Middletown-area warehouse developer sues New Castle County

This story was originally published on Spotlight Delaware. 

A development company that has built distribution centers for Amazon and Walmart is suing New Castle County, claiming that government inaction has improperly delayed its controversial plan to construct a nearly 2.4 million-square-foot warehousing complex near Middletown.

The lawsuit follows months of outcry in the Middletown area against the development of massive warehouses, and the hundreds of tractor-trailers they would bring to the largely suburban residential area each day.

In the wake of the COVID pandemic, Delaware has become a hot market for online retailers seeking large plots of land to build distribution centers, largely because of its central location between New York City and Washington, D.C., and the cheaper cost of land here.

At issue in this case is the LogistiCenter at New Castle County, a proposal from Nevada-based Dermody Properties to build two logistics warehouses on 229 acres of land near the U.S. Route 301 interchange with Jamison Corner Road.

The company says it purchased the property in 2022 for a hefty $22 million.

Dermody claims in its lawsuit – which it filed last month in Delaware Superior Court – that county land-use officials “arbitrarily failed or refused to perform” their duties, when they did not respond to questions posed by New Castle County Councilmembers about the planned development.

In November, county land use officials had signed off on Dermody’s development plan, which sent it to the New Castle County Council for a final vote of approval.

But, because of the curious nature of local development law, the county council cannot vote to reject the proposal, so long as it complies with zoning constraints and building codes.

Instead, the county council can either vote to approve the proposal or send it back to the land-use department with questions about its technical compliance with the laws. Once answered, the council must approve the plan.

For Dermody’s proposal, councilmembers David Carter and Bill Bell – who each represent portions of southern New Castle County – sent two sets of questions to the land use department about the plan in December.

County officials responded to the first inquiry, but not the second, which delved into questions of traffic in the area and the possible impact on roads from the proposed warehouses.

Dermody’s attorneys claim in their lawsuit that when the company asked why those questions had not been answered, the county’s general manager of land use, Charuni Patibanda, said she had “been directed not to respond.”

They said she “referred further inquiries to the county law department.”

Asked about the claim, a spokesman for New Castle County Executive Matt Meyer’s administration said in an email on Wednesday that Patibanda “was never told not to comment” on the councilmembers’ questions.

In the email, the spokesman also shared a statement from Meyer, who currently is running to be Delaware’s next governor, claiming that Dermody’s lawsuit is “an effort to force through its plan despite serious questions pertaining to the project’s potential impacts.”

Meyer’s statement did not say why his administration has not answered Carter’s and Bell’s latest questions.

Warehouse traffic

Carter confirmed to Spotlight Delaware that the county’s land-use officials have not answered his second set of questions. When asked about Dermody’s warehouse plan in his district, Carter said he doesn’t believe that “it meets the requirements” of the local Unified Development Code.

For their part, Dermody’s attorneys argue that their proposal has complied with every aspect of the law. They further said that recent traffic studies show all intersections in the area are operating at approved efficiencies, except one at Ratledge Road and Boyds Corner Road that may fail by 2030.

Demordy argues that the largely truck traffic from their warehouses “is not expected to adversely impact” the Ratledge and Boyds Corner intersection.

Still, without an answer to the county council’s question, Dermody’s proposal remains in limbo.

IN THE NEWS: Middletown residents fight to stop warehouse construction

In its lawsuit, the company’s attorneys noted that the application to develop the land will expire on Sept. 28. If that happens, Dermody said it would be forced to restart the yearslong application over again – a process that has cost the company $3.85 million.

In their own statement emailed to Spotlight Delaware, Dermody officials reiterated the argument that “New Castle County Council has a legal obligation to approve this project.” They also asserted that the “integrity of the land use process” in Delaware and New Castle County is at stake in this case.

“Dermody Properties’ recourse to legal action, though regrettable, is a necessary step to ensure that the process is respected and that misinformation does not detract from the project,” the company said.

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