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Amazon and Pepsi Bottling are among companies that have recently worked toward lease negotiations at the new warehouse on Churchmans Road in New Castle County. l DBT PHOTO BY JACOB OWENS[/caption]
NEW CASTLE — A new health care center in Long Neck and warehouse facility in New Castle County will see completed work in the near future thanks to support from Delaware’s Transportation Infrastructure Investment Fund (TIIF) Council during its recent meeting held on Tuesday.
Members of the nine-member council awarded extensions to KSIP I Piccard LLC in New Castle and agreed to payout previously granted funds earlier than expected after hearing about delays and difficulties project managers faced.
Funds granted to entities through the TIIF Council are typically paid out to awardees after projects are completed and inspections are done by Delaware’s Department of Transportation (DelDOT). However, some delays have pushed progress of the warehousing location back.
The property, now owned by KSIP I Piccard LLC as of 2021 when it purchased the spot for nearly $26.2 million from Pennsylvania-based developer Stoltz Real Estate Partners, is located at 550 Churchmans Road — close to the Wilmington-New Castle Airport.
The group is working to build an 890,000 square foot warehouse on the parcel that spans about 59 acres and is currently negotiating with several potential sole tenants for that building, including Amazon and Pepsi Bottling.
Construction will include a connector between Old Churchmans and Churchmans Roads along with a signal and pedestrian crossing, road improvements, channelized turn lanes on southbound U.S. Route 13 and Delaware Route 273 and new transit stops among other transportation needs in the area.
The project was previously awarded a $2.5 million TIIF grant in 2021 and another $2.9 million last year, although that second award was contingent on the developer finding a tenant by Aug. 31, 2024. Faced with an approaching deadline that could mean KSIP I Piccard LLC would lose out of millions in grant funding if it failed to meet the tenancy condition, the company found itself asking for help from the council again.
Bumps in the road that have nearly stalled progress in some cases have included delays in the relocation of Artesian water lines at the location and delayed Federal Aviation Administration (FAA) approval of existing easements, according to DelDOT.
“The FAA approval on some easements that had been granted over 10 years ago finally came through, that was in the past few months and that was critical so we could start certain work in certain areas,” Shawn Tucker of Barnes & Thornburg, LLP, said of the KSIP I Piccard LLC project which he was representing.
He added that the nearby finding of perf- and polyfluoroalkyl substances (PFAS) contamination has also been a source of delays as potential tenants do their own due diligence in researching the area prior to signing agreements.
“I can confirm that there was no PFAS located on this property. There certainly were reports from DelDOT. . . about PFAS being in the area,” Tucker told the council. “I can share with the council that there’s one major tenant who is doing some additional due diligence in the area because of that factor. . . In fact, this particular potential tenant has put out a national policy, we’ve recently learned, that for any new site that could potentially touch PFAS or be around PFAS, they would look at it more closely. So that certainly could have contributed to a delay with that particular tenant opportunity, but we don’t see that as a permanent thing.”
The council granted an extension of one year to the tenancy requirement for the location after hearing of the delays encountered by KSIP I Piccard LLC. The council also agreed to allow DelDOT to release some of the funds awarded to the company prior to site completion, but at DelDOT’s discretion.
“About $165 million is the spend here to date [from KSIP I Piccard LLC]. The contributions from the state and TIIF are critical to help offset some of those costs certainly and make us competitive in the marketplace with other states when it comes to rent. It all adds up and is very important,” Tucker said.
To sweeten the deal for potential tenants looking to Delaware for their next big move, he told council members that KSIP I Piccard LLC is also now working with the Delaware River Bay Authority (DRBA) to lock down a lease for a space to use as a parking lot facility for semi-trucks after listening to market demands.
“The market has evolved a bit in the direction of more trailer parking. Folks interested in sites like this need and want more trailer parking. . . We try to react very quickly to respond to market needs,” he said, adding a thanks to DelDOT for working with the company to ensure the project’s completion and the addition of 225 to the local economy.
In Long Neck, another project was awarded funds for the first time – a health care facility owned by SCMC Long Neck LLC to be operated by Beebe Medical Center. Plans would includes a primary care facility with residency teaching space for up-and-coming doctors.
The 32,000-square-foot facility to be located at 32050 Long Neck Road also needs to add transportation elements to the project, such as site entrance modifications, widening and restriping of Long Neck Road, a pad for a public bus shelter and more.
The project, according to the application, would create 20 new jobs and maintain 24 jobs for the Long Neck area. The council awarded nearly $544,500 to help the project reach completion, an amount that Joanna Murzyn of Delaware’s Division of Small Business said the state would likely recoup quickly.
“After reviewing the financials. . . it is estimated that the successful implementation of this project would increase state and local taxes collected in the amount of $540,577 annually,” Murzyn told council members.
The TIIF Council has awarded more than $50 million to date, helping create or maintain 11,661 jobs across the state.
