debt used to purchase the Southportproperty to “permanent” debt. Then in 2010the Ports Authority issued another $44 millionin bonds to refund the remainder, along withthe cost of the studies, accumulated interest,and other capital projects.

That debt remains outstanding as part of the $95 million in debt owed by the State PortsAuthority as of March 31, 2013.

The most recent balance sheet ofthe Ports Authority shows $30.5 millionin notes owed to banks, and $64.2 millionpayable on long-term bonds maturing atvarious times through 2040. This chartshows the debt service–interest andinstalments of principal– due in the nextdecade.

The amounts of principal andinterest due in each year from 2014through 2022 are approximately $5.9million–the interest component isapproximately $3.8 million. The largepayment due in 2023, $27.3 million,includes the final payment on a lease ofthe container cranes at Wilmington entered into in 2008. Principal amortization is calculatedon the basis of a 30-year term, so the final payment includes substantial unpaid principal.


The debt of the State Ports Authority is not guaranteed by the State, and is notexpressly supported by the full faith and credit of the State. Nevertheless, the North CarolinaState Ports Authority is part of the North Carolina State government, a component of theDepartment of Transportation; default by the State Ports Authority could not realistically becountenanced. Default by a State agency inevitably would affect the credit rating of the State’sbonds. The result would be higher borrowing cost for the State. The State has long-term debtof $8.9 billion, and even a few basis points penalty on the interest rate would be significant.

Although the Ports Authority’s bond ratings do not mention this factor, the bond marketfully expects the State to support the debt of its governmental components.

Ports Authority Capital Needs.

The State Ports Authority has constant need for significant amounts of capital toimprove its facilities to respond to changing markets and to restore aging facilities. The fiscalyear 2013 capital plan includes $15.1 million in capital expenditures. The March 31, 2013,financial statement reports contractual commitments of $6,211,370 for capital projects. ThePorts Authority is currently negotiating a contract for export of wood pellets from the port atMorehead City that will require construction of a facility costing another $15,000,000.

This chart from the fiscal year 2013 financial statement shows the recent history ofcapital expenditures:


Looking to the future, this chart, prepared by Moffatt & Nichol for a report deliveredin October 2012 in anticipation of a bond issue, shows the requirements for capital projectsestimated for each of the next ten years:

The annual expenses for capital projects are uneven, affected by economic conditionsand changing markets. For example, current conditions suggest a shift of container trafficaway from North Carolina’s ports to larger and deeper ports, and expansion of bulk andbreakbulk shipments serving regional needs at the ports of Wilmington and Morehead City. The fiscal year 2013 budget amount of $15 million does, however, represent an average ofboth recent historical and anticipated future annual capital needs.

The annual average of the State Ports Authority’s requirements for debt service andcapital expenditures over the next few years is approximately $21 million. (We note that theballoon payment of $27.3 million due for the crane financing in 2023 conveniently correspondsto a substantial reduction in capital needs anticipated for 2021 and onwards.)


Sources of State Ports Authority Capital Funds

The annual financial statements for the last five fiscal years show the following figures:

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Operating revenues $39,731,000 $34,559,180 $33,317,692 $ 37,318,910 $ 39,553,134Operating expenses 37,673,000 36,646,065 35,403,928 37,058,759 36,068,100 Operating income 2,057,705 (2,086,885) (2,086,236) 260,151 3,485,034

Net income* 469,466 (4,970,717) (6,154,700) (3,879,914) (291,965)

Depreciation 8,481,554 9,078,778 8,851,846 8,847,646 8,216,179Interest expense 2.033,720 2,880,546 3,054,638 4,133,310 3,826,950

EBIDA** $10,984,540 $6,988,607 $5,751,784 $9,101,042 $11,751,164

* Exclusive of grants and State aid.** Earnings before interest, depreciation and amortization

The “operating income” as reported by the State Ports Authority takes into accountdepreciation and amortization, but not interest on debt. It also does not take into accountgrants received from State and Federal governments. The “bottom line” in the PortsAuthority’s income statement is the change in net assets, which includes grants received fromState and Federal governments. The “net income” shown above does not include grants.

“EBIDA,” earnings before interest, depreciation, and amortization, represents theability of the Port Authority to meet its debts when due. Presuming the Ports Authority canmaintain EBIDA in excess of $10 million dollars per year into the future, it can meet itscurrent debt obligations of about $7.4 million annually. There is very little surplus for capitalprojects, however, and inasmuch as depreciation is being used to meet debt obligations, theState Ports Authority is eating its seed corn.

The State Ports Authority is not destitute. The March 31, 2013, statement shows over$26 million in current assets. The Ports Authority cash flow is comfortably in excess of thecovenants in its bond indentures. However, operating income is sufficient to cover interest ondebt in the best years, but not in others.

Using an annual requirement of $21 million for debt service and capital projects, andprojecting EBIDA being maintained at about $10 million annually, we see a shortfall of about$11 million annually. That can be met partially by increasing debt in circumstances in whichcapital investment can clearly be shown to increase income sufficient to recover theinvestment.


Nevertheless, it is clear that the State Ports Authority will require regular infusions offunds from the State of North Carolina General Fund to meets its debt obligations, to keep itsfacilities in good repair, and to meet the needs of new markets. That has been the practice inthe past, from time to time.

In the preceding seven fiscal years, the State Ports Authority received these amounts:

2006 $ 5,964,485* 2007 $11,200,0002008 10,000,0002009 6,734,5912010 191,6472011 422,905*2012 115,541

* Includes Federal grants

All of these grants were for specific capital projects. There were not any operating subsidies.

We must therefore anticipate that the State will be providing many millions of dollars tothe Ports Authority in the foreseeable future. The premise of this proposal for a State park isthat the State and its taxpayers should receive something in return for payments the State willbe making to the Ports Authority anyway. The 600-acre site in Southport, for which the StatePorts Authority has no use, should be transferred to the State for a much-needed park inconsideration of those grants. This exchange should reduce resistance by the GeneralAssembly to resumption of grants. We note that neither the Governor’s budget nor the currentbudget bill before the General Assembly provides funds for the Ports Authority.

This plan would be implemented by an agreement between the North Carolina StatePorts Authority and the North Carolina Department of Environment and Natural ResourcesDivision of Parks and Recreation for the transfer of the property to the Division of Parks andRecreation in consideration of an amount to be agreed, to be payable in instalments, theDivision of Parks and Recreation to be credited for any grants received by the State PortsAuthority from any State source.

The result is that the State would be receiving the land for the park without cost, andthe State Ports Authority would be exchanging the land for much needed capital funds.


Supplementary Funding Sources

The Federal government and the State of North Carolina offer several programs forcost-sharing and assistance for land conservation efforts, supplemented by large privatefoundations. The location of this site in a coastal region and an ecologically significant estuaryopens the doors to specialized programs, such as the Federal Coastal and Estuarine LandConservation Program managed by the National Oceanographic and AtmosphericAdministration.

The State of North Carolina 2007 Coastal and Estuarine Land Conservation Program(CELCP) Plan has combined target areas for conservation identified by the One North CarolinaNaturally program, regional Councils of Government, and The Nature Conservancy’s Mid-Atlantic Coastal Plain Ecoregional Plan in this map of consensus priority project areas:

Cape Fear region


The CELCP plan offers this comment on the target areas:

All of the priority project areas that have been identified are consistent with thenational criteria for project areas. All these areas possess high conservationvalues and suffer from high conversion rates, all areas can be effectivelymanaged (either actively or passively), all areas directly advance the goals andimplementation of the State’s coastal management program and NERRmanagement plan, and all areas are consistent with the State’s approved coastalmanagement program.

There are a number of substantial foundations with a stake in the use of the subjectproperty compatible with their own investments and interests in the area. Duke Energysupports the Duke Energy Foundation, which makes grants for environmental projects incommunities in which it has facilities. Its Brunswick Nuclear Plant property adjoins the site ofthe proposed park. The Nature Conservancy, a global foundation, has purchased and managesseveral large, environmentally sensitive properties in the area, including the Natural HeritageArea around Boiling Spring Lakes that is the habitat of the endangered red-cockadedwoodpecker and of the Venus fly-trap. The North Carolina Coastal Land Trust has a networkof conservation easements in the area, up and down the river. Audubon North Carolina hassubstantial interests in the area, and manages the important white ibis nesting site at BatteryIsland, just downriver. All have interests in the success of this project because industrial useof property (for which it is currently zoned) would damage or destroy a large, complexecosystem that is the foundation of their other investments and holdings and frustrate theirconservation efforts.

The nature of the proposed park and its location suggests that the cost of improvementsmay also be eligible for Federal government grants and could be supplemented by private,donated funds. Such improvements would be made as funds become available.

[Note: This topic will be developed in greater detail with a list of applicable programs]


References

Brunswick County Planning and Community Development, Brunswick County Mini Data Book(2012).

Catlin Engineers and Scientists, Phase I Environmental Site Assessment (2005)

Erusha B. Greenwood and Candace G. Vick, Economic Contribution of Visitors to SelectedNorth Carolina State Parks (2008).

Richard J. Leblond, Inventory of the Natural Areas and Rare Species of Brunswick County,North Carolina (1995)

Michael A. Mallin, Potential Environmental Problems from Building the Proposed NorthCarolina International Terminal (2011)

North Carolina Department of Environment and Natural Resources, Division of Parks andRecreation, New Parks for a New Century

North Carolina Department of Environment and Natural Resources, Division of Parks andRecreation, North Carolina Outdoor Recreation Plan 2009 - 2013 (2008)

Office of the State Auditor, North Carolina State Ports Authority Financial Statement AuditReports (for the years ended June 30, 2008, 2009, 2010, 2011, 2012)

Kelly Price and Tancred Miller, State of North Carolina 2007 Coastal and Estuarine LandConservation Program (CELCP) Plan (2007)

Daniel J. Stynes, Economic Benefits to Local Communities from National Park Visitation andPayroll, 2009 (2011)


Documents

Cape Fear State Botanic Park and Bird Sanctuarysavethecape.org/stcwp1/wp-content/uploads/PDFs/StateParkProspectus...Cape Fear State Botanic Park and ... providing places to see to