At the height of the recession, Middletown was smack dab in the center of a sour economy.
After nearly a decade of explosive growth, development ground to a halt. McMansions, which sprang up the height of the housing boom, fell into foreclosure.
Today, there’s a flurry of activity in the historic town below the Chesapeake and Delaware Canal.
Growth resumes in Middletown after "taking a break"
Middletown Mayor Kenneth Branner reflects on Middletown's expansion.
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“We were taking a break, just resting for a few years and catching our breath,” says Mayor Kenneth Branner Jr. “Now, we’re moving again.”
Indeed. Four major projects are either planned or in progress.
Instead of relocating, Johnson Controls is expanding with a $60-million, 400,000-square-foot facility at Westown Business Park. The project will enable the battery manufacturer to retain 225 employees and create 67 new jobs by June.
Christiana Care Health System is constructing a 36,500-square-foot freestanding 24-hour emergency department at the intersection of Route 299 and Brick Road. About 90 jobs will be added to the payroll, including board-certified doctors and specially trained nurses.
HealthSouth, an Alabama-based rehabilitation hospital company, plans to spend $18.5 million to construct a 34-bed, 64,000-square-foot inpatient center at Route 299 and Gloucester Boulevard. At least 80 employees will be needed to help patients who have suffered strokes or other neurological problems get back to their lives. That number could grow to 200 in several years, the company says.
In December, Amazon.com announced the web-based retailer would build a $90-million, 1 million-square-foot warehouse on Route 301. The facility would employ 849 workers and an additional 2,500 seasonal workers. Hiring starts in July.
“We’re very excited because we think more people will come to the businesses in our town,” says Roxane Ferguson, executive director of the Middletown Area Chamber of Commerce. “The people who work in Middletown will eat in our restaurants and shop at our stores.”
New life for stalled projects?
The locals also are hopeful the new enterprises will spark movement on projects that have been stuck in the bad economy.
One of those is a major housing development at Hyetts Corner.
In 2007, the Wilmington commercial real estate firm Deaton McCue brokered the $2.8 million sale of the site, located at the intersection of Route 1 and Route 13 and occupied by commercial greenhouses. An investment group bought the property with the intention of obtaining permits for 300-plus townhomes and duplexes and then selling it to a developer.
“When you go through the process of obtaining permits required for development, you add significant value to raw land,” says broker Steve Deaton. “It’s been approved for more than a year but there have been no buyers for it.”
That is because there are more homes available in Middletown than there are buyers. There currently are 413 residential properties in foreclosure, or one of every 268 homes, according to RealtyTrac.com, a California-based firm that follows the housing market. That rate is more than double the national average.
Deb Sullivan, a Middletown native and a RE/Max agent, says the home market was hit especially hard because so many buyers came in at the height of the housing boom, then parked two SUVs the driveway and built a pool in the backyard.
“It might have been their first home and it cost $400,000,” she says. “The debt-to-income ratio was simply too high for many people.”
Higher energy costs also are hurting home sales as prospective buyers weigh the cost of commuting to Wilmington or Dover. Large houses translate to bigger utility bills.
“People aren’t looking for 5,000 square feet any more,” Sullivan says. “They don’t want two-story family rooms because they worry about utilities.”
McMansions will not be in reach for most of the new employees at Amazon. The company says more than 700 of the 849 workers will earn $11 an hour.
Still, Sullivan believes new jobs will give both the home buying and rental markets a boost.
“These jobs will help us to sell less expensive homes, which means those owners will be able to move up,” she says.
Deaton says the influx of low-wage jobs won’t make a major impact on spending. But he believes more businesses will continue to locate in the community, raising the level of prosperity.
“You won’t see the explosive growth that Middletown had in the past,” he says. “But you will see extensive growth because Middletown is where the available land is.”
Ready for renewed growth
Mayor Branner notes that Middletown possesses the infrastructure needed to sustain growth, most notably its sewer system and an electric substation. The town processes its own waste water and also sells services to New Castle County.
In February, Delmarva Power announced $31 million in electrical updates to an existing transmission corridor that runs west from the Mount Pleasant Substation, north along the Maryland/Delaware state lines, across the C&D Canal, then on to the Glasgow Substation.
“We like to think of ourselves as the Field of Dreams,” Branner says. “If we built it, if we put the infrastructure in the ground, they will come.”
Main Street makeover
When Middletown was incorporated in 1861, the town council members envisioned a municipality one mile square, known as the Diamond Square in the Diamond State.
Growth resumes in Middletown after "taking a break"
Middletown Historical Society's David Matsen describes how expansion has changed the town.
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David Matsen moved to a house on North Broad Street in 1972, where he enjoyed the niceties of living in a small, pedestrian-friendly town.
“At that time, it was possible to walk to the Acme, to the post office, to the library,” he recalls. “Most children walked to school.”
The town’s borders expanded dramatically in the 1980s and 1990s, when Middletown annexed a number of surrounding farms that were developed for housing. Today, Middletown encompasses 6.4 miles.
As the town expanded, services began to move out of downtown in order to serve developments springing up in the suburbs. The post office moved. The building formerly occupied by the library is now shared by the chamber of commerce and the Middletown Historical Society, where Matsen and his wife Alison are active members.
By 2000, the downtown was withering, with vacant storefronts and little foot traffic.
In response, Middletown became part of the state’s Main Street Delaware program and has made progress in beautifying the district and attracting boutique businesses.
“It’s a very attractive street but still not adequate for daily needs,” Matsen says. “Banks are no longer in walking distance and neither are the supermarkets.”
Growth also brings traffic
Middletown’s recent history is dominated by expansion beyond its core community. In 1990, the population was 3,700, according to the U.S. Census Bureau. In 2000, the count was 6,161. By 2010, the population had more than tripled to 18,871.
Growth resumes in Middletown after "taking a break"
Middletown Historical Society's David Matsen discusses balancing job and infrastructure issues in the town.
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Traffic has grown, too.
“Not enough planning was done with the country and state to alleviate the large traffic jams,” Matsen says. “It’s obvious that new development will bring even more traffic.”
Branner says Middletown has been working with the Delaware Department of Transportation since 2005 to make improvements to Route 299 and that DelDOT has made significant strides in making the 301/896 corridor easier to navigate.
“HealthSouth and Christiana Care will both be on the east side of town, where there is easy access to Route 1, Route 13 and 299,” he says.
Incentives Offered
In addition to enticements from the Delaware Office of Economic Development, the Amazon and Johnson Controls deals were sweetened by 10-year tax abatements from Middletown. Branner says such concessions are part of the price of doing business in a competitive market and will pay off over the long haul.
“If a company comes in and says ‘will you give us a break on taxes?’ and we say ‘no,’ we never hear from that company again,” he says. “We think these projects are great for our community and we could not be happier about it.”
The latest entry to the market is a widely anticipated Chick-fil-A, sited across from Walgreens and Kohls on Route 301.
“We get more questions about Chick-fil-A than any other business,” Branner says. “Well, Chick-fil-A is coming. Middletown has arrived.”