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Mega-developer buys into Boxwood project

Jacob Owens November 11, 2019

NEWPORT – A large national developer announced plans Friday, Nov. 8, to buy about 88 acres of the former General Motors Boxwood site, invigorating the property’s redevelopment plan. The fate of the 142-acre site at ...

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NEWPORT – A large national developer announced plans Friday, Nov. 8, to buy about 88 acres of the former General Motors Boxwood site, invigorating the property's redevelopment plan. The fate of the 142-acre site at 801 Boxwood Road has been on the minds of many Wilmingtonians for the past two years after Harvey Hanna & Associates Inc. announced an ambitious revitalization plan to prepare it for a distribution future. Its close access to CSX rail, the Port of Wilmington and Interstate 95 made it a particularly interesting prospect for many, but its history of trading hands and need for environmental remediation of the former GM assembly plant have hampered progress until recently. [caption id="attachment_170501" align="aligncenter" width="813"]

The former GM Boxwood plant has been razed and will now be developed by Nevada-based Dermody Properties. PHOTO COURTESY OF HARVEY HANNA & ASSOCIATES[/caption] On Friday, Reno, Nevada-based Dermody Properties announced its plans to acquire nearly two-thirds of the western side site for an undisclosed price. While county deed records reflect only a nominal valuation, calculation of the state transfer tax show that the property was sold for about $21.6 million. In late October, Dermody submitted plans to the New Castle County Board of Adjustments to change the approach from building four warehouses on the site to one measuring nearly 4 million square feet. "After learning about Harvey Hanna's plans for the former Boxwood plant property, Dermody Properties was immediately impressed by its nearly limitless potential," said Eugene Preston, Dermody East Region Partner who will oversee the project, in a statement. "Between its strategic location along the I-95 corridor, rich local labor pool, proximity to a coveted deepwater port in the Port of Wilmington, and history as a nucleus for Delaware's economy, it represents an ideal asset for today's booming e-commerce and logistics industries. We are excited to be working with Harvey Hanna to contribute meaningfully to this region's vitality." Dermody, which has experience developing logistics and distribution centers for brands like Amazon, Walmart, Aramark, Pepsi-Cola and more, will call the facility LogistiCenter at I-95 Wilmington, fitting into its brand of Class A facilities. In announcing the acquisition, Dermody President Douglas A. Kiersey Jr. called the project a "very important investment." "The project provides scale in one of the country's most important logistics corridors and one that is a key focus for our customers," he said in a statement. Local developer Harvey Hanna said that it hopes Dermody's presence will jumpstart their plans for the site. "Harvey Hanna's ultimate goal for the former GM plant property has always been about one thing – returning long-term, sustainable jobs to Wilmington and New Castle County," said Thomas J. Hanna, president of Harvey Hanna & Associates, based in Newport, in a statement. "By working with a respected, experienced and best-in-class national developer like Dermody Properties, we are ensuring that a truly first-class business and distribution campus will rise in its place. Most importantly, with this arrangement with Dermody Properties, we are dramatically accelerating the timeline at this site towards delivering jobs and creating a new economic engine for Delaware. New Castle County, Delaware, is open for business." When GM closed its plant in July 2009 after 62 years, it represented the end of an economic engine for the Newport area which at its peak employed more than 5,000 people. Hopes were raised just three months later though when startup Fisker Automotive announced plans to build its all-electric cars at the plant that was previously home to Chevrolets. The federal and state governments approved loans and grants to the company to produce its second-generation cars at Boxwood. Those dreams were dashed, however, when the company filed for bankruptcy just four years later after its battery maker also went under and the automaker failed to fulfill terms of its loans. Chinese company Wanxiang America purchased Fisker's assets for $149 million at a December 2013 bankruptcy auction. In late 2017, Harvey Hanna purchased the property from Wanxiang and submitted a redevelopment plan to the county last year. After initially attempting to reuse the existing manufacturing plant, the developers decided to raze the facility to prepare for a new distribution warehouse. An economic development study commissioned by Harvey Hanna concluded that the project would produce more than $281 million in annual impact, largely through the creation of more than 2,100 permanent jobs in logistics, distribution, engineering, transportation and an array of support industries and services. The project would also create another 160 jobs annually over an estimated nine-year construction period. According to the study, construction of the new business and distribution campus would generate a total of $6.8 million in taxes for the state of Delaware. Once completed, Boxwood would also generate more than $7.6 million in annual revenue through personal and business taxes, as well as $2.4 million in new property taxes annually for the Red Clay School District and New Castle County. By Jacob Owens jowens@delawarebusinesstimes.com

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