The pandemic-resulting slowing demand for office space is prompting one real estate developer in Claymont to prioritize building new housing while another pandemic-accentuated trend – the decline of brick-and-mortar retail – has another developer optimistic about transforming the shuttered Tri-State Mall into an ecommerce warehouse site.
Each project is significant on its own. Taken together, they promise a major transformation of a community – more specifically, north Claymont – defined for nearly a century by the Worth Steel Company and its successors.
The residential piece isn’t brand new. It’s part of a massive redevelopment called First State Crossing of the former steel mill property proposed two years ago by St. Louis-based Commercial Development Company (CDC). But market trends – continuing uncertainty over office-space needs and strong interest in housing – has prompted CDC to move forward now with a plan for 926 apartments and townhouses east of the Amtrak rail line and overlooking the Delaware River.
“More people are working from home. Businesses looking for office space have pulled back…. There’s a lot going on in the office market, but it’s not sorted out,” says Steven Collins, CDC executive vice president.
“The residential market for townhouses and apartments is extremely hot,” Collins adds, citing the popularity of the Darley Green community, less than a mile to the south at the intersection of Philadelphia Pike and Darley Road.
Enhancing the potential appeal of the proposed townhouses and apartments is a plan for a riverfront park and marina developed by a University of Delaware teamand promoted by the Claymont Renaissance Development Corporation.
While moving ahead with the housing proposal – preliminary plans were filed with New Castle County’s Department of Land Use last month – CDC has put on hold construction of a pair of office buildings next to the new Claymont train station, which is also under construction, with estimated completion in early 2023. “We’re not going to build on speculation,” Collins says. After CDC finds a tenant, it will build to suit its needs, he says.
Meanwhile, to the west, on Naamans Road and alongside Interstate 95, developer KPR Properties has filed plans with the county to replace Tri-State Mall with a 525,000-square-foot ecommerce logistics center while building a smaller retail space – about 15,000 square feet – fronting Naamans Road in the southeast corner of the 40-acre site.
Because the current zoning of the property would permit its use for a warehousing operation, the plan will require only approvals by the county’s Board of Adjustment, a process that usually takes less time than a rezoning, according to county Land Use officials.
Mike Hoffman, KPR’s land use attorney, hopes that approvals can be granted by late spring or early summer. With construction time estimated at about a year, the warehouse center could be ready to open in late 2023, he says.
While these projects work their way through the county’s Land Use approval process, there’s plenty of construction activity along Philadelphia Pike in the area between Interstate 495 and the Pennsylvania state line.
Looking toward the river, the brick exteriors of the new train station and a 464-space multilevel parking garage are the only breaks above the horizon. Between the highway and the Claymont Transit Center, work continues on a new roadway and a widened interchange to handle increased traffic from Philadelphia Pike to the garage and surface parking lots, according to John Sisson, CEO of the Delaware Transit Corporation.
The new train station, with all its related improvements, is a $75 million project, Sisson says. Coordinating work with Amtrak and some unexpected issues with stormwater management have stretched out the timeline by about a year. Sisson says the new station should be ready for use in the summer of 2023.
Riverview residential
With more than 900 units, Collins believes that the proposed residential community “will be the largest waterfront residential development in the greater Philadelphia market.”
Just a short walk from the train station, with easy access to both I-95 and I-495, riverfront views, a network of walking trails for recreation and possibly looking out onto a new park, Riverview at First State Crossing should be an attractive option not only for area workers but also for those who commute to Philadelphia, Collins says.
"We want a great-looking product and being on the waterfront, it's just different."Rockwell Development Group president Greg Lingo
“It’s like undeveloped country when you tap into the Philadelphia market,” says Brett Saddler, executive director of the Claymont Renaissance Development Corporation, who views the community as a catalyst for attracting “better quality retail” to the area as well.
Assuming the rezoning is approved, the soonest construction could begin would be early 2023 and it will then take eight to 10 years to build out the community, says Greg Lingo, president of Rockwell Development Group of Media, Pa., one of two developers working with CDC on the residential plan. The other is Joseph Setting II of Setting Properties Inc. in Greenville.
It is too soon to estimate the selling prices of the townhouses or the rental rates for the apartments, Lingo says.
He says that he and Setting will identify contractors to build much of the community, and Rockwell and Setting Properties will also have a hand in construction. With multiple builders, there will be a variety of housing styles, avoiding the cookie-cutter look of some large subdivisions, he says.
“We want a great-looking product,” he says, “and being on the waterfront – it’s just different.”
The rest of First State Crossing
As originally envisioned, the 420-acre First State Crossing would include office buildings, retail, a hotel and some light industrial uses, with some warehouse operations as part of the industrial sites.
While most of the residential segment would be located between the Amtrak line and the river, the first planned office buildings would be between Philadelphia Pike and the rail line, along the new road leading to the transit center. CDC had prioritized this portion of the plan when it outlined the project two years ago, but that was before the COVID-19 pandemic sent office workers home and prompted businesses to reevaluate their space needs.
Just to the north of the proposed office buildings, wedged between Philadelphia Pike and the Amtrak line, is a parcel First State Crossing has wants rezoned for mixed-use development. The plan calls for retail along Philadelphia Pike, three office buildings and, near the train tracks, about 300 apartment units.
CDC has not submitted subdivision plans to the county for the areas that it plans to redevelop on the west side of Philadelphia Pike. According to CDC’s master plan, this area, bordered roughly by Naamans Road on the north, I-95 and I-495 on the west and the Knollwood neighborhood on the south, would be developed primarily for light industrial uses, including warehouses. The plan envisions some retail along Naamans Road, opposite the entrance to Tri-State Mall, and two sets of offices, one on Naamans Road alongside the interstate highways and the other on Philadelphia Pike adjacent to the entrance to Knollwood.
CDC does not have a timeline for developing these segments of the project. The current focus will be on the parcels on the east side of Philadelphia Pike – the residential, the two office buildings and the mixed-use development – that are now going through the Land Use review process, Collins says.
The Tri-State Mall makeover
New York-based KPR Properties, although best known for redeveloping retail sites, has determined that the best use for the mall site will be as a warehousing center, with a portion of the property set aside for retail use.
“In real estate, especially with logistics and warehousing, it’s location, location, location, and it’s right next to I-95, close to the [Philadelphia] airport, the port [of Wilmington] and the river,” says Mike Hoffman, KPR’s local land use attorney.
Some Claymont-area residents have expressed a preference for retail on the site. “Everybody wants a Sam’s Club, or a Chick-fil-A, or a King of Prussia Mall, but we know where retail is today,” Saddler says.
The mall, built in 1967 by the former Wilmington Dry Goods, had been in decline for more than a decade, with various budget-oriented anchor stores like Value City and Kmart shutting down as their fortunes declined. The last anchor, Burlington, departed in 2017, moving to a location on Concord Pike.
All that’s left of the mall is a retail strip on its lower level with a liquor store, a laundromat, a nail salon, a couple of clothing stores and a pawn shop.
Hoffman says some of those businesses may be able to relocate into the new retail area, which will be positioned close to where the recently razed Levitz Furniture building once stood.
Access to the warehouse area will be through the existing traffic signal on Naamans Road, while access to the retail area will be through the current entrance to the lower level, just east of the traffic light, Hoffman says.
Two rows of trees and shrubs will wrap around the east, south and west boundaries of the site, effectively shielding the warehouse are from the view of passing motorists, he says.
Although Delaware, and New Castle County in particular, has experienced a surge in warehouse construction, developers are not concerned about oversaturating the market. Representatives of CDC and KPR both said that they view the other’s plans as complementary, not competitive.
“It’s like the way gas stations used to like being located on opposite corners,” Collins says.
They also minimized concerns about increased traffic, saying that warehouse sites typically have their greatest activity in the evening or early morning, not during commuter rush hours.
"Five years ago, we had a derelict shopping mall which was an eyesore and a decommissioned steel mill. When you look at where we were, it's real exciting to have all these plans in front of us."Richard Hall, New Castle County Land Use Dept.
Richard Hall, general manager of the county’s Land Use Department, says the county’s location in the densely populated northeast corridor makes it a desirable location for warehouses, and the merge of I-95 and I-495 makes Claymont especially attractive. “If there wasn’t a demand, people wouldn’t be spending their money to build them,” he says.
While the thought of an extra-large warehouse might not please Claymont residents who had hoped for a retail revival at the mall, the current burst of planning is cause for optimism in the community and at the county level.
"The redevelopment of Claymont Steel and the former Tri-State Mall will bring jobs, new residents, a first-class train station, and an amazing Delaware Riverfront park to North Wilmington,” Saddler says. “How could we not be excited about that?"
“Five years ago, we had a derelict shopping mall which was an eyesore and a decommissioned steel mill…. When you look at where we were, it’s real exciting to have all these plans in front of us,” Hall says. “This is a pretty good thing. Now we have to do it right.”
