The Atlantic Fields project was rejected by Sussex County Council in a 5-0 vote earlier this year following months of discussion.
Now, Mulberry Knoll Associates has filed a lawsuit in Delaware's Court of Chancery to overturn the decision.
The suit's introductory statement says "Plaintiff Mulberry Knoll Associates, LLC has spent more than two-and-a-half years and over $3.5 million preparing a proposed rezoning for a large, commercial project."
The suit claims the County denial was not justified, focusing on three arguments.
Councilwoman Jane Gruenebaum justified her ‘no’ vote by saying the development had no provisions for mixed use, missing a key requirement for unified development. Mulberry argues county code has no such requirement.
"No one prior to that – not the Sussex County Department of Planning, not state agencies conducting reviews of the proposal, not the Planning & Zoning Commission, and not even any County Council member during the public hearing which preceded its vote – questioned or suggested that the proposed rezoning was fatally flawed for lack of a residential component." Mulberry said in the suit.
Mulberry also says it would have been required to invest between $6 and $7 million into roadway improvements to address traffic concerns.
The most prominent argument against the development was concern that local roadways cannot handle the influx of new traffic, a frustration that Sussex officials have often pinned on DelDOT’s lack of investment in the area.
"Council wrongfully rejected the rezoning proposal because, it now claims, the traffic improvement schedule called for in the TID Agreement (to which the County is a party) is unacceptable." Mulberry said in the suit.
The 696,000 square foot project’s promised Costco location would be the only one in the region -and combined with Delaware’s lack of a sales tax - was expected to attract in-and-out of state traffic to already clogged roadways.
The suit also argues the county’s land-use map has designated the parcel as commercial-use since 2018, and notes that The Office of State Planning Coordination said they had "no objections" after reviewing the application.
The developer envisioned a 695,000 square foot project with a Costco, Target and other retail outlets.
