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8/16/2010
Developers bend NCCo code limits; Critics say redevelopment status used loosely for perks - News Journal

Developers bend NCCo code limits

Critics say redevelopment status used loosely for perks

By CHAD LIVENGOOD
The News Journal

To encourage developers to turn decaying brownfields and abandoned buildings into productive properties, New Castle County has modified its land-use plan to give certain projects a financial and regulatory break.

As recently as 2008, the County Council tweaked the code. But instead of reclaiming eyesores, critics say, the county is greasing the way for developers who are turning functioning office parks and empty parcels into commercial sites.

In one case, a developer has proposed to build a Lowe’s home-improvement store, a restaurant and another big-box store on a piece of mostly undeveloped land at the corner of U.S. 40 and Del. 7 in Bear. Aside from a TD Bank on one end, the 32-acre lot is a greenfield that was never fully developed.

The new Lowe’s would be across the street from an old Lowe’s.

New Castle County is treating the project as redevelopment, a land-use status that comes with lucrative perks such as relaxed traffic congestion standards, higher density, fewer impact fees and a quicker approval process.

In this case, the property is an unsightly brownfield, hidden by overgrown weeds and a chain-link fence that guards storage lots for old recreational vehicles, boats, bulk mulch and chopped wood.

Planning board members say the redevelopment code was never intended to apply equally to run-down properties and vacant, undeveloped land.

"I don't like it," said Victor Singer, chairman of the planning board. "It bothers me that [the Department of] Land Use went along with this without a fight."

No rebuilding

By definition, redevelopment is supposed to apply to "vacant, abandoned or underutilized" property where more than half of a building is torn down and rebuilt for another purpose.

But Delaware developer DelleDonne & Associates' plan for the Governor's Square Commercial Center in Bear calls for keeping the bank building intact and adding new construction under the guise of redevelopment.

DelleDonne's proposal has drawn the ire of civic groups, neighboring businesses and planning board members, who will vote Tuesday on a rezoning request.

If approved, DelleDonne hopes to attract the existing Lowe's in the Eden Square Shopping Center across U.S. 40 into a bigger, more visible building.

"A lot of my customers that frequent here either work at Lowe's or are just coming from Lowe's," said Erin Davis, manager of the GNC store in Eden Square. "If they move, I would lose a lot of my customers."

Jim Collins, vice president of DelleDonne & Associates, said Lowe's approached the firm for a new home. "We didn't go out looking for Lowe's."

Collins said DelleDonne is pursuing redevelopment after 22 years of unsuccessful attempts to build an office complex on the site.

At one point, Collins said, the developer poured the foundation for a building, but abandoned construction after it couldn't find a tenant.

Mark Dunkle, a Dover attorney representing Eden Square's owners, said DelleDonne's proposal is "a misuse of the redevelopment code."

Unlike most redevelopment, "nothing that's built out there is going to be torn down or remodeled," he said.

Collins said it's up to the Land Use Department to interpret the redevelopment code. "The matter is in their hands and we don't think it's appropriate to comment on the merits of the issue," Collins said.

Traffic issues

One of the big advantages for developers who qualify for redevelopment is the relaxation of traffic congestion standards.

A traffic study of DelleDonne & Associates' proposed development commissioned by Eden Square's owners suggests there would be 2.5 times more vehicles entering and leaving the site on weekdays if it had a Lowe's and another big-box retailer, such as a Kohl's department store. Those numbers compare the impact of 224,472 square feet of retail space versus the impact of 300,000 square feet of office space.

Collins said DelleDonne already has spent more than $1 million adding turning lanes off U.S. 40 onto Del. 7 and is starting construction of Songsmith Drive for access to the bank.

Dunkle acknowledges that his clients, Dick Cantera and Larry Gehrke, will suffer financially if their anchor store, Lowe's, moves across the road.

But the smaller businesses surrounding the home-improvement store may suffer, too, Dunkle said.

Leon Defulgentiis, owner of the Philly Pretzel Factory, said his business caters to Lowe's clientele.

"Contractors do purchase quite a bit of pretzels," Defulgentiis said.

Gerard Littlejohn, a spokesman for Lowe's, said the home-improvement chain doesn't "comment about specific sites we may be considering unless we have closed on all real estate matters."

Defulgentiis also worries about the traffic that two big boxes on the U.S. 40 commercial strip would generate for the Del. 7 intersection.

"That light's like forever to turn into this lot pretty much as it is," he said.

Unintended use

The redevelopment ordinance was designed to give developers incentives to reuse abandoned or underutilized properties, such as the former Parkway gravel pit, as a way to limit urban sprawl into the southern end of New Castle County.

"That's the sort of site for which the redevelopment ordinance is written," County Executive Chris Coons said of the gravel pit site in New Castle. "And I can understand where there are concerns of its application in other areas."

Coons, who has been involved in shaping the policy since its adoption in 2002, is now questioning whether aggressive developers and land-use attorneys are pushing the "boundaries of the code" for redevelopment status.

"Exactly how and where they're being applied is somewhat different than what I think was initially imagined," Coons said of the redevelopment code. "I don't think I can go one word past that."

Coons declined to speak further about the issue because of the threat of litigation against his administration.

Citizens for Responsible Growth, an umbrella civic group, is fighting a Pennsylvania-based developer's use of the redevelopment code to reuse the Barley Mill Plaza office complex at Del. 141 and Lancaster Pike.

CRG is threatening to sue the Coons administration for its interpretation of land-use laws that have, so far, favored Stoltz Real Estate Partners' application.

Stoltz also owns the former Parkway gravel site near New Castle, where it plans to build a 524,000-square-foot town center featuring shops, restaurants and an entertainment venue.

Stoltz is no longer CRG's only target.

On Friday, CRG's acting board chairman, attorney and former legislator Robert Valihura, sent a letter to the planning board, alleging DelleDonne's application "distorts and violates the fundamental scheme of the entire redevelopment ordinance" and urged the panel to reject it.

'Loophole'

Singer, the planning board chairman, said DelleDonne is exploiting a "loophole" in the code.

"All we have to do is find a parcel that is [partially] developed and then you can kiss the whole impact fee goodbye," Singer said.

Singer said either the County Council needs to address loopholes in the redevelopment code "or it will be cleared up by the courts."

Critics of the redevelopment code say it's been amended in recent years to help certain developers.

County Councilman George Smiley, a New Castle Democrat, sponsored the last change to the redevelopment code in 2008, adding extractive use sites -- such as gravel pits -- to the list of properties that qualify for redevelopment.

On March 25, 2008, the County Council approved Smiley's bill. Two days later, Stoltz filed plans to seek redevelopment of the Parkway gravel pit site, promising a $100 million investment and 1,300 new jobs.

The council approved the change on a 12-0 vote, with Council President Paul Clark abstaining.

Clark said he recused himself from the vote because his wife, Pam Scott, is Stoltz's lead land-use attorney.

Still, Clark says, the provision will benefit the redevelopment of other former gravel pits, not just the one owned by his wife's client.

On June 8, the council voted 11-0 to rezone the 59-acre parcel from industrial to commercial. Clark recused himself from that vote as well.

Campaign donors

Smiley has accepted campaign finance contributions from the Stoltz organization.

In September 2007, Smiley accepted a $600 contribution from developer Keith Stoltz. Scott's law firm, Saul Ewing, contributed another $400 to Smiley's re-election fund in 2007, campaign finance records show.

Smiley did not returns phone calls and an e-mail seeking comment about the provision he sponsored. Keith Stoltz declined to be interviewed; Scott could not be reached Sunday for comment.

But in an earlier interview, Smiley said he's bothered by complaining and pontificating about the redevelopment code.

"If you think it's flawed, then bring forward some changes and see if they fly or they don't," Smiley said.

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