Hotel du Pont parking lots sold to Buccini/Pollin

DuPont has sold its three hotel parking lots to the Buccini/Pollin Group, both companies have confirmed.

The Hotel du Pont lots, identified as the Carpark properties, total 496 spots.

Buccini/Pollin acquired a parking garage on Orange Street, between 11th and 12th streets, and two surface lots. One surface lot sits on Orange Street between 11th and 12th streets while the other is located on the corner of Orange and 12th streets. The two surface lots are separated by the Wilmington Club's parking lot, which is not impacted by the sale.

DuPont has owned the lots since the 1950s, according to company spokesman Dan Turner. He said the hotel has reserved spots in the three lots for guests. The lots house the hotel's valet parking, monthly parking for area commuters and space for guests of the Hotel du Pont and its restaurant.

Terms of the transaction, which closed on March 31, remain confidential. DuPont does not release revenue figures for the parking lots.

"DuPont continually reviews its portfolio of assets to determine ways to increase shareholder value," Turner said in a released statement. "We are open to divesting assets if appropriate value can be received for shareholders. This agreement represents a strategic and mutually beneficial business decision for DuPont and the Buccini/Pollin Group."

The transaction has fueled further speculation that it could be a precursor to DuPont finding a buyer for the hotel. Turner said DuPont is "open" to the possibility of selling the hotel.

"We have been and remain open to divesting the property if appropriate value can be received for shareholders," he said.

For DuPont, the parking lot sale allows the company to shed some non-core assets. Activist investor Nelson Peltz, who leads New York hedge fund Trian Fund Management, has called on DuPont to divest between $2 billion and $4 billion of excess corporate costs.

Peltz has claimed the Hotel du Pont, theater and country club account for a portion of the excess costs. DuPont does not release revenue figures for either properties.

In February, DuPont contracted with the Grand Opera House of Wilmington to manage the theater.

Peltz initiated a proxy contest earlier this year to place four directors, including himself, on DuPont's board. If DuPont shareholders elect the Trian candidates, they could lobby to divest the hotel and country club as well as split the company into two separate entities.

Sheryl Kline, chair of the University of Delaware's Department of Hotel, Restaurant and Institutional Management, said it is unusual that DuPont owns and manages its own hotel. She said most hotel owners usually farm out property management to another company.

"In the United States, most companies like DuPont don't manage their own hotels," she said. "It's a unique situation because the DuPont family has strong ties to the hotel and the company has run it successful for many years."

The sale gives Buccini/Pollin prime parking spaces near two downtown office buildings it owns – the I.M. Pei Building at 1105 N. Market St. and the Nemours Building at 1007 N. Orange St.

"I think the fact that the lots are approximate to two of our significant assets was part of interest in the project," said Michael Hare, senior vice president for development at Buccini/Pollin. "We believe they are well-performing assets and parking demand is a big issue in the city."

Hare said he does not anticipate Buccini/Pollin will make any significant changes to the lots.

"One of the biggest challenges to attracting employers to the city is parking approximate to their offices," he said. "This a strategic decision and an important one to preserve these lots for parking."

Contact Jeff Mordock at (302) 324-2786 or jmordock@delawareonline.com.