After corporate exodus, city fills with apartments

After a 10-year exodus of banking and chemical jobs from the big buildings around Wilmington's Rodney Square, in defiance of the every-other-day shootings in neighborhoods farther out, new and rehabbed apartment projects keep rising in Delaware’s mini-metropolis.

In particular, Buccini/Pollin Group, which owns hotels from New York to Texas, has boosted its bets on partner-brothers Rob and Chris Buccini’s hometown. 

"There's 2,000 people living downtown that were not here 10 years ago. There will be 2,000 more in 18 months," said Rob Buccini, ticking off his firm’s projects:  Two hundred HUD-backed apartments and a 500-space parking garage on Orange Street; a $175 million project to add 180 apartments, and renovate restaurants, stores, Chemours Inc. headquarters space, the ornate 217-room Hotel du Pont and the 1,200-seat Playhouse, all in the million-square-foot ex-DuPont Building; and hundreds more apartments on the stone foundations of the ruined Bancroft Mills that line the Brandywine at the north end of town.

Plus, dozens of properties the group is rehabbing around the three theaters and the restaurants they own on half-empty downtown Market Street; a second hotel they plan for the Navy Yard-like Christina River district that already hosts offices, restaurants, stores, a convention center, a ballpark and an Imax theater; and hundreds of mid-rise apartments to replace half an office park (Concord Plaza) they are demolishing on U.S. 202 north of town, on the way to growing Glen Mills, Pa.

The city’s new mayor, long-ago New York Giants and University of Delaware Blue Hens running back Mike Purzycki, insists the downtown, where projects have long been subsidized by government programs and private foundations, is reaching a critical mass to draw outside private investment. “We need another 1,000 people to attract more bars and restaurants,” he told me in his French Street office.

"We've been adding 200 to 250 apartments a year in Wilmington for the last five years,” before the recent acceleration, Chris Buccini said at the Starbucks at Seventh and Market.  If the city projects get built as planned, Buccini properties will account for nearly 10 percent of Wilmington’s 26,000 total housing units, and one-sixth of its apartments. Call the burg "Buccini Town."

The mayor is a Buccini booster, even though the brothers backed the incumbent before they thought Purzycki might win. The Buccinis knew him from his help seeking state aid and loan guarantees for their riverfront projects in the mid-2000s. A top Buccini aide, Michael Hare, became a Purzycki campaign manager.

Rob Buccini said Wilmington politics, with its tight contribution limits, is more affordable for developers with an “interest in public policy” than Pennsylvania, where politicians “are always calling you and asking for 10 grand; it’s insane.”

The Buccinis "deserve the credit for being the prime developer in the city," said Steve Clark, chief commercial banking officer at WSFS Bank, the largest based in Delaware. "From the riverfront, their success is now coming up Market Street toward the central business district."

M&T Bank, Delaware’s dominant lender since it bought the failing Wilmington Trust Co. in 2011, also is backing Buccini projects, said Nick Lambrow, its Delaware region president.

Other Buccini lenders include New York’s Ladder Capital, which has financed Trump projects.  

Why the speed-up now? Chris Buccini said Purzycki helped by changing the tone of the city's licenses and inspections department from "adversarial" to “economic development-oriented” fast service: "Now, they feel like part of our team."  

There's more going on: Wilmington has benefited from the same trends lately pushing apartment, hotel and restaurant-and-retail projects in such  ex-industrial towns as Baltimore and Pittsburgh, said Anirban Basu, CEO at Baltimore-based economic-consulting firm Sage Policy Group. Banks and investors turned off by high prices in New York, or even Philadelphia, are backing deals in these next-tier cities, where some property values remain depressed below historic highs. 

As with Philadelphia, whose population is 20 times Wilmington's 80,000, "there are two Wilmingtons," says Basu: a "beautiful downtown that is having a devil of a time filling its office space and retail vacancies," as well as a "high crime" outer city of youth shootings and witnesses who won't talk to police. 

The downtown is drawing not just locals and retirees seeking affordable flats, but also commuters – Wilmington, at the center of the DART bus routes, enjoys Amtrak and SEPTA train service. In Maryland, MARC is considering a line.

But it’s not a mecca for a lot of recent college grads, who prefer Philadelphia and other big cities. "I sure went to New York, when I was that age," said Rob Buccini.

Some downtown believers are veterans of merged or downsized companies — people such as Jim Stewart, a former top aide to Richard Vague, a Wilmington credit-card marketing mogul turned Philadelphia investor-philanthropist. Stewart stayed in Wilmington after card-employer growth peaked, and now runs Epic Research, a marketing consultant whose clients have included Apple. Two Delaware-based start-ups, Marlette Funding and Swift Capital, each employ more than 100. “Wilmington has more credit marketing and analytics people than anywhere,” Stewart added.

“Nobody’s coming here and hiring hundreds and thousands like the banks did in the '90s,” Stewart told me. Instead, ex-bankers have set up "virtual firms" with up to 50 employees, “a manageable size.” A state- and University of Delaware-backed lab at the DuPont Experimental Station west of town aims to draw scientists and engineers who left the shrunken chemical giant with big ideas.

The city also lures ambitious professionals leaving New York and other pricey centers. Robert Herrera, a former Manhattan architect, now runs the Mill, a home for start-up firms in another former DuPont Co. office building owned by the Buccinis. “I can’t believe I can walk three blocks from here and be home,” Herrera told me as he checked his latest tenant fit-out, a narrow, high wooden bench studded with communications ports.

Outside on Market Street, Bryan and Andrea Sikora unpacked their car with supplies for their restaurants, La Fia and the Merchant Bar. They are looking for additional locations in town, Bryan told me.

The Buccinis had a wild ride with their mid-2000s hometown projects. Picked by future-Mayor Purzycki’s development group to build townhouses near their parents' sheet-metal business on the city's south side, the group outlasted objections from those residents who said they were being bullied. But buyers for units in their 25-story tower disappeared in the 2008 recession, and they had to sell units at auction, with deep discounts.

“Auctions are no fun. Rob promised me, ‘Never again. No more high-rises,’ ” Chris Buccini said.

“So instead, I dug that parking garage,” with apartments all around, Rob cracked. (For the record, they aren't ruling out future high-rises.)

It’s not all Buccinis who are building, Mayor Purzycki noted, citing apartments planned by local developer Louis Capano Jr. and a hotel project proposed by the owner of Big Fish Grill and its Pennsylvania partners. 

“This city already has all the difficult stuff: the location, the infrastructure, the proximity," Rob concluded. "We really believe it’s starting to turn.” 

Source: Philly.com