The familiar structure that rises among wetlands near I-95 has long stood as a symbol of a well-publicized land use battle between New Castle County government and developers. Now, more than a decade since it was built, the hotel is finally getting to do something it’s never done before: open for business.
(page 3 of 5)
Bill Sullivan was working as general manager of the Hotel du Pont and the DuPont Country Club when the former Radisson was being readied to open. Sullivan is now managing director at Courtyard Newark at the University of Delaware, and a board member and past chair of the Delaware Hotel and Lodging Association.
“It was probably going to be the biggest hotel to open in New Castle County in 10 or 15 years,” Sullivan says. “There were groups on the books and they were going to be off to a great start. The shame of it is about 150 people were expecting jobs and then the next day they lost their jobs.”
The hotel’s struggles continued. Wilmington Hospitality defaulted on its $19 million mortgage from Florida-based Republic Bank and filed for bankruptcy in July 2001. The Radisson franchise expired in June 2002 and the company’s signs were taken down. The bank took ownership of the property in April 2002.
The bank added land—16 acres to the existing 3 acres—for parking and additional landscaping improvements to reduce the hotel’s impact on the floodplain. In May 2003, the company that owns Delaware Park purchased the hotel from the bank for $11.2 million.
Wilmington Hospitality filed a suit in July 2003 in New Castle County Superior Court, claiming its civil rights were violated because the county wouldn’t let it open the hotel. The suit asked for $20 million in damages. A previous suit filed in U.S. District Court in Philadelphia said the county had violated Wilmington Hospitality’s right to due process and equal protection under the law and intentionally breached an agreement to issue a temporary certificate of occupancy. That suit was dismissed a month before the 2003 suit was filed.
The new owners, Parkside V LLC, would need to make further improvements in order to receive a certificate of occupancy from the county. Those improvements included resolving continued flooding and parking issues and upgrading the sprinkler and electrical systems. Some of the work was necessary because county codes had been strengthened since the hotel was built. Parkside also bought out a junk yard across the street. At one point, Parkside had to fix more than 600 problems with the property.
In June 2007, a jury awarded the developers $7.5 million plus $1.6 million in attorneys’ fees, saying the county had treated them irrationally and differently than other developers. But in 2008 the Delaware Supreme Court overturned the verdict, ruling that the developers failed to prove unfair treatment by the county or that they were targeted unfairly. Justice Carolyn Berger also ruled that Wilmington Hospitality tried to get away with ignoring county codes and regulations.
In the summer of 2010, the county finally issued a certificate of occupancy to Parkside V. About five months later, the hotel was sold to Philadelphia-based Hersha Hospitality Trust for $15 million.
“When the great recession hit, we had a change of thought,” says Bill Fasy, president of Delaware Park, which had planned to use the hotel in part to house casino customers. “We didn’t want to spend any more money. It was, to coin a phrase, time to shit or get off the pot.”
continues on page 4...