NEWARK — In a town hall meeting Tuesday, University of Delaware officials unveiled new details about the redevelopment of the former Chrysler assembly plant.
A new, 230,000-square-foot health science building will become the gateway to the eastern side of the site along South College Avenue.
With offices, classrooms and research labs, about half of the new building will house UD’s College of Health Sciences. UD expects the rest of the space will be leased to private businesses in health-care-related fields.
To complete the project, the university struck a land development deal with two local companies, Delle Donne & Associates Inc. and Bancroft Construction Co. UD is leasing 15 acres to Delle Donne, which will work with Bancroft to construct the building at no cost to UD
The College of Health Sciences will then rent space from Delle Donne.
In a sense, UD will be both landlord and tenant. The building project will start this summer and should finish in the fall of 2013.
After this initial phase, Delle Donne and Bancroft expect to develop more of the 15-acre parcel on the former industrial site, which UD has named the Science Technology and Advanced Research (STAR) Campus.
The amount Delle Donne pays UD for the land will increase as more square footage is developed and leased to private companies, said Andrew Lubin, UD director of real estate.
UD would not release the terms of the lease agreement. The anticipated cost of the building project was also not disclosed.
About 170,000 square feet of the new facility will be a radical remodeling of the administration building left behind from the site’s Chrysler days, and the remaining 60,000 square feet will be an addition.
Aside from not incurring the costs of constructing and maintaining the property, UD would also be “insulated” from any “downside risks” of developing commercial property, such as fluctuations in the lease market, interest rate changes or cost overruns, said Ernest F. Delle Donne, development manager and president of the company.
On the other hand, the setup will cause a budget squeeze. The College of Health Sciences will be forced to find money in its budget to pay rent to the developers, said Kathleen Matt, dean of the college.
“Those are precious dollars that I could use to hire faculty,” Matt said. “But this model allows us to move forward more quickly.”
This was the only feasible model at the moment, Matt said, given the alternative would have been raising money to construct the building.
The college will be responsible for pre-approving tenants for the site, and it has already suggested 10 companies interested in the site, Matt said.
Potential tenants could range from clinical practices that see patients – such as behavioral health or orthotics – to startup or entrepreneurial companies developing medical technology or devices.
Matt said UD wants to attract businesses that would benefit from the proximity to a university and want to partner with an academic institution. That could also lead to learning opportunities for UD students.
“This is not just a business proposition,” Matt said. “It has to be a good fit.”
Delle Donne would then negotiate the terms of a lease and serve as landlord of the property.
In all, Delle Donne estimated, the more than 100,000 square feet filled by private businesses would employ about 500 people.
Delle Donne said the phase one project was designed to be compact and consume a limited amount of space on the site to allow for future growth.
“We didn’t want to do anything in the design to inhibit anything in the future,” he said.
Despite the release of more concrete plans for the first phase of work on the site, many of UD’s plans for the STAR Campus remain conceptual. The campus will become the home of the Delaware Health Sciences Alliance, a partnership formed in 2009 by Christiana Care Health System, the Nemours/Alfred I. duPont Hospital for Children, Thomas Jefferson University’s medical college in Philadelphia and the University of Delaware. But it’s undecided what form that relationship will take on the site.
Jefferson students do clinical rotations with Christiana and Nemours. Matt has been in discussions with Jefferson about the idea of offering medical school courses at UD to enable hospital residents to avoid driving back to Philadelphia for class during their rotations.
UD and Jefferson might also start a joint degree for physician assistants, who would spend three years at UD and two years at Jefferson.
“It’s critical to Delaware because we don’t have a medical school,” Matt said. “We’re bringing together a center for medicine.”
Nearly 100 people attended the town hall event at the university. UD also took the opportunity to release images of what the manufacturing facility for Bloom Energy will look like once completed. The fuel cell maker’s new East Coast headquarters, backed by state subsidies and incentives, is expected to be finished by the end of 2013.
Members of the university and Newark community had the chance to ask questions about the future of the site.
Several asked about what other projects would be on the horizon. In the past, UD officials have raised the possibility of a new hotel, and Lubin said Tuesday the site has interest from tech firms as well as companies looking for computer data center space. But no concrete plans have emerged beyond Bloom and the health sciences building.
UD doesn’t expect the site to develop quickly.
“The full development of this site might take 40 or 50 years,” said David Singleton, vice president of facilities.
Contact Wade Malcolm at 324-2386, on Twitter @WadeMalcolm or firstname.lastname@example.org