Milford signs incentive deal for Wellness Village

The former Milford Memorial Hospital will eventually be transformed into a wellness campus under the watch of Nationwide Healthcare Services. | DBT PHOTO COURTESY CEISLER MEDIA

MILFORD — With the long game in sight, the Milford City Council approved a short-term economic incentive deal with Nationwide Healthcare Services for its $30 million Milford Wellness Village and its anticipated 150 to 200 jobs.

The Milford Wellness Village aims to bring an array of health care, social services, physical therapy and childcare services within a campus setting to the former Milford Memorial Hospital. At the heart of it all is Polaris Healthcare & Rehabilitation Center, a 150-bed skilled nursing facility, which started accepting patients this year.

“The repurposing of this property has been a partnership with the city of Milford since inception and we are very encouraged by the city’s support. We look forward to welcoming many more businesses and partners to the Milford Wellness Village,” Nationwide Healthcare Services CEO Meir Gelley told Delaware Business Times.

Under the deal, the city entered into an electric agreement for set rates for the next five years as well as waiving water and sewer impact fees if renovation work is complete within three years. But if the COVID-19 pandemic delays that work, Milford officials could offer an extension. 

In addition, Milford signed off on a 10-year real estate tax abatement. In exchange, Nationwide will withdraw its appeal on the assessed 2019 tax value of the property.

For the first two years, Nationwide will receive a tax break on the assessed value of the hospital building and not on any other ancillary properties included in the sale from Bayhealth to Nationwide last year. After the second year, the abatement rate will gradually drop each year based on the square feet of space occupied in the 266,000-square-foot facility by the previous year.

For example, if 100,000 square feet of the Milford Wellness Village is used by the end of the second year then the tax abatement would be 62.4% in the third year. 

Milford officials seem confident that Nationwide will start paying property taxes by the third year since the Milford Wellness Village has already leased 26% of its space. Tenants include La Red Health Center; Aquacare Physical Therapy; Kidz Ink Academy of Early Academics; and Massage Therapy. 

The Milford Wellness Village qualifies for 40 EDU worth of impact fees, resulting in $190,000 in savings, according to Milford officials. But it’s unlikely that all of them would be used because the former Bayhealth hospital already had existing plumbing features. In the first two years under the tax abatement program, the city would waive $121,000 in taxes. In comparison, the property was tax exempt when Bayhealth used it for a hospital.

Milford started offering various city incentive programs in 2017 when Bayhealth looked to relocate four miles south of Milford with better access off Route 1 as a way to entice developers and offer some assistance as the business starts operations. Both Bayhealth and Nemours received similar deals, as did Silicato Development’s rising Tenth Street Medical office and Milford Movies off Route 1.

“These programs are not meant to become the reason why business comes to Milford, but a measure of goodwill,” Milford Planning and Economic Development Director Rob Pierce told DBT. “It’s a way to help lift some of those up-front burdens construction faces in construction. It’s also timed out so it gives these developments a chance to get up and running.”

Under the terms of the deal, Nationwide officially planned for $18 million in investment but representatives previously told DBT it would likely be up to $30 million with all offices filled.  Polaris would add more wings to the facility’s first and second floors, eventually bringing the facility to its 150-bed capacity by as early as January 2022.

Other tenants that will open soon include PACE Your Life (Program of All-inclusive Care for the Elderly), a service that provides comprehensive medical and social services to eldery people in the community, as well as the Lab at Seascape, a full-service clinical laboratory.

Earlier this week, Banyan Treatment Centers opened its doors, launching additional services for the surrounding community like daily therapy sessions, community support groups and additional medical care. Nurses N Kids, a nursing program for infants and children with acute and chronic medical needs, developmental delays and nutritional deficiencies, is scheduled to open later this month.

It’s projected that Nationwide will lease out another 50% of the Milford Wellness Village before the end of the year.

Milford elected officials lauded the plan as one that minimizes costs while it searches for tenants for Nationwide in hopes of turning it into an anchor for the city.

“They’re on the fast track to enhance the number of jobs available in the health care industry and increase that value in education for a [Certified Nursing Assistant] and others in the nature of the health care field,” Milford City Councilman Jason James said at the Sept. 15 meeting.

Historically, Milford has made similar deals in the past to entice businesses and redevelopment in order to shore up the tax base. But this project in particular hopes to breathe new life into the city, with several health care employers now within a short drive of its residents.

“There’s numerous advantages, not only for our young in Milford to get trained and give them a possible reason to stay here. That in itself will embolden our city to help it grow with citizens that give it ownership of the community,” City Councilman Andrew Fulton said.

By Katie Tabeling

ktabeling@delawarebusinesstimes.com