Walkable communities like Whitehall and Middletown redefine ‘downtown’

At the Villages of Five Points in Lewes, prospective homeowners have embraced the idea of walking to a coffee shop, restaurant, bank, or grocery store.//Photo by Southern Delaware Aerial Photography.

By Pam George
Special to Delaware Business Times

On a sunny Saturday, people bundled in coats and scarves stopped to enjoy a band strumming on an old-fashioned street corner. The group’s backdrop was a quaint retail space with a corner door and two stories of apartments on top. The business at nearby Half Baked Café, which boasted a pink-and-white striped sign in the window, was brisk.

Just another day in Star’s Hollow, the small town setting for “The Gilmore Girls?” The scene was part of the Fall Fest at the Town of Whitehall in Middletown, which is under construction.

Whitehall is a mixed-use community that will include single-family homes, apartments, town homes, shops, restaurants, businesses and, if a referendum passes, a new Appoquinimink School District elementary school. Three two-story apartments and two single-family homes are currently occupied.

Half Baked Café, the first retailer, is the sister business to Half Baked Patisserie, which is also in a charming town setting. Only this area, Middletown, is a historic section that came of age in the 19th century.

Both the Town of Whitehall and downtown Middletown represent the live-work-play approach to development. One is a new development. The other is an example of revitalization. Both face similar issues, namely filling the space and keeping occupants happy.

“There isn’t a simple one-size-fits-all answer to … building and filling space,” said Jonathan Justice, associate professor at the University of Delaware’s School of Public Policy and Administration. “It will vary for every project, depending on what the existing demands are for residential and commercial space and what the targeted new or additional markets are for each.”

Music in the air at Fall Fest.

Rejuvenate and revitalize

Rick Ferrell, the owner of Wilmington-based Retail Market Answers, has seen both sides of the equation. From 1988 to 1993, he was vice president and general manager of the Rouse Co., which pioneered
the development of festival marketplaces such as Faneuil Hall in Boston and Harborplace in Baltimore. These projects involved the urban redevelopment of existing spaces. Now focused on downtown revitalization strategies, he is a consultant working with the town of Smyrna on redevelopment, primarily in the historic district.

“In my old life, you bought an asset and had site control. If you had an idea, you would implement it,” he said.  “The market would tell you if it was a good idea. In a downtown setting, it’s the property owners who are the gatekeepers as to who occupies a space.”

For decades, some owners couldn’t afford to be choosy. In the 1960s, Americans began migrating to the suburbs in force. It became normal to commute to work or drive to supermarkets. Downtowns struggled.

The National Trust for Historic Preservation launched the Main Street program in 1977 in part to save commercial architecture in towns that were sliding into a decline. The program’s four-point approach focuses on organization and partnerships, promotions that create a positive image, the creation of an aesthetically pleasing environment and economic restructuring.

Downtown Delaware, part of the Delaware Economic and Development Office, coordinates the state’s program, which now has seven Main Street communities: Delaware City, Dover, Middletown, Milford, Newark, Rehoboth Beach and Wilmington. Newark has received awards for its economic development and its ability to draw stakeholders together. In the last eight years, DEDO has expanded its outreach to rural towns with a tier known as affiliates.

“They’re generally smaller yet have wonderful assets that can be expanded and promoted to become more of a destination and more relevant to the community in terms of the goods and services they offer,” Laird said. “But they may not have the funds to have a paid manager. They can have a committee of five or six to create initiatives and implement them on smaller scale.”

Smyrna, an active affiliate, is seeing progress, she said. Since 2013, Smyrna has created $2.6 million in reinvestment and generated more than 100 jobs to the area, according to a promotional brochure.

One secret to its success is the cooperation between the downtown district and economic development efforts busy corridor on U.S. 13.  “They can make sure they’re bringing in compatible businesses,” she said.

Half Baked Café is open for business in Whitehall.

Building a town

Chris Grundner would like to see similar cooperation between the efforts of the Middletown Main Street program and the Town of Whitehall, which is an example of what developers call “new urbanism.” Grundner is chief operating officer of the Wilmington-based Welfare Foundation, which owns the 2,000-acre property on which the Town of Whitehall resides. The foundation also owns Scott Run Business Park, which will offer more than 1 million square feet of light industrial and office space.

New urbanism is a familiar concept in Maryland. Columbia, Kentlands in Gaithersburg and King Farm in Rockville were all developed between 1966 and 1998.

Outside of the Town of Whitehall, the only other example in Delaware is the Villages of Five Points, located near the Lewes city limits. At the time the Hudson family purchased the property in 1998, many Lewes residents drove to Rehoboth to shop. They decided to incorporate businesses into the mix. The Hudsons partnered with Mike Lynn, who’d developed properties for the Carl M. Freeman Cos. “Mike brought several architects in and together they traveled to successful walkable developments and turn-of-the-century downtowns,” said Christian Hudson of Hudson Management Co.

The resulting design features a Main Street-esque avenue lined by town homes and retail space with condos on top. Shops and the community clubhouse sit on a circle. More townhomes, condominium buildings and single-family homes are on the perimeter. Construction started in 2000 and Fish On, a restaurant, opened in 2001.

Finding balance

At the Villages of Five Points, prospective homeowners embraced the idea of walk-ing to a coffee shop, restaurant bank or grocery stores. “They view the businesses as an amenity, and it’s one of the primary draws for residents,” Hudson said.

Residents in new construction aren’t the only ones to see such advantages. Access to services is a major selling point for The Buccini/Pollin Group, or BPG for short, whose Market Street corridor project in downtown Wilmington includes 114 existing apartments, located from the 400 to the 800 blocks. BPG in June broke ground on the Residences at Midtown Park, a $75 million complex that will include 200 apartments, 12,000 square feet of retail space, and a 500-space underground parking garage. In September, BPG announced the acquisition of three properties with more than 60,000 square feet that will include apartments above retail/restaurant space.

Bringing businesses into a new live-work-play mix is challenging. “The businesses weren’t really sure about the whole concept,” Hudson agrees. “They didn’t have exposure on Coastal Highway.” Many of the first occupants were Rehoboth Beach-based businesses opening a satellite near Lewes. Today, the center has several restaurants, a fitness facility, salon and dance studio. “We’re always trying to curate the right mix,” Hudson said.

The Town of Whitehall is divided into villages, the largest of which, Mapleton, will feature 250 homes, restaurants and other businesses. “There is no question that it is a bit of chicken-and-the-egg when it comes to retail and restaurants,” Grundner said. “Residents will be attracted to live close by businesses, but those same businesses might struggle to survive before enough residents are in place to support them. We’re committed to working both residential and retail tracks simultaneously.”

It helps to have a population base both in the community and outside of it, Ferrell said. Few would argue
that is also true for historic downtowns, such as Middletown, which now has a low vacancy rate, and historic Lewes. Smyrna, Dover and Milford are also in areas of rapid development.

Rural areas face more obstacles. DEDO just received an $80,000 grant from the USDA Rural Development Program to put toward the effort.

All the existing communities benefit from a local investor with a stake in the community, Ferrell said. Few are as large or invested as real estate developer BPG in Wilmington, which has the resources to weather the time between making changes and seeing a return on investment to cover the cost.

Even a brilliant Main Street organization can struggle to get traction in the market to the degree that all the stores are filled and profitable, said Justice of the University of Delaware. Sometimes the “second mouse” gets the cheese, Ferrell said. Businesses that couldn’t bridge the gap between their initial investment and turning a profit leave existing spaces that are ready for the next occupant. That might happen with the Inn at Duck Creek in Smyrna, which underwent massive renovations only to close in about a year.

Whether New Urbanism or Main Street programs will work depends on the criteria for success, Justice said. But if developers have their way, downtowns will once again have their day.