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Cascade: No. 63, Fall 2006

Leaders Look to Market-Rate Housing to Foster Wilmington’s Revitalization

City leaders and developers are hopeful that market-rate housing will revitalize Wilmington, Delaware’s downtown and riverfront areas, revive a sluggish retail sector, and attract young professionals who work in the city’s expanding array of office buildings.

Wilmington, a city of 10.8 square miles with about 73,000 residents, was settled by Swedish, Dutch, and British immigrants and was incorporated in 1739. Located about 25 miles south of Philadelphia, Wilmington became a major shipbuilding center in the Civil War and had thriving steel foundries and chemical industries during World War I. During the past 25 years, the financial services industry has replaced the DuPont Company as the major employer.

City officials estimate that about 1,000 market-rate housing units have been built in Wilmington since 1999 and that private and public investment in the downtown and riverfront totals about $1 billion since the mid-1990s.

The majority of Wilmington’s market-rate housing has been built by the Buccini/Pollin Group, a privately held real-estate acquisition, development, and management company.1 In 1999, Buccini/Pollin converted the Nemours building into offices, retail, and 85 extended-stay units for business travelers. In 2002, it created 278 luxury apartments in the fire-damaged Delaware Trust building, now called The Residences at Rodney Square. According to Buccini/Pollin, apartments in both buildings are about 90 percent leased.

Buccini/Pollin developed Christina Landing, a nine-acre complex on the Christina River that opened late last year with 63 townhouses, 173 apartments in a 23-story tower, a river walk, park, roof-top pool, and parking. A 25-story tower with 180 condominiums is under construction. The development is near Wilmington’s Amtrak station and Interstate 95.

The townhouses sold in less than four weeks for $300,000 to $450,000 and have since risen in value, surprising even some long-term Wilmingtonians. About 52 percent of the 173 apartments are leased, while 88 percent of the condominium units are sold, Buccini/Pollin said.2

Christina Landing opened late last year on Wilmington’s Christina River and includes 63 townhouses and a 23-story apartment tower. Delaware state agencies provided infrastructure improvements for roads and sidewalks and remediation of environmentally contaminated land.Christina Landing opened late last year on Wilmington’s Christina River and includes 63 townhouses and a 23-story apartment tower. Delaware state agencies provided infrastructure improvements for roads and sidewalks and remediation of environmentally contaminated land.

Buccini/Pollin is also developing Justison Landing, a $500 million 10-acre project on previously industrial and vacant land on the Christina River a half-mile from Christina Landing. In the next five years, Justison Landing is planned to have nearly 700 residential units (including townhouses, condominiums, loft units, and apartments), 55,000 square feet of retail space, 300,000 square feet of commercial space, and several parking garages. Construction started in June 2006 on 316 condominiums with expected sale prices of $240,000 to $700,000 and 25 townhouses with expected sale prices of $450,000 to $1.5 million.

In a critical public-sector role, Delaware state agencies provided infrastructure improvements for roads and sidewalks and remediation of industrial wasteland totaling about $50 million at Christina Landing and about $85 million at Justison Landing.

Two key organizations in Wilmington’s revitalization are the Riverfront Development Corporation of Delaware (RDC) and the Wilmington Renaissance Corporation (WRC).3 RDC, established with primary funding from the state and some contributions from the city and New Castle County, has acquired and remediated environmentally contaminated land, made improvements, and sold the land and buildings to developers.

RDC provided site assistance and the city provided financial incentives to ING Bank (which has 850 employees in four buildings), Barclays Bank, and AAA Mid-Atlantic Inc. (which relocated 400 jobs from Philadelphia). RDC also facilitated development of a riverfront market, two restaurants, a river walk, and Chase Center on the Riverfront.

WRC, a privately funded nonprofit, has marketed the city’s downtown and created a subsidiary to oversee the redevelopment of the six-block lower Market Street area, now known as the Ships Tavern district. The district was envisioned as a neighborhood with retail on the ground floor and housing on the upper floors. Development of the district began six years ago and is being done in stages.

In the first phase, known as Ships Tavern Mews, Struever Bros. Eccles & Rouse Inc. of Baltimore used historic preservation tax credits in a $25 million project in the 200 block of North Market Street to develop 86 upper-floor apartments and 30,000 square feet of ground-floor retail space. The apartments are fully occupied and the retail space is one-third to one-half full, according to Carrie E. White, WRC’s managing director. The National Trust for Historic Preservation (NTHP) presented a preservation award to the project’s leaders in the fall of 2005.

In the district’s second phase, Preservation Initiatives of Philadelphia is developing 40 residential units and approximately 15,000 square feet of retail space. Donald Meginley, the company’s president, said that CityScape Capital Group LLC, based in El Segundo, CA, will use both historic and new markets tax credits to provide a major equity infusion in the project.

The city is working with the NTHP to develop a Main Street program that will try to get vacant retail stores occupied and upgrade the level of retail products and services offered. The city is also converting part of Market Street from a pedestrian- only thoroughfare to a twoway street. Meanwhile, Joseph G. DiPinto, a Delaware state representative for the past 19 years, recently became director of the Wilmington Office of Economic Development.

The sense of recent interviews and site visits is that Wilmington now needs to recruit retail businesses and create more entertainment venues for people living in the city’s market-rate housing while also improving housing conditions and creating job opportunities for the city’s low-income residents.4

Wilmington has some advantages compared to other cities as it faces these challenges. It is a city of manageable scale, and there is a wellestablished tradition in which the state, city, and business sectors work together in close partnerships on major development issues.

Key Development Sites and Landmarks in Wilmington's Downtown and Riverfront Area
  • 1 Buccini/Pollin’s primary source of construction financing for its housing developments in Wilmington and other cities has been Bank of America, starting with financing the firm obtained for projects in Boston from Fleet Bank (which was acquired by Bank of America).
  • 2 Units that are “sold” have binding contracts with secured escrows pending settlement, according to Buccini/Pollin.
  • 3 Development has proceeded without a master plan that specifically covers the central business district and riverfront.
  • 4 Census data show that in 1999 Wilmington’s poverty rate was 21.3 percent (compared to 9.2 percent statewide) and median family income was $35,116 (vs. $55,257 statewide). Similarly, Wilmington’s homeownership rate in 2000 was 50.1 percent (vs. 72.3 percent statewide) while the city’s unemployment rate in 2005 was 6.3 percent (vs. 4.2 percent statewide).