Lewes approves rezoning for workforce housing

Schell plans rental units on 7.11-acre Savannah Road parcel
June 15, 2018

Lewes council took a leap of faith entrusting developer Preston Schell to build workforce housing on Savannah Road. 

Officials approved a request June 11 to rezone a 7.11-acre parcel near the former railroad track crossing from R-2, low-density residential, to R-5, mixed residential. A conceptual plan shows the project could have more than 160 units. He said a minimum of 144 units would be required to make the project financially viable. Based on feedback from city officials, Schell said, the plan is likely to change. The number of units he can build is restricted by the city’s parking regulations, which require two parking spots per unit. 

Council voted 4-1 to approve the request, with Councilman Rob Morgan the lone vote against. Those who voted in favor said the city has long sought to add affordable workforce housing.

“The city has been talking for some time about workforce housing, but that’s all we’ve done – talked,” said Deputy Mayor Fred Beaufait. “I don’t think we can just walk away from that topic and that need.”

Schell applauded the council’s reasoning. 

“Council members, even in the face of opposition, voted in the best interest of the town and in the best interest of the area workforce,” he said. “That historically has not been the way Lewes operates. That sends a really strong message to area developers and adjacent property owners considering annexation into Lewes that the process can be relied upon.” 

Beaufait said Schell understands what the city is looking for when it says workforce housing – homes for teachers, police and nurses, among others. 

“It’s time to be serious about this long-standing discussion about the need for workforce housing in Lewes,” Beaufait said. “At some point we have to either fish or cut bait.” 

Rentals keep it affordable

To keep the development affordable, Schell said, the units will be rentals controlled by the market. He compared monthly rent costs to Schell Brothers’ other rental development, Beach Plum Dunes, off Kings Highway behind Crooked Hammock restaurant and brewery. He said rates could range from $950 to $1,500 per month based on the size of the apartment. At Beach Plum Dunes, he said, 61 percent of the tenants are members of the local work force, with many working at Beebe Healthcare, Cape Henlopen School District, in the restaurant industry and other local businesses. 

Lewes officials are interested in restricting the community, to avoid it becoming a haven for weekend and seasonal rentals. They would also like to find a way for Schell to ensure it is not exclusively rented out to retirees. 

“I’m not sure how you can legally restrict the tenant base and still comply with fair housing laws,” Schell said. “We need to learn more about that.”

Councilwoman Bonnie Osler said the need is apparent, but the city and developer need to be sensitive to concerns raised by neighbors. 

“Five years ago I would’ve said the need for workforce housing was not acute, but those days are gone,” Osler said. 

Morgan voted against the request because, he said, it is disingenuous for the city to oppose higher density in new developments outside the city limits, but then approve a more dense rezoning request.

“I don’t see how we can go to the county and developers and say ‘reduce density’ and then say OK to Mr. Schell and add a couple hundred more people and cars,” Morgan said.

He said the traffic created on the already stressed roadways would be too much.

Approval comes four months after Lewes council approved a rezoning request for a 9-acre adjacent parcel, where Schell and Vantage Point Retirement Living Inc. plan to build a senior-living facility. 

The same request sought to rezone the 7.11-acre parcel to limited commercial with the intention to build professional and medical offices, but the planning commission and city council did not react favorably to the idea of more commercial space along Savannah Road. Schell asked council to defer a vote so he could come back with a new plan for the parcel. 

The 7.11-acre tract is likely to grow to about 8 acres, as Schell has agreed to purchase a .88-acre adjacent piece of land. The small parcel sits in Sussex County jurisdiction, and, Schell said, he plans to submit an application for annexation and add it to the larger parcel. 

Traffic remains an issue

When combined with the 175-unit senior-living facility, a 162-unit rental community would generate 1,300 new daily trips per weekday, Schell said. The workforce housing concept alone would add about 880 trips per day; under the previous plan, with limited commercial on the 7.11-acre parcel, Schell said, daily trips with the senior-living facility were estimated at more than 2,500. 

Under the approved R-5 zoning, Schell could build a variety of housing types on the property. With about 8 acres, he said, he could build about 23 single-family homes, but they would not be affordable for most of the workforce.

“If you want to address the workforce issue, you can’t build that,” he said. “If you’re 27 years old, the likelihood of having the down payment needed is not good.” 

Schell said he has every intention of putting forth an acceptable project. Before submitting a site plan for review, Schell said, he plans to meet with the planning commission to gauge their expectations and vision for the project. 

“I want everybody to be on the same page I’m on so we can tackle this together,” he said. “I think they need to be kept in the loop and part of the process from Day 1, instead of me coming up with my own thing and then pitching it to them at a public hearing. I don’t think that’s what they want.” 

Neighbors oppose

The request was not without heavy opposition from immediate neighbors living in the single-family home portion of Henlopen Gardens and residents across Savannah Road. 

Neighbors said they worried for their property values, while also rallying against the conceptual plan’s three-story design, allowable under the city’s 30.5-foot heigh limit. 

“On entering Lewes, I do not want to see a large three-story apartment complex sitting in the middle of one- and two-story home structures,” said Henlopen Gardens resident Sandy Gent. “I think we should keep Lewes the quaint beach town we talk about, know and love.” 

Henlopen Gardens resident Eileen Snyder said she understands the desire to offer lower- to moderately priced homes for younger working people, but she believes this location is not a good fit. 

“Generally when younger people get more financial ability, they move closer to where they can afford it,” she said. 

She said opposition to affordable housing paints the city in a bad light, that residents don’t want lower-income people in their town. But, she said, condominiums are available in the mixed-housing portion of Henlopen Gardens along Kings Highway. 

“What we want is for our property values to not be destroyed,” she said. “I would venture that our two areas in Henlopen Gardens have more diversity than a lot of Lewes.”

Savannah Road resident Becky Huling said the nearest intersection at Donovans Road is one of the worst along Savannah Road, and this project will only make matters worse. She said she’d prefer to see the land remain open. 

“Why do we have to cover every bit of grass there is?” she said. “There are other things that could be put on that land, like a pond with a trail going around it for the seniors living there. Keep this within the context of Lewes. Lewes has always been known as a quaint little fishermen’s town, and we are wiping it out. Why? What’s wrong with Lewes the way it is?”

Nancy Powell of the Southern Delaware Alliance for Racial Justice was the lone member of the public to speak in favor of the project. She said the comprehensive plan identified this parcel as a prime place for workforce housing. 

“We believe this will increase the diversity of the population of Lewes,” she said. “It will serve those who serve us who cannot always afford to live in Lewes.”

Ultimately, council members approved the request but implored Schell to design a community that is harmonious with the surrounding community and asked that he listen to the concerns of the residents.

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