New Castle County to debate warehouse moratorium
In the last three years, New Castle County has seen explosive growth in warehousing and logistics projects, led by massive fulfillment centers for e-commerce giant Amazon.
It leased the state’s largest building, a 3.8 million-square-foot, robotics-assisted facility in Newport, and another 1 million-square-foot facility near Bear.
On the back of that demand, a number of other retailers, distributors and industrial parts suppliers are lining up to lease warehouses along major thoroughfares like Interstate 95, U.S. Route 13, Delaware Route 1 and more. The county currently has 11 projects in the pipeline that will bring about 12.3 million more square feet to market.
While these projects started by reclaiming neglected auto plants, exhausted mining pits, and dilapidated shopping malls, they are increasingly being pushed to undeveloped spaces and farm fields, sometimes raising the ire of local residents who complain about noise, air and light pollution from warehouse tractor-trailers they didn’t know could locate near them.
That led County Councilman David Carter to recently introduce Ordinance 22-135, which would implement a one-year moratorium on any new warehouses larger than 150,000 square feet – a move that already has the business community lining up in opposition.
The ordinance is due to be discussed at the state’s Preliminary Land Use Services meeting in January for input from state agencies but will likely begin deliberations in the county in February. If approved, those projects that enter the planning and permitting process before the moratorium is enacted would likely have to be grandfathered in.
“There are places where [warehouses] are very appropriate,” Carter told Delaware Business Times. “But then we have other areas where they’re just popping up amongst new developments like Whitehall and Bayberry. We don’t have really clear zoning that really looks at some thoughtful criteria about where they are best placed.”
While communities near the planned Jamison Corner warehouses have recently raised concerns, Carter said he’s been looking at the zoning issues related to industrial and warehousing for many years, arguing that the county’s zoning codes have not been updated to reflect the reality today. While he doesn’t oppose warehousing in industrial zones, its presence in commercial regional (CR) zones have become more controversial.
“I guess because of our ‘business-friendly’ mindset, instead of a ‘business-responsible’ mindset, we don’t tend to be proactive on these things, and we really should have been addressed this through the Comprehensive Plan,” he said, referring to the decennial plan approved in July that reassesses zoning and land use issues. “There’s no doubt this is a pretty draconian move, but in my four years on council and in the six years we’ve had this administration, there really hasn’t been any willingness or interest to modernize our zoning, which is just woefully out of date.”
Carter said he doesn’t know if he’ll be able to get six fellow votes on the 13-member council to pass the moratorium, but said he was more concerned about “having a robust conversation on the issue.”
“I will continue to push it because once you make these land use decisions and you build it, it lasts for generations. And it’s important that you proactively look at it and get it right,” he said.
He can expect to have adamant opposition from most of Delaware’s major business organizations, including the county chamber of commerce and the state’s public-private economic development organization, the Delaware Prosperity Partnership.
Robert Chadwick, president of the New Castle County Chamber of Commerce, told DBT that a moratorium would be a “huge red flag for site selectors” looking at the state. He also expressed concern that the county’s Comprehensive Plan aims to phase out heavy industrial projects, which “begins to make one wonder how dedicated some of our county elected officials are to jobs and economic growth.”
“DPP thinks it’s appropriate to examine how particular trends or market demands are evolving and the diversity of factors even in what seems to be a single sector like logistics. We believe recent industry activity that brought a flurry of new fulfillment facilities to Delaware may already have slowed. We should be careful that actions don’t create the perception that a community’s door is shutting to capital investment and job opportunities,” added Kurt Foreman, president and CEO of DPP.
“Bottom line, while a moratorium may seem like a solution to consider, they are blunt instruments that often have unintended consequences,” Foreman added. “ Although this consideration is well-intended, we don’t think we should be sending signals to the business community – local, regional, national or international – that Delaware is a state that is willing to postpone or cancel momentum.”
Carter said that he didn’t agree with such arguments, adding that he didn’t believe warehousing jobs were producing the kind of wages that county leaders should be looking for right now, preferring to emphasize the growth of small businesses instead.
“A few of the companies I’ve talked to are probably happy to see a little bit of a reduction in competition. I think they’re starting to see that tightening in the market,” he said.