Wilmington's Galleria Shoppes may undergo $40M remake

A Newark developer plans to tear down a retail center near Wilmington’s Little Italy neighborhood and build a new $40 million structure that includes shops, luxury apartments and a parking garage.

Flanked by Wilmington Mayor Dennis P. Williams and her attorney, new property owner Angela Tsionas of Tsionas Properties on Wednesday unveiled her plans for Galleria Shoppes at 2000 Pennsylvania Ave.

“A lot of our projects are on Main Street in Newark, Delaware,” she said. “I feel Pennsylvania Avenue is kind of the Main Street of Wilmington.”

Tsionas’ plan is to demolish the 37-year-old Galleria Shoppes and construct a five-story, mixed-use building that encompasses the footprint of the existing structure, as well as an adjacent parking lot on the 1.5-acre parcel.

The proposal calls for 20,000 square feet of retail space on the street level, about 40 percent less than the commercial space available at the current building.

The upper four floors would include 169 high-end apartments, while the design features an open courtyard with an in-ground pool along with a rooftop patio space for residents.

The plans also includes a self-contained parking garage. That portion of the building is currently designed for two subterranean levels with 255 spaces residents can access from Pennsylvania Avenue. Above-ground levels with 74 spaces for shoppers would be entered from North Grant Avenue. The property currently includes a lot with 80 spaces.

The shopping center also is currently home to high-end businesses, such as jewelry and art dealer Stuart Kingston and the Michael Christopher Salon, along with Sante Fe Mexican Grill and at least seven other commercial tenants. It's unclear how many of those businesses will remain once construction is complete.

“We’re speaking with all the tenants and negotiating,” Tsionas said. “Certain tenants’ leases are expiring and certain wish to remain.”

Those that stay, she said, may be relocated during the construction project, which is expected take about two years.

Tsionas management has yet to submit any formal plans to the city, but the new property owner hopes to have the project finished by 2018.

“The next step is to finalize the plans, go through the city’s approval process and go through the actual build-out,” said lawyer Michael J. Hoffman of Tarabicos Grosso. “We’re very early on in the process.”

He called the proposal a “transformative project” for the area.

“The concept itself really embraces what has been a modern trend primarily among young professionals and empty-nesters who are really seeking that urban, pedestrian-oriented, walking community,” he said. "We are hopeful this will be just the first of the dominoes and really set the tone for the revitalization for the area.”

Williams also said he is hopeful the proposed project will encourage additional redevelopment to the Pennsylvania Avenue corridor, the entrance to the city for many travelers coming from the north.

"Investing $40 million is nothing to sneeze at," he told Tsionas. "It’s very positive, and we are very committed to making things work just like you’ve done on Main Street in Newark. … The city is behind you 150 percent."

After unveiling the plans to the press, the developer fielded dozens of questions from community members at a standing-room-only meeting in the Woodlawn Branch Library attended by about 60 neighbors.

Some praised the project as a welcome addition to the nearby Union Street corridor.

"I think it's a gorgeous design," said Danielle Sullivan, a resident of Wawaset Park. "That spot has been struggling, and it's not attractive. ... To me, this is gigantic progress."

Others raised a host of concerns, mostly regarding parking, potential construction hazards, vehicular traffic on the narrow North Grant Avenue, pedestrian areas near the building and the overall viability of the project.

"Who are these people you think are going to be coming to Wilmington?" asked Janet Gordon, a resident of Wood Road about a mile away. "The jobs are leaving Wilmington. We have abysmal schools. We have a terrible reputation for crime. I'm picturing a lot of empty space."

Hoffman said the developer conducted a feasibility study and found there is demand for luxury rental space, even one that's located next door to active railroad tracks.

Alex Hafer, general manager of Koons Lexus of Wilmington across North Grant Avenue from the project, said he thinks more parking space needs to be provided for shoppers and employees.

"It's a cluster," he said. "There's no parking now as it is, and the road is a mess. Now you're putting in this colossal thing that's going to block out the sun."

Tsionas said she and her engineers would take residents' suggests under advisement.

"I thought it was positive," she said of the meeting. "There were concerns and we're still not through the process, so we'll probably address a lot of them. But, ultimately, I think it's going to be a wonderful project and, hopefully, this project spurs other development."

Tsionas Properties has helped to drive recent redevelopment efforts in Newark.

The company has developed at least eight mixed-use buildings in downtown Newark for a reported investment of more than $100 million. Two of its most recent projects replaced the Delaware Book Exchange at 58 E. Main St. with a four-story, 24-unit apartment/retail building and added a 12-unit apartment/retail building in place of the former Newark New Century Club at 201 E. Delaware Ave.

Angela Tsionas said the Galleria Shoppes is the company's first foray into Wilmington and the proposed redevelopment will be its biggest project to date.

The company purchased the Wilmington shopping center in October from longtime owner James Stein, who also owns and runs Stuart Kingston Jewelers.

The price tag has not been disclosed, but Stein said Tsionas made "a very fair" offer.

Still, he added, seeing the property demolished will be difficult.

"This is something I put a lot of time and money into," said Stein, who bought the former Diamond Ice and Coal company building in 1978.

"You just reach a certain age when it's just time to move on and let someone else worry about the AC and water pipes," he said. "And when you make that decision, you have to let go and you can't look back."

Stein said he plans to keep his jewelry and art business at the Galleria Shoppes, even if that means becoming a wholesaler during the construction of the new building.

"I think the plans are pretty cool," he said. "[Tsionas] is a very smart lady who knows what she's doing."

Michael Christopher owner Michael Hemphill, who's operated his salon at the Galleria Shoppes for about 35 years, also said he plans to return once the construction is complete.

"My lease runs through 2020, and I'm very excited about the possibility of what they're trying to do," he said. "Progress is a wonderful thing."

The owners of Santa Fe and other businesses that lease space at the Galleria Shoppers were not immediately available for comment.

Current tenants at the shopping center include Empowered Yoga, Morgan's of Delaware clothing shop, shared office thinkGrow Space, accounting firm Nagy & Associates, personal trainer The Studio, consultants Global Merchant Partners and an Edible Arrangements franchise.

Contact business reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel.