n article about the expansion of Blue Cross Blue Shield of Delaware in Wilmington. Also there's some general information about the CBD office market. The subtitle is a bit
of an exaggeration; its only a 6 story addition on top of a garage.
Blues Near Decision on Move
Delaware Avenue Choice Could Change Look of Whole City
BY MAUREEN MILFORD / The News Journal
Blue Cross Blue Shield of Delaware, the state's largest health insurance company, is expected to reach a decision in a few weeks that could paint Wilmington red.
The Blues have been negotiating since the summer for a new headquarters in the city. One possible location is a new structure at 800 Delaware Ave. near I-95, an area on the western end of the central business district that has been experiencing a revival in the past year.
Richard V. Pryor, the city's economic development director, said negotiations on the deal for the Delaware Avenue site are winding up.
"I know it's not done yet, but I'm optimistic," Pryor said.
Timothy J. Constantine, president of Blue Cross Blue Shield of Delaware, now at 14th and Orange streets, said in a statement the insurance company expects to reach a final decision in mid-October.
"Until that occurs, there is no decision and our corporate policy prohibits any response to speculation," Constantine said.
Should the Delaware Avenue location win over the Blues, it would mean 650 workers moving to the area as soon as the headquarters is completed, Pryor said. Four hundred of those employees would be new to the city, he said. The city is working on an incentive package.
Besides the boost in population, a move by the Blues would mean two high-rise office structures under construction within a few blocks of each other at that part of town. Since the boulevard serves as the gateway to the city from the west, a change in the skyline there will provide a thriving vista to visitors, experts said.
"It says 'hello' to Wilmington the way you want it to," said Leigh Johnstone, senior vice president with Grubb & Ellis real estate services company in Wilmington. "It's a vibrant entrance to downtown."
The other new building under construction -- the first multitenant building to be constructed in the city in decades -- is at 500 Delaware Ave., between Jefferson and Washington streets. Buccini/Pollin Group Inc. is constructing a $90 million glass tower that will be called WSFS Bank Center. WSFS will be a major tenant, along with the law firm of Morris, James, Hitchens & Williams when the building is completed in the fall of 2006.
In addition to this development, significant money has been sunk into existing structures. ING Direct, the country's fourth-largest savings bank, spent about $15 million in 2004 to renovate the former Chase Manhattan Building at 802 Delaware Ave. The renovation included the development of one of the bank's Internet cafes on the ground floor facing the avenue. Moving toward Rodney Square, Brandywine Realty Trust is renovating 300 Delaware Ave., Johnstone said.
"The way I see it is ING set the tone," said Christopher Buccini, a partner in Buccini/Pollin. "Everyone used to say the ING site was a suburban location with city wage tax. But when ING came in and spent about $100 a square foot to turn it into a class A building, it became the book-end."
Ernest F. Delle Donne, president of Delle Donne & Associates, the real estate development firm that owns the potential Blue Cross Blue Shield site, said the ING building is an indication of the kind of tower that should be on Delaware Avenue.
"I love having ING and WSFS as neighbors," Delle Donne said.
Though Delle Donne would not comment on the Blue Cross Blue Shield deal, real estate agents and city officials said the building would be constructed on top of a garage that was built in 1995 with the Wilmington Parking Authority. The construction is an addition to the existing 10-story structure at 800 Delaware Ave. that has been owned by Delle Donne since the early 1980s.
And Delle Donne has said he plans to spend $35 million to build a 170,000-square-foot addition to his existing building. The addition would be glass and polished granite, he said.
The boost in development in Wilmington's uptown alleviates fears that the Christina River waterfront would cannibalize the office market near Rodney Square. This was particularly true after the Riverfront began to see more office development, including the construction of the headquarters for AAA Mid-Atlantic.
Still, city officials and real estate agents said the purchase of MBNA Corp., the state's largest private employer, by Bank of America remains a wild card for the downtown office market. The $35 billion sale is expected to be completed later this year or early next year.
MBNA is the largest corporate owner of real estate in the city, with 1.3 million square feet of space or roughly 14 percent of the office space in the central business district, experts estimate. Altogether, MBNA occupies 4.6 million square feet of space from Greenville to Dover.
Its sale to Bank of America is projected to result in the loss of 6,000 jobs nationwide from the combined companies. The companies haven't said how many cuts will occur in Delaware, but some analysts have predicted there could be 3,000 or more. The loss of jobs could result in excess real estate for the new Bank of America Card Services.
Many are wondering if a big divestiture of MBNA real estate could slow the economic momentum that's been building in the city for the past three years. Gerard H. Sweeney, chief executive of Brandywine Realty Trust, a real estate investment trust in Plymouth Meeting, Pa., that owns several office towers in Wilmington, said the MBNA takeover creates a level of uncertainty that will affect its thinking regarding the construction of an office building in the Christina Gateway section of the city.
"We're all waiting for this elephant in the room: Bank of America's purchase of MBNA," Pryor said.
Johnstone of Grubb & Ellis predicted that it will likely take Bank of America some time to figure out its real estate needs. If it should decide it has excess space, he expects the company will put one stand-alone building on the market at a time.
"It doesn't do them any good to dump a lot of space on the market," Johnstone said.
The article is wrong about the last multi-tenant building being built 10 years ago. All of MBNA's buildings are owner occupied. The last multi-tenant to go up was Three Christina Centre in 1989!
Here's the rending of the new BCBS of Delaware building (the garage is existant):
It's really too bad Delle Donne won't reface the garage, but I suppose since its owned by the Wilmington Parking Authority they (WPA) would have to do it.
The last blurb in bold refers to this project in development: