$175M transformation planned for DuPont Building

The Buccini/Pollin Group is charging ahead with a $175 million transformation of downtown Wilmington's DuPont Building in one of the city's most ambitious redevelopment projects in decades.

Over the next three to four years, the property – comprised of the Hotel du Pont, Playhouse on Rodney Square and a 13-story office building – will be converted into a mixed-use complex that includes apartments and 40,000 square feet of retail space combined with a food hall.

Most of the renovations will be made to the office portion of the building; the venerable hotel will undergo largely cosmetic changes, such as new carpets and room upgrades.

"To me, this is one of the most important projects in our city because that building has been one of our most powerful symbols," said Wilmington Mayor Mike Purzycki. "To see it come back like this gives us a sense of optimism that it will turn the tide of confidence in the city."

BPG estimates the project will create 300 temporary construction jobs along with 30 full-time positions in the property's retail and residential spaces. Wage, payroll and other taxes are expected to generate nearly $23 million in revenue for the city, state and county over three years and about $38 million over five years, according to data from the Wilmington-based developer.

"These jobs create a balance in the economy," said Mike Hare, senior vice president for development at BPG. "It's not just high-end financial center jobs, but very approachable jobs for people in the city."

BPG is funding the project through a construction loan backed by M&T Bank, private equity and historic tax credits. The credits, governed by the Internal Revenue Service and the National Parks Service, encourage the preservation and reuse of historic properties by offering a dollar-for-dollar reduction on taxes.

Separately, BPG expects to receive a $1.5 million Downtown Development District grant from the Delaware State Housing Authority.

The project's most dramatic revitalization will occur in the office building at 1007 N. Market St. BPG will completely gut the space, dividing it between offices and market-rate apartments. Chemical company Chemours will lease 256,000-square-feet of space on floors four through 13. The company reportedly signed a 17-year lease for the space.

That leaves about 60,000 square feet of vacant space that could support one to four tenants, according to Chris Buccini, co-president of BPG.

Chemours  announced plans in January to sell the building to BPG and lease it back on a long-term agreement. Financial terms of the deal were not disclosed.

Chemours acquired the property as part of its spin-off from DuPont in 2015. DuPont had owned the building since construction was completed in 1908, but gave it up in 2014 when the company moved to a suburban campus in Chestnut Run.

About 700 Chemours employees work in the building. An additional 300 Chemours workers are scattered throughout Delaware.

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Chemours' decision to keep the building as its global headquarters ended more than a year of speculation on whether the company would seek new digs in the city. It had looked at other properties, including the Bank of America Building just across Rodney Square, before ultimately agreeing to stay in the building that has served as its only home.

"Staying in this historic building is an entirely appropriate acknowledgment of our legacy," said Mark Vergnano, CEO of Chemours. "And just as we have been transforming Chemours into a world-class chemistry company now working closely with BPG we will transform our office space into a modern, world-class work environment."

Renovations are expected to take 18 months, Buccini said. Chemours will occupy about 80,000 square feet of space in the Nemours Building, another BPG property, on a 12- to 18-month temporary lease while construction is completed.

Chemours will cover some of the office construction, Hare said. Last year, Chemours was approved for $7.9 million in taxpayer grants in exchange for retaining 900 jobs in Delaware through 2020. Nearly $700,000 of that money was allocated to upgrading its headquarters.

"They are making a significant financial investment in this space," Hare said. "We are doing a large part of it, but Chemours is putting its own resources into it."

The project's second phase will modernize the building's first floor along 10th street, adding 40,000 square feet of retail space. Buccini said it was too early to list potential tenants, but about 10,000 square feet of that space at the corner 10th and Orange streets will be occupied by a food hall, one of the hottest trends in urban dining.

A food hall is similar to a food court, but instead of traditional chain restaurants, it involves local chefs showcasing their dishes – typically healthier eating options. Food halls have sprung up in major downtown markets such as Los Angeles, New York, Detroit and Pittsburgh over the past year. A study by real estate firm Cushman & Wakefield found 96 major food hall projects totaling over 2.4 million square feet of space were under construction by the end of last year's third quarter.

Buccini said the DuPont Building's food hall will have about eight different stands offering breakfast, lunch and dinner.

"The food hall takes smaller, independent and maybe even start-up food providers and gives them a facility where they don't have to build a restaurant," Hare said. "It's meant to inspire a sense of entrepreneurship in the city."

An M&T Bank Branch at 10th and Market streets will remain and a restaurant separate from the food court is expected to be added as part of the ground floor.

Once the ground floor retail and office renovations are completed, BPG will transform the unused office space into 180 apartments. The project will essentially divide the building in half with Chemours occupying the side on Market Street facing Rodney Square. The apartments will overlook Orange Street.

"One of the things that really works here is that every single street has a different, but very elaborate lobby," said Buccini. "The ground floor retail would be the unifier among the space. It lays out incredibly well."

The residential component is still in the preliminary stages. It is not known if it will include one-, two-, or three-bedroom units. Hare said the units' rental rates will be on par with BPG's other downtown Wilmington apartment properties, about $2 per square foot. Hare said the residential portion will include amenities such as a health club.

Another component of the project will include increasing the number of shows at The Playhouse at Rodney Square, a 1,200-seat Broadway-style theater attached to the office building.

Buccini said BPG is working with the theater manager, the Grand Opera House, to offer more events. The Grand acquired the theater business from DuPont in 2015, after the chemical giant was under pressure from activist investor Nelson Peltz to divest some of its non-core assets.

Purzycki said his administration will do what is necessary to improve safety for workers, residents and visitors.

"I think we view it as a very important district to maintain statistical safety, but also the appearance and feel of safety as well," he said. "Our major effort is going to be to increase public safety and make people feel secure."

By the time the renovations are completed, the DuPont Building might even have a different name. BPG is studying the possibility of rebranding the property to reflect the changes. Any name change will not impact the Hotel du Pont, Buccini said.

Although the hotel will remain largely unchanged, Hare said he hopes the project will restore its glory days as the center of social activity in Delaware's largest city.

"We want more people going through for dinner on a Friday or Saturday night or more people having breakfast and lunch there," he said. "We want to make the hotel even more relevant to the way people get together in downtown Wilmington."

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