KPR plans warehousing at Tri-State Mall
CLAYMONT – After decades of retail use, the Tri-State Mall will be getting a new purpose if its new owner KPR proceeds with plans to build a large distribution warehouse targeted at the booming e-commerce sector.
KPR, the New York-based real estate investment firm formerly known as Katz Properties, bought the mall from The Lefrak Organization for $12.5 million in early June, according to county land records.
On Tuesday night, local land use counsel Mike Hoffman presented preliminary site plans to interested residents at a public meeting in Claymont.
KPR proposes to raze the entire 41-acre property and build a 525,000-square-foot distribution center at the center of the property – essentially replacing the 535,000-square-foot Tri-State Mall’s presence. A small 15,000-square-foot retail strip would be built near Naamans Road, potentially housing some of the small retailers who still operate at the largely empty former mall.
While prior owners and managers of the property have explored bringing a big-box retail brand to the site over the past six to eight years – and idea that many local residents have pushed for – the interest from the retailers themselves just hasn’t aligned and the COVID-induced drive to online shopping has decreased that appetite even further, Hoffman told Delaware Business Times.
“[KPR] knows retail, and if this was a prime location that they felt confident they could get that retail use, they would have been the guys presenting it,” Hoffman said of the firm that owns dozens of properties along the East Coast, including primarily retail centers anchored by grocery stores. “Where there is a lot of interest in e-commerce, warehousing and logistics, supporting particularly that last-mile delivery.”
Companies are particularly desperate to find sites that are close to highways and other transportation infrastructure as online sales grow exponentially each year, led by industry leader Amazon, which has built a network of such facilities in northern Delaware. The Tri-State Mall site is adjacent to the northernmost Delaware interchange to Interstate 95 and a short drive from the New Castle-Wilmington Airport and Port of Wilmington.
Hoffman said that KPR was interested in getting an “immediate investment” in Claymont, and that “e-commerce is the no-brainer.”
The redevelopment of the Tri-State Mall comes at a time of revitalization for Claymont, led by the redevelopment of the former Evraz Steel Mill into a massive mixed-use development called First State Crossing right across the road from the mall. That 425-acre project, led by the St. Louis-based Commercial Development Company, includes light industrial, office, retail, and residential.
Although a distribution warehouse would likely easily find a tenant once built and bring upward of 500 jobs to a community that has seen hundreds disappear over the years, the proposal doesn’t fit the North Claymont Area Master Plan developed a few years ago by local, county and state officials and stakeholders. That plan envisioned the mall being redeveloped into a mixed-use lifestyle center that incorporated residential, retail, and institutional uses.
Brett Saddler, executive director of the Claymont Renaissance Development Corp., a nonprofit tasked with promoting strategies for the community’s economic development and revitalization, said that although KPR’s proposal wasn’t aligned with the plan his group helped develop, he looked forward to trying to best integrate the project to the larger community.
“We’re excited about the jobs it will bring to Claymont,” Saddler said. “We’d like to take this opportunity to work with them and see what we can do together to enhance and support the adjacent residential areas, such as Hickman Row.”
Hoffman noted that one of the biggest benefits of the KPR plan is the return of about a third of the site to green, open space, whereas currently less than 10% of the largely pavement-covered site is green. Considerable landscaping would front Naamans Road as well, improving the appearance as officials aim to revitalize the area, he added.
KPR plans to take the public feedback received at Tuesday’s meeting and form an official plan to submit to the county’s planning process later this year, Hoffman said.
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