In a marked contrast to the grim state budget news coming out of Dover, a panel comprised of members of the development community offered an upbeat outlook for 2017 in northern Delaware.
On the minus side, the county’s Unified Development Code and traffic studies lead to even popular projects moving through a snail-like approval process, panelists noted.
The observations were similar to those voiced at an Urban Land Institute event earlier this year.
The northern Delaware event was sponsored by Bisnow, a digital media and special events company that focuses on the real estate industry.
An ‘exciting time’
“It’s an exciting time,” said Buccini/Pollin Co-President Chris Buccini, who pointed to the growing number of mixed-use multi-family projects that are pedestrian friendly and combine retail, offices and service businesses.
Buccini said a boom in the reuse of sites has gone largely unreported in Delaware, despite evidence in the form of new construction and renovation work.
At times, buildings cannot be saved (one example being the Rockford Falls Bancroft Mills project) which fell victim to a fire.
In addition to Buccini/Pollin many downtown projects, the company is redeveloping the Concord Plaza office complex in north Wilmington into a mixed-use project with apartments.
Two-year gauntlet
Much of the discussion centered on the typical two-year time frame for most projects.
Panelists said one barrier to a full-scale boom is the lengthy approval process that involves New Castle County’s Unified Development Code and the Delaware Department of Transportation.
Hughlett Kirby, vice president of Cinnaire Corporation, said another barrier are impact fees that raise the price of affordable housing the county needs in attracting workers.
The fees do not mean much to a luxury property, but can add thousands of dollars to the price of apartments and other housing, she said. Cinnaire arranges financing for community development projects.
“We’re fighting an uphill battle every day on every project,” said Robert Wittig, president of Diamond State Management, Newark. Wittig took pains to praise DelDOT staff for their work but added that they lack the authority and flexibility.
“It’s bred into the culture,” Wittig added.
Delays hit all projects
McConnell added that DelDOT is also mired in a paper-based culture in a world where plans are handled in a digital format and can be reviewed in a matter of weeks.
Panelists said the code has worthy features that encourage projects that combine office, retail and residential development. However, other requirements lead to a lengthy approval process.
Interestingly enough, projects often emerge from the two-year or more gauntlet with the same design as the initial plan, panelists noted. That means the process merely adds to expenses.
Buccini said the delays occurred with the Concord Plaza project, even though the office park had suitable zoning in place.
The downtown Wilmington office market remains in the doldrums, said Paul McConnell, of McConnell-Johnson a large office space landlord in the city.
Companies continue to downsize office space, due to factors ranging from people working remotely to open formats that can pack in more people.
McConnell said the market will see further demolitions for downtown buildings that cannot find tenants.
Buccini was more upbeat and sees potential in start-ups that have come out of McConnell’s 1313 Innovation and The Mill, a start-up space in Buccini/Pollin’s Nemours Building. Buccini also believes the trend toward downsizing may have run its course and has seen some evidence of tenants seeking more space.
At least one start-up has more than 40 employees, Buccini noted. He added that the financial services sector is also doing well, despite recent stories of cutbacks at HSBC and Barclays.
Buccini said the number of financial services companies has risen to 30, a promising development for the future.
Hotels raise all boats
Attitudes are also a factor. Buccini said BPG took heat in developing the Westin next to the Chase Center on the Riverfront and admitted to being angry about the criticism.
In the end, the hotel helped “lifted all boats” in building the hospitality market in downtown.
BPG has two additional riverfront hotels in the work in addition to the owners of the Big Fish Grill and a development firm planning a hotel next to the riverfront restaurant.
