$32 million apartments latest massive development planned along Christina River

The redevelopment of South Wilmington, long planned to mirror changes that occurred along the Christina River's northern banks, will be fueled in part by money from newcomers to the city.

Near the southern approaches of the Walnut Street bridge, across from the structurally troubled Christiana Landing townhomes, Washington Place Equities of Baltimore is planning to build the area's first new apartments in years. 

By the middle of 2021, the developer hopes to open the first of its twin 150-unit structures, called Riverhouse I and II, along A Street.

Subsequent construction on the second building will bring 300 new apartments to the geographically isolated area, which in 2010 had a population of just 8,000. 

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The 5-story buildings should be complete after the opening of a nearby $27 million wetlands park, and a $28 million Christina River bridge that connects to the Wilmington Riverfront. 

The projects add to a litany of other changes impacting the working-class Southbridge neighborhood, including the opening of a local bank and the arrival of a union training center.

While those developments and the wetland park are welcomed by Marie Reed, president of the Southbridge Civic Association, she is uncertain how the Riverhouse apartments could alter her adjacent neighborhood. 

Washington Place Equities officials have not contacted her neighborhood group to explain its plans, Reed said.

"We would have appreciated if they came to the community," she said. 

In 2018, Reed led community opposition to a planned industrial slag facility at a parcel in the neighborhood after previous efforts tried to put a state prison and a facility that would have temporarily housed cattle there.

Asked what attracted his company to South Wilmington, Washington Place Equities Vice President Dominic Wiker said the area will appeal to "people looking for a different type of location," given its proximity to the city's train station, to the river's edge, and to what will be the area's newest park. 

It also sits within an "opportunity zone," a federal designation that allows investors to avoid or delay paying taxes if they direct their investment dollars into specific "distressed" areas.  

Wiker said Washington Place Equities had been evaluating the South Wilmington area since before a 2017 tax bill created the opportunity zone designation.

Asked how his company would pay the apartment's $32 million development cost, he said "we have a good track record of bringing the right partners to projects." 

His company anticipates growth in "middle-market cities," such as Wilmington and those in south central Pennsylvania, he said.

Last year, Delaware officials targeted Baltimore with a publicity campaign designed to convince young professionals in the city to move 70 miles up Interstate 95 to Wilmington.

Opportunity in not-the-hottest market

For years, Wilmington's development, particularly along the Christina River and in downtown, had been dominated by the Buccini/Pollin Group.

But shifting trends have made Washington Place Equities at least the fifth out-of-state developer to make a significant commercial real estate investment in the city during the past two years. 

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Others include the purchases of the 11-story office building on 913 N. Market downtown, the Lincoln Square building on Lower Market, the 18-story PNC Bank Center, and the Chemours headquarters space within the DuPont building. 

Last year, California-based developer Brent Funston, the Lincoln Square purchaser, said he finds more opportunity on the East Coast, even as "it's no secret that it (Wilmington) is not the hottest market."

Among the challenges to developing along the Christina River in Wilmington is pollution left behind by its decades of use as a sprawling waterfront industrial area.

Prior to construction, Washington Place Equities must clean its 401 A Street property of heavy metals and other pollutants left behind from underground storage tanks. 

It purchased the parcel, and the neighboring 301 A Street, in October from an entity called Southbank Associates, LLC. Records show Wilmington realtor Hunter Lott as the president of Southbank Associates.

To pay for the cleanup, Washington Place Equities is eligible for a state grant of up to $200,000. So far, taxpayers have spent more than $80,000 investigating the extent of the contamination, according to the Delaware Department of Natural Resources and Environmental Control. 

Pollutants within the soil include arsenic, manganese, and thallium. Found in the groundwater was arsenic, cobalt, iron, manganese and mercury.  

"Under current site conditions, a future residential use for the property is unacceptable," said DNREC spokesman Michael Globetti. 

An environmental consultant investigated soil at the 301 A Street property for similar contamination, but DNREC has not yet received the findings, Globetti said. 

Despite past pollution, Wiker is confident in the long term potential of his company's apartment development. Wilmington apartments have been filling up as cities generally become more attractive, he said.  

Also, there's the new span to the Wilmington Riverfront, the city's newest neighborhood that features ample parking and numerous restaurants. 

"We're very excited about the bridge that's connecting back over to the Riverfront," Wiker said. 

Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.