Delaware Public Media

Demolition nears for Boxwood Road auto plant, new space for logistics industry planned

Sep 28, 2018

The former GM Boxwood Road auto plant will soon be nothing but a memory.

Demolition of the plant is set to begin,  almost a decade after it shuttered and a failed attempt by Fisker to revive it and make luxury electric cars. But that demolition also marks the next step in an effort to give the site a new life.

Contributor Jon Hurdle examines what that may look like.

Stan Kaminski proudly remembers the cars he helped to build at Newport’s former General Motors plant, the good pay and benefits, and the lifelong friends he made there during 32 years as an assembly-line worker.

Kaminski, 66, who retired from GM in 2003, doesn’t want to dwell on the plant’s closure in the company’s 2009 bankruptcy, or the imminent demolition of the massive buildings at the Boxwood Road site where he made a living for most of his working life.

But after almost a decade during which the plant has stood empty, and after Fisker’s failed attempt to make luxury cars there, Kaminski accepts that it’s time to find another use for the site that played an important role in Delaware’s economy for more than half a century.

So he’s looking forward to its planned rebirth as a logistics center after contractors start in coming weeks to tear down the old GM buildings to make way for new construction in a $250 million project which will eventually house companies that deliver goods to millions of ecommerce customers.

“At least if they tear it down and they start over with something else, it’s going to provide jobs for a new group of people,” he said.

The site’s developer, Tom Hanna, president of Newport-based Harvey Hanna Associates, says it’s too early to predict how many jobs will be created by tenants of the four buildings that are due to replace the GM plant. But he says there is strong interest from the logistics community in taking space at the site, and he hopes to break ground on the first new building in the spring of 2019.

Hanna argues that Boxwood Road is well-positioned to attract the likes of Amazon, Fedex and UPS because it’s less than two miles from I-95, has a rail link to the soon-to-be upgraded Port of Wilmington, and is located within an eight-hour drive of some 50 million people in the massive Northeast and Mid-Atlantic markets.

“We think it’s a great logistics and fulfillment location,” Hanna said. “If you expand that drive out to 24 hours, you can reach two-thirds of the nation’s population. That’s very attractive to the logistics and fulfillment clientele who more and more are trying to achieve that same-day delivery status.”

He predicted that logistics companies and the shipping lines that supply them will be attracted by increased container capacity at the Port of Wilmington as a result of the recently finalized lease of the port by Gulftainer, one of the world’s biggest port operators, which has promised to invest up to $600 million to expand the port over nine years.

Harvey Hanna bought the Boxwood Road site from Wanxiang America, a Chinese car-parts maker, for an undisclosed sum after Wanxiang acquired it during the Fisker bankruptcy in 2013.

The developer first planned to adapt the plant for manufacturers including automakers, and spent about a year marketing the site to that industry but was unable to generate enough interest in facilities that did not match modern manufacturing needs, and would not do so without prohibitive sums being spent to upgrade the buildings.

Ceiling heights were too low, the interior columns were too close together, much of the equipment had been removed, and what remained was obsolete, Hanna said.

“We just were not successful in securing a manufacturer of any real positive impact economically that found the plant to be of real use,” he said. “That’s why we turned our focus to the logistics and fulfillment industry.”

After GM’s withdrawal and Fisker’s aborted attempt to revive the plant, it looked like the end of the road for manufacturing at Boxwood Road, and perhaps even regionally, Hanna said.

“It is just too expensive to manufacture domestically and if you manufacture domestically, it’s too expensive to manufacture in the northeast,” he said, noting that many remaining U.S.-based manufacturers have moved to the southeast or the southwest.

But logistics, too, has requirements that can’t be matched by the old plant that was built in 1945, and so Hanna concluded that demolition and replacement was the only way to make the site viable.

The massive demolition project, one of Delaware’s largest, is expected to begin in October and will take about a year to remove the existing buildings that cover some 3 million square feet. Some 60,000 tons of steel, plus an unspecified amount of copper, will be recycled; brick and concrete will be crushed and used as a foundation for parking lots, Hanna said.

Meanwhile, the site is undergoing an environmental cleanup of contaminants left over from some 60 years of car making at the plant. The project, led by Delaware’s Department of Natural Resources and Environmental Control, is removing substances including petroleum chemicals, arsenic, chromium and paint residuals.   

Hanna confessed to mixed feelings about razing the plant where his father worked as an engineer, his grandfather had a waste-haulage contract for 25 years, and where his uncle – who is now his business partner – had summer jobs mowing lawns when he was a teenager.

“There’s a sense of sadness that I get when I walk through here and I see it in its current dormant form,” Hanna said while driving a golf cart around the empty 1.1 million square-foot assembly-plant building.

But the sense of loss yields to optimism that the plant will be replaced by buildings that will breathe new life into the local economy, he said.

Douglas Nickel, Delaware Valuation & Advisory Market Leader for Newmark Knight Frank, a global real estate company, said the site looks right for the logistics business, and represents an unusual opportunity in northern Delaware where most industrial land is already developed.

“In the local market it’s hard to find a piece of land where you can build a million square-foot plus distribution facility,” Nickel said. With a vacancy rate of 14 percent, and only 4 percent excluding the Boxwood Road site, the local market is “extremely tight,” he said.

And logistics companies will have access to a work force that can adapt to its needs, Nickel said.

“The demographics of that market are well suited, with skilled labor, middle management and executives,” he said.

Fully occupied, the new site would create some 2,100 permanent jobs in logistics, technology, engineering and related fields, generating annual revenue of $281 million in economic activity and $7.6 million in state personal and business taxes, according to a study for Harvey Hanna by economists at Econsult.

During the anticipated nine-year construction period, the project will create 160 jobs and $6.8 million a year in state tax revenues, the study said.

For Stan Kaminksi, the economic boost would cushion his lingering sadness about the end of a plant that underpinned his own wellbeing and that of a whole community.

“This is where I worked all my life,” he said. “I made some of my best friends here; it’s how I made my livelihood. It’s how I was able to buy my house that I’m sitting in, the cars that I drive, and put my kids through college. To see that go away, it’s hard.”

Despite his sense of loss, Kaminski has chronicled the plant’s demise, taking photos of the last car – a Pontiac Solstice – to come off the assembly line, and writing a book on the factory’s history that is due for completion next spring.

He has taken tours of the vast assembly plant building where he once worked installing “trim” such as seats, carpets and windshields, and has received permission from the developer to photograph the demolition.

The plant now feels like it has died, he said, recalling a recent visit. “It felt lonely, like its life had ended. The roof always leaked and you could hear the water dripping, and it was almost like tears.”

Still, he’s looking forward to the site being put to new use and generating new jobs for the community.

“I don’t think the community wants to sit there forever and look at an empty building,” he said.