Request for Proposal

REQUEST FOR PROPOSALS

FORMER RITE AID SITE
801 N Market St., WILMINGTON, DELAWARE

storefront

storefront

*Deadline extended to May 31, 2021*

SUMMARY PAGE

The Wilmington Urban Development Action Grant Corporation (UDAG) is seeking proposals for development of a 0.239 acre parcel at 801 N Market St., Wilmington, Delaware.  The property is zoned C-3 for commercial use.  The former use of the site was commercial and the site is located in the historic Market Street Mall district.  The preference is mixed-use but other proposals will be considered.  Proposals must bring the existing historic structure to-code with 100% of the interior space programmed.  Proposals will be ranked by a selection committee based on factors such as purchase price, proposed use, capacity, experience and financing.

All documents related to the RFP are posted here: www.choosewilmingtonde.org/site-selection/RFP

Proposals should be addressed to:

Wilmington UDAG
Louis L. Redding City County Building, 3rd Floor
800 N French Street, Wilmington, DE 19801
Or email: sjpark@wilmingtonde.gov

The schedule for the RFP is:

Request for proposals (RFP) issue date:
April 20, 2021

RFP response due date:
May 31, 2021, 4:30 PM

Respondents notified:
Approximately   June 30, 2021.

I.  BACKGROUND AND DESCRIPTION OF THE SITE

801 N Market St., Wilmington, Delaware (Tax Parcel No. 26-035.20-095) comprises 0.239 acres of land that has been historically used for commercial purposes. The property has public water and sewer service supplied by the City of Wilmington. 

There is one significant building on site with 2 floors and a basement. The total area on the first floor is 10,110 gross square feet, total area on the second floor is 10,130 GSF, and total area in the basement is 10,770 GSF. In total, there is a combined total of 31,010 square feet combined in the basement, first floor, and second floor sections (See “Section I.D - Historic Preservation Issues.”).

 

The site is owned by the Wilmington UDAG, having been acquired in 2020 from Rite Aid Corporation, which purchased the property in 1982.  Wilmington UDAG is a 501-C-3 organization whose mission is to “stimulate new, increased private investment … revitalize the local economy and reclaim deteriorated neighborhoods in the City…”

The site has excellent transportation access - it is located less than one-half mile from a full interchange with US 202 and I-95. In addition, the site has public transportation options with Amtrak and

All documents related to the RFP are posted here: www.choosewilmingtonde.org/site-selection/RFP

I.A - Zoning and Land Use

The property is zoned C-3 which accommodates office and commercial uses, including “Central Retail,” such as wholesaling operations, light manufacturing operations incidental and secondary to a retail store or service, consumer recycling collection centers, and any use permitted in C-2 districts. Building regulations in a C-3 zone include the following:

Requirements

 

Building height 15 stories or 180 feet

Floor area ratio

6.0

Setback lines

None

Rear yards

10’ for a height up to 35’ above the grade along the rear wall, plus 3” for every additional foot above that level

 

Adjoining land uses are primarily: commercial/retail, residential, and civic along the Market Street Corridor. Zoning along the Market Street Corridor reflects the multi-use with neighboring areas zoned C-3, C-2, or C-4 for commercial use, R-3 and R-5-B, and “O” for open space in the neighboring public parks.Maps posted on the RFP website include: site environmental assessment (Brightfields); City zoning; County zoning; and several aerial maps.

I.B - Environmental Issues

Environmental documents related to the site are filed on this website. The site is in the Hazardous Waste Generator program subject to a Delaware Department of Natural Resources and Environmental Conservation (DNREC).  The regulatory status of the site changed on May 24, 2018 from “Conditional Exempt Generator” to “Not a Generator”. On December 3, 2019, one 2,000 gallon Underground Storage Tank (UST) was closed in place on site. DNREC Tanks Compliance Branch reviewed all documentation concerning UST removal including soil samples tested for petroleum contamination. DNREC concluded that any residual contamination poses no threat to human health and safety, and to the environment, and No Further Action (NFA) is required. The sites may be used without restriction.

I.C - Historic Preservation Issues

An assessment of historic significance was performed by Buck Simpers Architects and Associates in 2020.  The findings as well as a number of pictures of the building on site are posted on the RFP website.  The Buck Simpers Architects and Associates report is summarized as follows:

The most significant and oldest building at the complex is the c 1917 Mission/Colonial Spanish Revival style Building One.  According to Philadelphia Record and Builders’ Guide, the architect for the project, at least until 1917 was Robeson Lee Perot…  The complex stands as an isolated example of Mission/Colonial Spanish Revival style…  The high level of integrity…, as  well as the knowledge of the original architect, result in the architectural significance of (building one) as a good example of the Mission/Colonial Spanish Revival style… 

801 N. Market St. is home to the Kresge Building, a Historically Registered Landmark in Wilmington. This property is located in the heart of Wilmington’s Historic Commercial District, which is located within the Central Business District.

The site of the Kresge Building was previously home to several historic structures, including the Wilmington Institute, Goldey College, and even a residence of US Constitution signer John Dickenson.

The building was likely designed by Joseph Sexton, the S.S. Kresge Company’s staff architect. It consists of two-stories as well as a basement. The structure is primarily a steel frame with wood floor and roof joists, and load bearing exterior masonry walls. The facade is of the Commercial style with some classical ornamentation. The building features iron spot orange brick, limestone accents and a decorative copper cornice.

In the 1950’s Delaware saw the rise of its first suburban shopping malls. This led to many consumers moving out of the cities and into the suburbs. The S.S. Kresge Company closed many urban stores at this time. The 801 N. Market St. location likely closed at this time as well. As time passed, the S.S. Kresge Company would soon change its name to the Kmart Corporation.

In the 1980’s Rite Aid purchased the property and occupied the building until 2019.

The Buck Simpers Architects and Associates report is available on the RFP website.

The Wilmington Urban Development Action Grant Corporation received approval from the Design Review and Preservation Commission at its February 2020 meeting in case DR-1639, Resolution 02-20 to make significant improvements to this strategically located two-story commercial building, formerly a Rite Aid store.

I.D – Potential Financial Incentives

The following are the principal state and local incentives connected to brownfields and historic preservation:

I.D.1. Historic Tax Credit – Renovation of the building on site would be potentially eligible for a 20 percent federal tax credit and a 20 percent state tax credit.  Note the State program has an overall cap of $5 million, annually; credits are awarded on a first-come-first-serve basis.  The State credit is fully transferable, making it potentially useful to non-profit entities.  There is more information on the DHCA website: http://history.delaware.gov/preservation/taxcredit.shtml

I.D.2 - City of Wilmington Tax Abatement for Historic Properties.  City property taxes can potentially be frozen at the pre-rehabilitation level for 10 years.  The tax abatement requires application first through the Department of Planning, and documented rehabilitation according to the Secretary of the Interior’s Standards.  See: http://www.ci.wilmington.de.us/docs/25/tax-abatement-for-historic%20properties.pdf

I.D.3 – Delaware brownfields grants and loans.  Delaware has three brownfields grant and loan programs that are potentially useful for the site: Brownfields Revolving Loan Fund (BRLF); Hazardous Substance Site Cleanup Loan Program (HSSCLP); and the Hazardous Substance Cleanup Act Brownfield Grants (HSCA Brownfield Grants).  Note at this site, DNREC will only contribute funds that support cleanup to a restricted use.  For more information, go to:  http://www.dnrec.delaware.gov/whs/awm/SIRB/Pages/SIRBLoansGrants.aspx

I.D.4 – Delaware Tax Credit and License Fee Reduction for Creation of Employment and Qualified Investment in Targeted Areas.  The program provides for a job-creation tax credit in distressed areas and for redevelopment of sites owned by governmental and non-profit entities. Brownfield sites are eligible for an extra $150 per job over and above the standard $750 per new job.  For more information see: http://delcode.delaware.gov/title30/c020/sc03/index.shtml

I.D.2. Downtown Development District – Renovation of the building on site would be potentially eligible for the Delaware State Housing Authority’s Downtown Development District program (DDD). The DDD Rebate program provides cash rebates to Qualified District Investors that make a Qualified Real Property Investment within the boundaries of a District. Rebates are performance-based; therefore, investments are required to be completed, paid in full and placed-in-service prior to rebate application. Investors are eligible for rebates of up to 20% of the Qualified Real Property Investment. There is more information on the Delaware State Housing Authority’s website: http://www.destatehousing.com/Developers/dv_ddd.php

II.  SUBMISSION REQUIREMENTS

All submittals must include the following:

II.A – Proposal Narrative (no more than 20 pages)

  1. Provide a brief project summary.
  2. Identify the proposing entity/entities, including any identified project partners, including environmental consultants and architects (building contractors should not be listed).  Include contact information for a single point of contact.
  3. Describe the qualifications and experience of the principal development entity and each of the project partners.  Responses should reflect experience in similar sites and redevelopment projects.  For each project or relevant experience provide a name, phone number, and email of a contact person familiar with this project who can act as a reference.
  4. Identify individual project team members and their qualifications.  Designate the percentage of each person’s time that is potentially available to the project.
  5. Provide a detailed description of the redevelopment proposal by responding to each of the criteria listed in Section III.
  6. Describe how the proposal will address remaining brownfields/environmental issues.  Note the proposal must meet the following requirements:
    1. Enter the property into the DNREC brownfields program under a Brownfield Development Agreement.
    2. Perform appropriate due diligence, using a certified environmental consultant, and leading to a DNREC Certificate of Completion.  This would involve, at a minimum, a Phase I site assessment according to the “All Appropriate Inquiry” guidelines. 
    3. Agree to follow the requirements of either: the recommended Operation and Maintenance (O&M) Plan cited above (EA Engineering); or developing a revised O&M Plan.  Note the current O&M plan is for a generic restricted use and would need to be revised for an unrestricted use.
    4. If proposing a restricted use, agreement to meet DNREC’s requirements for institutional controls.  DNREC’s requirements for institutional controls are contained in the standard “Environmental Covenants,” which are posted here:  http://www.dnrec.delaware.gov/whs/awm/SIRB/Documents/EnvironmentalCovenant.doc.
    5. If proposing an unrestricted use (see definitions in Section I.C.3), the respondent must accept responsibility for the additional remediation that will be required to achieve the DNREC approvals for unrestricted use. 
  7. Describe the plan for management of any undeveloped open space on the property.
  8. Specify a purchase price offered for the property.  Include a brief narrative of the methodology used to determine the purchase price.  (See Ranking Criterion #5)
  9. Provide a schedule for development: proposals must commit to beginning development within six months of receiving necessary environmental and land use approvals.  Subsequent requests to revise this schedule may be considered if justified based on documented market conditions;
  10. Describe the proposed financing for the project, including a sources and uses chart.  Costs should be broken down to include at least: site acquisition, remediation, site preparation and demolition, infrastructure, building rehabilitation, new construction, financing costs, and carrying costs.  Financing sources should include the amount and status of each of the following: equity commitments; projected private lending; any governmental incentives; and, if necessary, public sector costs for infrastructure.  (Note, if the site plan proposes accessing the site from Baynard Avenue, the Wilmington UDAG will propose a City capital improvement to extend Baynard Avenue to the site.) 
  11. A statement of the principal development entity’s policy regarding diversity and inclusion in the workforce.

II.B – Attachments

  1. For the principal development entity, the names and affiliations of corporate officers, principal stockholders, board of directors, and/or general and limited partners;
  2. A sketch plan of the proposed development on the site including the proposed use of all land;

(Elevation drawings and/or photographs indicating the style of buildings proposed are optional)

  1. Other documents that give evidence of financial capability to complete the project;
  2. Resumes of principal project team members, not exceeding 3 pages each.
  3. Other documentation such as commitments or letters of interest from financing sources.
  4. If applicable, an explanation of any litigation, fines, or penalties that might reflect on the respondents ability to carry out the proposed project.  

III. RANKING CRITERIA FOR RFP REVIEW

Proposals will be ranked according to the following criteria:

  1. Preferred land use – Given that the area surrounding the site consists of primarily residential and park uses, the City prefers uses that are complimentary, such as office, institutional, research, educational or training facilities, and neighborhood-oriented commercial services.  Other uses that are permissible in C-5 (warehousing, wholesaling, and highway-oriented retail) may submit proposals, but will be ranked lower on this criterion.  Note that the UDAG-DNREC agreement prohibits residential re-use.  (20 percent) 
  2. Financial Feasibility and Experience – Respondents should give evidence of qualifications and experience in similar projects, including the qualifications of consultants and development partners.  Respondents should document project financial feasibility by including information, such as: user commitments; lender commitments or indications of interest; owner or private equity financing commitments; and/or governmental incentivesAny governmental incentives listed should include information that supports the subject site as eligible for (and within any priority parameters) for the incentive.  If any speculative space is proposed, the respondent should include indicators of marketability. (20 percent)     
  3. Preservation – Proposals that include preservation of Building One will be ranked higher than proposals that raze the building or alter its historic character (15 percent)
  4. Environmental stewardship – Respondents should consider environmental stewardship and ranking will consider:
    1. Understanding of and compliance with the brownfields/environmental requirements in Section II, item 6.
    2. The extent to which the preferred construction alternatives in the RFP, which may affect the environmental remediation costs, are accommodated;
    3. Use of green building techniques and high energy efficiency standards for any new and renovated buildings;
    4. Preservation of some of the current wooded area and greening, landscaping, and/or pervious surface  that goes beyond code compliance and stormwater run-off requirements;
    5. The degree to the site plan is integrated with the wooded area, utilizing the wooded area in a manner that maintains the role of the wooded section as visually connected to the park.

 (15 percent)

  1. Proposed purchase price.  Respondents must indicate a proposed purchase price; reviewers will give weight to higher purchase price values.  Note that submission requirement II.A.8 asks for a narrative that explains how the purchase price was determined, and submission requirement II.A.10 asks for a sources and uses chart.  Reviewers will take into account mitigating factors raised in that narrative or itemized in the sources and uses chart.  There is not a current appraisal available for the property.  (15 percent)
  2. Other community benefits.  Benefits might include, but are not limited to:
    1. Economic benefits, such as construction and permanent new or retained jobs (with preference for “living wage” jobs) and attraction or retention of businesses.  Retail jobs will be ranked lower than office, research, or institutional jobs;
    2. Projected fiscal benefits to the City of Wilmington;
    3. Providing educational, cultural, or social services for residents;
    4. Architectural and design assets.
    5. Historically accurate renovation of Building One.

(15 percent)

IV. Other Requirements

  1. Warranty -- UDAG and the City of Wilmington and their respective officers, employees, and agents, make no representation or warranty and assume no responsibility for the accuracy of the information set forth in this RFP.
  2. Governing Laws -- Any agreement resulting from this invitation shall be governed by the laws regulations and ordinances of the State of Delaware and the City of Wilmington. 
  3. Assignment -- Any agreement resulting from this request shall not be assignable except with the prior written approval of the UDAG.
  4. Indemnity -- The respondent without exception shall indemnify, defend, and hold harmless Wilmington UDAG Corporation and the City of Wilmington, its officers agents and employees from liability of any nature, including cost and expenses arising out of or in relation to the respondent’s response to this RFP. 
  5. Compliance with Laws and Regulations -- Development team is expected to be familiar with and comply with all Federal State and local laws ordinances codes and regulations that in any way may affect the services offered by the Development team and shall comply with City zoning and building codes. 
  6. Incurred Expenses -- This invitation does not commit UDAG to make an award nor shall the UDAG be responsible for any cost or expense which may be incurred by any respondent in preparing and submitting a reply or any cost or expense incurred by any respondent prior to the execution of a purchase order or contract agreement.
  7. UDAG Rights – UDAG shall be the sole judge of each response’s conformance with the requirements of this RFP and of the merits of the individual qualifications and proposals. UDAG reserves the right to cancel or postpone the RFP.  UDAG reserves the right to waive any conditions or modify any provision of this RFP with respect to one or more respondents, to negotiate with one or more of the respondents, to require supplemental statements and information from any respondents, to establish additional terms and conditions, to encourage respondents to work together, to award one or more contracts pursuant to this RFP, or to reject any or all responses, if in its judgment it is in the best interest of UDAG and the City of Wilmington to do so. If all responses are rejected, this RFP may be withdrawn and the Site may be retained, and re-offered under the same or different terms and conditions.  All responses become the property of UDAG.

V.  RFP PROCESS AND SCHEDULE

V.A – Schedule

Request for proposals (RFP) issue date:

April 20, 2021

RFP response due date:

May 31, 2021, 4:30 PM

Respondents notified:

Approximately   June 30, 2021.

Post-RFP process:

UDAG board would then authorize staff to enter into negotiations for agreements with the selected firm.  Should staff be unable to negotiate a satisfactory agreement with the top ranked firm, negotiations with that firm shall be terminated.  Upon the execution of a Development Agreement, the awardee will commence due diligence to include, but not limited to, entering into the Delaware Department of Natural Resources and Environmental Control’s  Brownfield Development Program, City of Wilmington site plan reviews, Delaware Division of Historic and Cultural Affairs regarding historic tax credits, and project finance.   

V.A -- Logistics:

  • The following website will be the repository of all RFP-related documents:  www.choosewilmingtonde.org/site-selection/RFP
  • The RFP proposal must be received by UDAG before 4:30 PM on May 31, 2021.  The proposal should be BOTH emailed (with read receipt) and hard copy mailed (one copy, postmarked by 4:30 PM) to:

Wilmington UDAG
Louis L. Redding City County Building, 3rd Floor
800 N French Street, Wilmington, DE 19801
Or email: sjpark@WilmingtonDE.gov

801 N Market St Conceptual Design (BSA+A)
City of Wilmington Zoning Map
DNREC NFA Letter
DNREC UST Closure Report
New Castle County Zoning
Phase I Environmental Site Assessment