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New cold-storage warehouse planned for Claymont

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First State Crossing Claymont Delaware Cold Storage Warehouse Agile

The 300,000-square-foot cold-storage warehouse would be developed in two phases. | MAP COURTESY OF NCC

CLAYMONT – A cold-storage warehouse could be coming to the redevelopment project at the former steel mill in Claymont, marking the rare addition of a high-value distribution center to Delaware.

While most of the millions of square feet built in Delaware in the last five years is typical four-wall warehousing, a proposal from Community Development Corp. would build a climate-controlled warehouse at its First State Crossing project off Naamans Road.

The 300,000-square-foot warehouse would lie near the Interstate 95 interchange across the road from the former Tri-State Mall. It marks a departure from the original development plan from CDC announced before the pandemic, which had targeted the 31-acre parcel for office and retail development.

First State Crossing Claymont Delaware Cold Storage Warehouse Agile

This parcel on the former Evraz steel mill is planned to become Delaware’s newest cold-storage warehouse, employing several hundred people. | DBT PHOTO BY JACOB OWENS

CDC President Stephen Collins told the state’s Preliminary Land Use Services members that the downturn in office demand amid the new work-from-home and hybrid work trends convinced his firm to pursue a new best use for the site that was previously the steel mill’s scrapyard.

“This was originally slated to be a high-rise office building but, as you know, the market for office space is pretty slow right now and this very attractive cold storage facility came forward. So, we were able to strike a deal with them,” he said. “They’re going to build a very high-tech building.”

The project has reportedly been approved for expedited review by New Castle County’s Jobs Now program and the Delaware Department of Transportation, potentially speeding the time to build for the industrial-zoned site.

Collins said that he expects the facility, which will be built in two phases, to hire several hundred people. It will import food products through the Port of Wilmington and the Port of Philadelphia to distribute within the mid-Atlantic region, he said.

A tenant has not been announced for the facility, but Georgia-based Agile Cold Storage, a third-party logistics provider that stores and distributes for other companies, is named within county filings. Indiana-based developer Ti Cold has been contracted to build the facility.

In Delaware, there are only four current cold-storage warehouses, with two on the Port of Wilmington site to accommodate produce leaving refrigerated ships. The warehousing niche has been seeing growing demand by investors, however, with 39% of investors expressing interest in the industry in CBRE’s 2022 Investor Intentions Survey – up from 7% in 2019.

Cold-storage warehousing is considerably more expensive to build than regular warehousing because of the industrial chillers and insulation required to keep refrigerated or even subzero temperatures in a space. Those costs usually lead to higher asking rents and longer leases though, providing some job stability for local markets.

At First State Crossing, the cold-storage warehouse would join a traditional, 385,000-square-foot speculative warehouse being built just to the southeast by First Industrial Realty Trust, a top publicly traded real estate investment trust. It would also sit across the street from another redevelopment project where New York-based developer KPR will raze the former Tri-State Mall and build a 525,000-square-foot distribution center.

The trio of projects aim to kickstart the Claymont economy that has suffered following the closure of the Evraz steel mill, with CDC aiming to invest upward of $1 billion to reimagine its site with retail stores, offices and housing too.

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