Commercial projects downstate range from hotels to a tech park
During the next 18 months, shops, hotels, restaurants, apartments and a technology park will be the outgrowth of commercial development in Delaware towns from Newark to Seaford.
When the City of Dover received a Downtown Development District designation grant totaling $165,000, Bill Neaton said it generated a flurry of activity.
“We have a minimum of six small projects, most of them overhauls of existing properties,” said Neaton, economic development director for the City of Dover.
Central Delaware Habitat for Humanity will receive a grant of $75,150 to build five new homes on South Kirkwood Street, and commercial real estate company G & J Holdings, LLC, will receive $88,918 to invest in a number of properties on South State and West Loockerman Streets.
For more than eight years, the Downtown Dover Partnership has worked to promote and market the district by offering a number of incentives and economic restructuring that will invigorate the local economy by leveraging its diverse customer base, old city architecture and position as the state’s capital.
While the DDD designation may be making headlines of Dover’s historic district, Neaton said city officials are also encouraged by a number of economic development projects around the city, including the construction of the 389-acre Garrison Oak Technology Park on White Oak Road, east of Delaware Rt. 1, as well as a number of empty retail buildings on Route 13 slated for overhaul and new tenants.
“We should be finished with all infrastructure by this summer, including road, water, sewer, storm water and electric,” said Neaton, referring to the technology park. “We’re also building a 1.5 million gallon water tower.”
Dover Sun Park, a 10-megawatt solar generation facility, was the first tenant.
Garrison Energy Center, Calpine Corporation’s 309-megawatt combined-cycle electric generating facility is scheduled to go into commercial operation June 1, according to Neaton.
German-based flooring company Uzin Utz is constructing a 53,000-square-foot plant that will include a research and development center and an application area for testing and customer training.
“That leaves 12 building sites between 10 and 15 acres each,” said Neaton. The city is looking for high-paying technology-based companies that will increase its tax base.
He added that the city recently approved an offer for another building parcel that will house office and manufacturing facilities for tech firm Advantech.
Along the busy stretch of Route 13, new commercial development is eclipsed by several significant overhauls of long-vacant properties.
The Blue Hen Corporate Center on Bay Road, once home to Bank of America and Aetna Health Insurance, saw occupancy numbers dip to just 10 percent, according to Pettinaro, a real estate development and commercial management company.
The company owns 4.5 million square feet of commercial space in Delaware – 450,000 square feet of it is at the corporate center.
Today, the center boasts a 40 percent occupancy rate, thanks to the arrival of Bayhealth, whose presence helped Pettinaro rebrand the center as a hub space for education and medical technology industries.
“It’s hard to sell that vision to a lot of people,” said Robert Stenta, vice president of commercial real estate. “We were able to show Bayhealth how we can turn an old junky space into a quality space.” That vision resonated with other tenants, including FMC Dialysis and the Delaware Surgery Center, the University of Delaware and state agencies.
The Department of Labor and the Department of Health and Social Services just leased 45,000 square feet of space and will move into the center later this year, according to Stenta.
Route 13 is dotted with longtime properties with retail and restaurant names well known to area residents. According to Neaton, several of these sizeable commercial shells will be overhauled for new businesses:
• OfficeMax: Purchased by Produce Junction; Neaton said the new owners have taken possession. The site is undergoing renovations and is slated to open mid-summer.
• Uno Pizzeria and Grill and Dover Litho-Printing Company: Neaton said a pool supply company and Jersey Mike’s Subs will take up space at the two locations.
• Kmart: Closed this winter; Neaton said the building will be divided into two and the parking lot overhauled. One tenant has reportedly signed a lease.
• Metro Shopping Center: Urban Furniture and Airbase Carpet are scheduled to move into space at the shopping center.
Ten years ago, Dennis Silicato purchased 200 acres of land along Route 301 on the west side of Middletown. The years since the purchase have seen an explosion in the once sleepy and rural side of town, now known as Westown — drawing retail, industrial and residential growth aided by developers like Silicato, Joseph Capano and others.
Arguably their biggest coup was the arrival of Amazon fulfillment center, the beacon of Middletown Park, once a 200-acre parcel of land that Silicato scooped up nearly 10 years ago. He said his hopes of bringing an auto mall to Middletown were dashed by the recession, but new retailers are actively inquiring about his remaining 73 acres.
Amazon brought 850 full-time jobs by the end of its first year. The 1.2-million-square-foot facility and its Westown counterparts like Johnson Controls have transformed the landscape, and stores like Walmart, Kohls and Westown Movies are a draw to residents who were forced to travel further north and south for shopping.
Today, Middletown is the destination, according to Middletown Mayor Kenneth Branner, who called its expansion a fulfillment of a vision and a promise from local officials intent on controlling how it grew.
Silicato’s plans for his acreage in Middletown include a Grotto’s Pizza, and a flagship hotel like Hyatt, Holiday Inn or Marriott, he said. Pending final negotiations and planning commission approval, construction on both could begin later this year.
While development in Westown may generate the loudest buzz, Tracy Skrobot, program manager of Middletown Main Street, said downtown projects are keeping pace. Skrobot said the challenge is to balance the development frenzy that flanks the city with a thriving downtown business district attractive to destination shoppers.
“We have a very small amount of real estate to work with — no vacancies, which is a good thing,” said Skrobot.
Rick Clark of Clark Construction has refurbished the old Shone’s Lumber on the southeast corner of West Lake and Wood streets. He’s also built Peachtree Station, a retail center that includes more than 25,000 square feet of retail and office space. A second project includes retail-based Main Street Station on West Main and Peterson streets.
Clark also owns the Delaware Trust Bank at the corner of Main and Broad streets, said Skrobot. Clark will transform the bank into a restaurant this year, ending a nearly decade-long vacancy.
Dennis Silicato has been a developer and commercial property manager for more than 40 years. His name is synonymous with the Home Depot franchise in Delaware, bringing the big box hardware store to their Dover, Middletown, and Lewes locations.
He said he’d love to do the same in Milford. But for now, he’s busy courting a major hotel chain, a bank, and a phone store to property he owns at the prime corner of N.E. 10th Street and Route 1 in Milford.
Already, he’s brought Royal Farms and Grotto Pizza to this “gateway to the beach” property, capturing the business of travelers on this rural stretch to Delaware and Maryland beaches.
“I’m in the process of negotiating a hotel that wants to come in,” said Silicato, who declined to name the chain. “It’s going to be 80 to 120 rooms.”
In the next 12 to 18 months, Silicato said he will sell the prime corner property to a bank, and the two-acre site between Royal Farms and the hotel to a free standing phone distributor.
Silicato said part of his success is a commitment to working with the towns willing to entertain commercial development. He owns several buildings downtown, but said outlying areas of Milford hold potential for growth.
While already in negotiations with hotel chain, Silicato said Bayhealth’s announcement that it will build a new $250 million health campus may pack an economic punch for the City of Milford, which continues to climb in economic and residential growth.
“Some of these small town don’t have a lot to offer other than cooperation,” said Silicato, referring to the tax abatements and incentives offered by Dover and Wilmington – particularly downtown.
“If you have a town that is going to fight you on everything, then you go somewhere else,” he said.
With a Main Street that draws students, families and destination shoppers to its varied lineup of retail and restaurant spaces, City of Newark officials call their 3.8 vacancy rate “amazing.”
“This takes into account spaces that are currently not operating, but are known to be leased,” said Community Affairs Officer Ricky Nietubicz. “It’s particularly amazing that it’s so low, given the thousands of square feet of commercial space added over the past several years.”
Maureen Feeney Roser, director of planning and development, credits the city’s development strategy that encourage mixed-use development downtown, calling it key to the fact they weathered the recession “…with hardly a blip.”
Mixed-use development means most commercial spaces also offer apartments above. Two pending projects include 58 East Main Street, which will offer two restaurants on the first floor and 22 apartments above and 201 East Delaware Street, the site of the old Century Club building. It will house 12 apartments with office space on the first floor. The existing properties at both locations were torn down for new construction.
The Newark Shopping Center, owned by Virginia-based Atlantic Realty Company is also undergoing a $10 million facelift. As part of the renovation, the Blue Hen Lanes Bowling Alley was razed to make room for a luxury apartment complex built by The Bainbridge Companies of Pennsylvania.
The planning commission also approved a plan for 36 apartments on North College Avenue offered by Lang Development Group. That property will offer 5,500 square feet of commercial space.
Seaford Economic Development and IT Manager Tricia Newcomer grew up in Seaford, and remembers when a shift change at the DuPont Plant meant real traffic downtown.
It’s been years since traffic has been an issue, and Seaford, like so many other small towns across America, has struggled against the big box store creep along its borders.
But Newcomer said the city’s designation as a Downtown Development District and the $671,000 grant to the developer of The Residences at River Place has generated fresh enthusiasm for downtown possibilities.
“Since then the interest in downtown has been huge,” said Newcomer, referring to downtown development. “People are picking up the phone and saying, ‘What can I do to make this happen?’
The Residences at River Place was already a planned development at Water and North streets that Newcomer said would include two four-story apartment buildings, a clubhouse, pool, gym, and 12 boat slips on the Nanticoke River.
In 2010, several residents also formed “Seaford Tomorrow” a group focused on downtown revitalization. Seaford has a 25 percent downtown vacancy rate, according to Newcomer. She said the city has decommissioned their power plant and is reviewing options to repurpose that property.
With a downtown population of almost 7,000 and nearly 24,000 for the greater Seaford area, Newcomer said the area is poised for growth. She pointed to a recent community-wide event sponsored by the local Chamber of Commerce and the hospital that drew hundreds of area residents.
“If just one person in that crowd looked at the potential for a business downtown and said, ‘I wonder if I could do something there,’ that would really be something,” said Newcomer.