Where steel and autos were made, builders plan warehouses for digital America

The former General Motors car factory on Boxwood Road near Wilmington, which has sat idle since the government spent millions in a failed attempt to turn it into an electric-car factory, will be leveled and turned into 3 million square feet of warehouses and shipping centers, where up to 2,500 logistics workers, packers, and truckers will labor daily, under a proposal developer Harvey Hanna & Associates sent local officials Friday.

New Castle County officials said they would “fast-track” the proposal: They intend to approve a final plan in months, not years.

The 142-acre GM complex, which was down to a single shift making Saturns when it closed in 2009, employed thousands in the 1950s and 1960s, when vehicle, oil, and chemical plants were major regional employers. Blue-collar immigrants from Europe, the South, and the Caribbean, including future reggae star Bob Marley, worked the assembly lines at the GM complex; their union paychecks sustained neighborhoods in Wilmington and its western suburbs.

Now, the industrial wrecks lining I-95 are in line “to become one of the most sought-after corridors, from a fulfillment and distribution standpoint,” says Thomas J. Hanna, whose family firm has been redeveloping former steel and chemical properties in the area since the 1990s. “As more consumer purchasing goes online or is made via e-commerce outlets, the need for distribution space continues to rise,” and shippers who want faster delivery are finally siting logistics plants closer to cities. He says plans for hazardous-materials remediation, demolition, and construction of five proposed buildings could cost up to $250 million.

Camera icon Harvey Hanna
Tom Hanna, who grew up in his family’s waste-management business, redevelops former heavy-industry sites along the Delaware and Christina Rivers. He wants to build 3 million square feet of logistics space at the former Boxwood Road GM plant, which shut in 2009.

Gulftainer Corp.’s plan to build a $582 million container port at the former DuPont Edge Moor site down Del. 141, under a new contract with the Port of Wilmington, makes Boxwood Road extra attractive to shippers, Hanna added.

Since the first dot.com shopping sites in the 1990s, big warehouse operators including Amazon, Walmart’s Jet.com, Urban Outfitters, QVC, and other online retailers have built most of their million-square-foot warehouses, many employing 1,000 or more, in small towns and rural areas. But recently, the expansion of food and pharma delivery services has sparked interest in smaller centers closer to metro areas, Hanna says.

GM isn’t the only area heavy-industry site that’s being marketed for warehouses and delivery logistics centers, as the digital economy upends old distribution patterns. The Claymont Steel mill, sheds, and chimneys that towered over the Delaware River, I-95/495, and rail lines before they were closed by Russia-based owner Evraz Steel in 2014, have been leveled and trucked away by crews from Commercial Development Co. of St. Louis and its affiliate, Environmental Liability Transfer Inc. The company has donated 12 acres for an expanded Claymont SEPTA-DART station and parking, making the site more attractive to employers, says executive vice president Stephen Collins.

Besides warehouses, proposals for the 413-acre Claymont site also call for retail stores, a hotel, and up to 1,000 residential units along Naamans Road, said Collins, who is trying to sell those ideas to developers. We recently toured the site’s fields of flattened rubble and second-growth woods, home to deer, foxes, and hawks, studded with stone bridges and tunnels, rocky creeks, and tree-grown river piers. The two-story former steel company office has been sold to Gaudenzia House, the drug recovery centers.

Collins’ company is also scouting warehouse and logistics users for the former Budd Co. (Teva) site in far Northeast Philadelphia, the Glidden paint factory in Reading, and the ex-Congoleum works near Trenton, among others.

State and county governments are applauding Boxwood’s “reemergence as an anchor of growth and job creation,” Matt Meyer, elected county executive for New Castle County, where most Delaware residents live, told me. He said officials are also pleased with the interest in Claymont as a “very low-cost” distribution center.

Camera icon Joseph N. DiStefano
Stephen R. Collins, a onetime Illinois city manager, is executive vice president of Environmental Liability Transfer Inc. of St. Louis, which is preparing the former Claymont Steel Co. on the Delaware River, the former Budd Co. site in Northeast Philadelphia, and the ex-Congoleum works in Trenton for warehouse and other redevelopment.

Hanna plans five warehouses totaling 3 million square feet at Boxwood Road. A million square feet is about the size of each of Philadelphia’s Liberty Place or Comcast towers.

The Harvey Hanna company already operates three nearby industrial developments. The largest, Twin Spans Business Park, lies north of Delaware’s sleepy colonial capital of New Castle and close to the Delaware Memorial Bridge connecting I-95 with the end of the New Jersey Turnpike. Tenants include Philadelphia Gear Co., formerly of King of Prussia, now part of Timken Co.; online tire giant Tire Rack; and the Speakman and Zenith plumbing distribution centers. Amazon Inc.’s first East Coast warehouse is nearby; one of that company’s largest warehouses is in Middletown, Del., south of I-95.

Besides its location in the center of the densely populated Northeast, Delaware’s “property taxes and occupancy costs, when you add them up, are only around 60 percent of what you would pay in Southeastern Pennsylvania or New Jersey,” since most of the state has no municipal government below the county level, and there is no retail sales tax, Hanna said. Labor and insurance costs are also competitive, and the government has a pro-business record, he added.

 

Camera icon Joseph N. DiStefano
Commercial Development Co. Inc. has leveled the 100-year-old steel mill and other structures at the 413-acre former Claymont Steel Co. site on the Delaware River south of the Pennsylvania state line, and is shopping the property for warehouse, industrial, and retail users and residential developments. SEPTA and DART plan to move the nearby Claymont train station onto the property and expand parking.

While regional unemployment is low, Hanna says he’s heard from ex-autoworkers and their kids looking for better-paid industrial jobs. Nobody’s guaranteeing these jobs will pay better; but he figures more jobs is better than fewer. As if to prep for more workers, Buccini/Pollin Group is converting part of the former DuPont Co. headquarters, the Bancroft Mills site on the Brandywine, and half the Silverside office complex into apartments at what the builder calls competitive rents, by Philadelphia standards.

I asked how Hanna can make Boxwood Road stand out, when so many other ex-industrial sites are available. “There are 15 other states trying to woo these corporate clients,” he affirmed. “Delaware can distinguish itself if we can get these permitted and faster to market.”

Hanna is also trying to interest officials in reopening the former Newport station on the SEPTA-DART train line from Newark, Del., to Wilmington, Claymont, and Philadelphia.