A proposed one-year moratorium ordinance on distribution center construction is not given much chance of passage by the New Castle County Council.
After all, construction and permanent jobs generated by distribution hubs have been key drivers for the county economy, even if wages on the distribution side are often not at a level that allows for a mortgage or big car payment.
“Spec” construction with no announced tenant has increased due to a nearly zero vacancy rate. But the mere existence of a proposed ordinance covering projects of more than 150,000 square feet is troubling.
We also know that new logistics distribution sites can generate manufacturing employment, as shown by construction of a plant for DuPont Co. south of Newark that kept production jobs from moving elsewhere.
Granted, it is easy to grow concerned when driving around the county and seeing the cranes. Fears of traffic congestion, sprawl, lack of open space and other issues pop up.
The biggest danger is that the ordinance sends the wrong message in a county that has struggled for decades with a “closed for business” image that it is close to overcoming.
With this proposed ordinance, it becomes easier for economic development officials and real estate brokers in the region and elsewhere to argue that previous perception still exists.
Moreover, moratoriums, which are supposed to allow planners and government officials to better deal with growth, rarely, if ever, work as intended. A moratorium, whether proposed or in place, tends to come at the end of an economic cycle when construction and lending slow down.
Instead, during such periods the “closed for business” perception gets a big boost and sends the feared sprawl to areas without such restrictions.
The good news is that thanks to the efforts of the commercial real estate community, the Delaware Prosperity Partnership and government officials, the negative business perception has been vastly reduced.
Still, there is reason for concern that this ordinance is still floating around County Council circles, even if it has no shot at passing.
Enjoy your weekend and catch up on the week’s news in our Saturday week in review. – Doug Rainey, chief content officer