Convergence Investments

Complete: 143 Acre Brownfield Site

Acquisition Details

Property Location:
Milton, DE
Property Type:
Mixed-Use Residential
Acquisition Date:
Project Cost:
Completed Project
511 Unit SF / Multifamily; 25,000 sq/ft Commercial

Project Summary

Convergence acquired a contract to purchase this property in 2003 with a group of 3 investors who committed 4.3 Million in equity to fund the predevelopment activity. This site was originally the location of a retired canning facility, and was the first project to enter into the Voluntary Cleanup Program (VCP) with the State of Delaware, which provides incentives for the private investment and cleaning up of brownfield and superfund sites by creating a transfer of liability process whereby the state ultimately assumes long term liability of issues associated with contaminants and toxins from the property’s former use. The purpose behind the acquisition of this property was the priority location within an existing resort destination town, and the discounted price associated with the brownfield designation and necessary VCP process prior to development.

During the 15-month period the property was under contract, Convergence secured all necessary approvals for the development of 511 condominiums, townhomes, and single family homes, 110,000 square feet of industrial space, and a 12 acre commercial district. Convergence also executed the necessary steps to complete the VCP process on site, including the removal of 11 underground storage tanks and contaminated soils, the removal of 20 acres of concrete structures, extensive underground water monitoring, and other large environmental review projects. Convergence also secured a $22 Million acquisition and improvement loan to begin the development work on the site.

Following Settlement on the property, Convergence managed the site construction of phases 1 and 2 (266 units) of the project. Convergence also constructed and sold the five condominium buildings that comprised phase 1 of the project. NVR, Inc, a publicly traded home builder, purchased the remaining 246 lots in phase 2 in 2004. Convergence sold its interest in the remaining portions of the project in 2005 to a private investment group.