Milford building boom continues despite pandemic
MILFORD — While many Delaware businesses are facing an uncertain economic recovery, Milford is forging on with its building boom with developers believing that if they build it, people will come.
Milford has become a big draw for developers since a wave of retirees flocked to the area, seeking Delaware’s tax-friendly atmosphere combined with Sussex County’s proximity to beaches. In turn, the state’s southern hospital systems, including Bayhealth and Beebe Healthcare, are likewise expanding their reach there.
Since 2015, Planning and Economic Development Division Director Rob Pierce said the city has been growing steadily. His department has processed hundreds of building permits in the past few years, with about 186 home permits issued last year.
Looking at another year of growing Milford, Pierce predicted another 200 homes built in 2020 before COVID-19. Now he is looking at another 180 homes built before the year is over, a small downtick in an otherwise stable housing market.
“In the first two months, we did see some strong growth, but it did drop off in May,” he said. “I have a feeling that in the future the feeling around building will be a lot better, because the interest is still here.”
That slight downtick does not concern Milford officials, since the city is on the verge of a building boom years in the making. Right now, Milford has 5,470 housing units approved, breaking down to 1,451 planned single-family detached dwellings, 52 planned duplexes, 939 planned townhouses, 1,477 planned apartments and 1,551 planned condominiums.
Even though the virus has cast shadows on economic prospects, developers see Milford as a sound bet because the main draw will remain firm: its location.
“In Milford, you have Bayhealth and other medical complexes. You have that access to Route 1, so it’s really accessible from Dover or even Middletown to shop or the beaches,” said Nick Hammonds, principal with Jack Lingo Asset Management. “The demand is there and it’s not going anywhere.”
Jack Lingo Asset Management is developing the $40 million Windward on the River, a 264-unit apartment complex designed for families. Phase 1 build-out includes up to 144 units and will be done in the second quarter of 2021. Depending on leasing, build-out on the rest of the units will follow.
It’s one of the few multi-family apartment complexes on the market in Milford compared to the sea of single-family subdivisions. By 2008, roughly two-thirds of Milford’s housing stock was single-family homes, and while that has diversified over the last decade, older homebuyers are still driving the market with single-family homes.
Recently the Milford City Council reaffirmed Milford’s status as a boom town by approving 1,167 new units, which includes the next phases of Milford Ponds planned-unit development and Hickory Glen’s 399 units between apartments and townhomes.
The council also approved Ryan Homes’ amendment to the Milford Ponds PUD development, which removed townhomes from the plan since the “market was not as strong in this area,” according to Ring Lardner, of Davis, Bowen & Friedel, the project’s engineering firm. Milford Ponds now features 264 multi-family apartments and 504 single-family homes, to be built out in phases.
But still, Hammonds says there’s opportunity to cater to young professionals moving for work or retirees looking for a low-maintenance second home.
“There’s not a lot on the market in terms of leasing so we think we’re delivering at a good time,” he said. “We were down for about a month and there was a lull in multi-family leasing, but there’s a rebound. There’s still a lot of people leasing.”
In terms of commercial construction, Dennis Silicato of Milford-based Silicato Development said that coronavirus has not changed his immediate outlook. His firm is working toward opening the future Tenth Street medical facility in late November, even if it’s a partial opening.
The three-story facility would include primary care doctors and a physical therapy center, complete with a coffee shop on the first floor for waiting patients. Fifty percent of the building is already leased, and Silicato has notice of intent letters out to others in the health care industry.
“This market is wide open with Beebe and Bayhealth coming here, because you’re going to need these doctors and other specialty care treatments as well,” he said.
COVID-19 has yet to slow down his building, but it’s hitting his other businesses in the city, like Arenas restaurant and the Fur Baby Pet Resort, which were closed temporarily during the state shutdown, Silicato said. While the uncertainty surrounding reopening does give him pause, he believes moving forward is better than standing still.
“If I had a tenant that wasn’t concerned about what’s been going on, that would concern me,” he said. “Of course, I have major concerns, but you can do nothing, or you can work hard. Luck is manifested by knowledge and hard work.”
Beacon Hospitality Managing Director Chad Moore is looking to break ground on the Microtel in Milford soon, making it Beacon’s latest addition in a chain of southern Delaware hotels. The major difference he’s experienced in the process so far is in the permitting.
“People stopped meeting face-to-face. So, when we were seeking permits, they take notes and send it back to you. Then you must comment back in email to help clarify a few things, so that drags it out compared to a conversation,” Moore said.
The Microtel in Milford is slated to open in May 2021. If the project was further along, Moore said he would be concerned with interior renovations.
“We would have issues getting countertops and appliances due to the breakdown in the supply chain, like we’re seeing with another hotel we’re renovating right now. But it hasn’t really changed the timeline,” he said.
Work also slowed down at the future Milford Movies off Route 1 due to social distancing requirements, according to developer Arthur Helmick. He and ONIX Group are transforming the former Walmart location into a nine-screen theater boasting 840 seats and plans to have it open this fall.
It’s following the success Helmick had with Westown Theater in Middletown as well as the revamping the Main Street Theater in Newark.
While he thought 2020 was going to be difficult for business everywhere, Helmick was optimistic that the next year held a more stable market — particularly because there was no movie theater between Dover and Lewes.
“Milford is exactly like Middletown was 10 years ago. The growth is there, especially with Bayhealth there,” Helmick said. “There’s a middle market that’s not being addressed unless you go to Maryland and with beach traffic it’s always hard to get anywhere south.”
From a broader perspective, Helmick has faith the economy will stabilize more the next year with a future vaccine. Until then, his movie theaters are set up so when you buy a ticket, the two seats next to you are unavailable to book.
“Sure, there’s concerns. But there will always be concerns,” he said. “Every industry is having conversations like this right now, and I have faith in America, in science and the system. I have faith we’re going to find our way.”
By Katie Tabeling