By Jon Hurdle
When Barley Mill Plaza opens near Greenville in the next few years, the mixed-use development will be one more option for office tenants looking to locate in the suburbs of northern Delaware.
Whether that means competition for downtown Wilmington, depends on who you’re talking to.
“I think it’s complementary,” said Wills Elliman, senior managing director in Newmark Knight Frank’s Delaware office. “By being in the suburbs, tenants save on the wage tax and parking costs, but then they’re also stuck out in the suburbs. The advantage of being downtown is that walkability and proximity to restaurants.
Wilmington boosters say the city in recent years has become a more attractive for young, educated employees of law firms, technology companies and financial-services firms. They have a wider choice of quality housing than in the past, and a growing selection of restaurants and entertainment venues along Market Street.
Barley Mill Plaza can’t match those amenities, said Rick Kingery, vice president in the Delaware office of Colliers International, a real estate services and investment management company.
“You can add amenities in suburban areas, but you cannot supplant the in-place, organic variety and quality of the city of Wilmington’s downtown amenity base offerings,” said Kingery.
Paul McConnell, whose McConnell Johnson Real Estate owns or manages 1 million square feet of space downtown and a similar amount in the suburbs, believes that there’s been too much emphasis on the housing piece. With 2.5 million square feet of available downtown office space, he thinks that the city’s efforts to attract new tenants and retain existing ones needs to focus on convincing the University of Delaware to open a Science and Technology Center there and to solve the well-documented cost of downtown parking.
“Every empty space in the suburbs competes with the city and we need an initiative that will help provide the right workforce – high-tech jobs – to our downtown tenants,” he said. “The suburbs have struggled for the past eight years, but we’re seeing financial services companies moving out of the city and they’re taking lots of (six-figure) jobs with them. Companies that have customers who want to come (to their offices) are leaving the city because of the parking issues. The city’s problems can be solved but they require change and not everyone seems ready to do that yet.”
Kingery sees the northern suburbs as “a highly desirable location for office tenants, and it has to do with Delaware’s high concentration of financial services.They all like to locate out there because of how close it is to where their executives live. It’s high-level office space.”
The Avenue North development on the AstraZeneca campus north of Wilmington is further evidence of an interest in suburban real estate. The 80-acre campus at the intersection of U.S. 202 and Powder Mill Road in Fairfax will include residential, retail, office space and other amenities. Christiana Care Health System
and Solenis have already entered into long-term leases.
The Barley Mill project, totaling 465,000 square feet of retail and office space plus 33 townhomes and 80 condos, was warmly welcomed by about 200 Greenville residents at a public meeting to unveil the plans, which include a Wegmans supermarket as the anchor retail tenant.
Developer Greg Pettinaro, presenting the plan in a high school auditorium, drew several rounds of applause from attendees, many of whom had previously opposed a much larger plan by Pennsylvania-based Stoltz Real Estate Partners to build 2.5 million square feet of office and retail space plus 700 apartments at the site.
Even though the Stoltz plan was later scaled down, it was far larger than the Pettinaro project, and fueled local anxieties about traffic tie-ups because of the hundreds of new workers and residents that would have come with the earlier plans.
Pettinaro attributed the positive reception to the smaller size of his development, to the fact that the upscale Wegmans will anchor the project, and to a planned series of walking trails that will be designed to nurture a live-work-play community.
“I can’t remember the last time I was in a community meeting and they actually applauded,” he said. “I was guardedly hopeful that this would turn out with most of the community support it. I couldn’t
Still, some attendees said they remain concerned about increased traffic and runoff from the 56-acre site, 11 acres of which will be kept as green space.
Traffic is already heavy, partly because of a school that sits on the north side of the site, and that’s without any new tenants, said Bill Dunn, a member of the Civic League for New Castle County, after the meeting. “Traffic is the biggest issue,” he said.
Pettinaro said he was confident that the new retail space will see strong demand from businesses that service Wegmans, and from retailers who recognize that Wegmans customers can also be their customers.
He also predicted good demand for the townhomes because there is limited other supply nearby at their anticipated price point of about $600,000.
The developer plans to turn over the pad to Wegmans in April 2021 with the expectation that it will open in the summer of 2022, Pettinaro said. He said he did not finance the purchase of the site and hasn’t “thought about financing for the construction yet.”
Shoppers from both sides of the city line will likely flock to the popular anchor tenant.
“You have a lot of urban residents, and it will be an amenity for them as well,” said Elliman. “Downtown is at most four miles away.”