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Monday, January 25, 2021

Wilmington: How We Got Here and Where We're Going

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Kevin McGonegal
Kevin McGonegal worked in the Maloney, McLaughlin and Frawley Administrations. Today he is vice president of Bellevue Realty Commercial Division in Wilmington.

Part V: Jai Alai, Anyone?
This economic development retrospective covering the years 1945 to 1984 will be serialized as eight parts, running on alternate days on Town Square Delaware. 

Wilmington Mayor Tom Maloney chose to run (unsuccessfully) for U.S. Senate against Bill Roth in 1976 and the mayoralty fell to long time city councilman and DuPont Company employee Bill McLaughlin. Questions were raised by some about the continued viability of Wilmington government in the face of ongoing physical and financial deterioration. There was a sense of urgency to make something happen and a willingness to try just about anything.

Jai Alai game in play

A project out of the blue seemed to fit perfectly into this desperate situation. How about a Jai Alai Fronton for downtown Wilmington? Jai Alai (“merry festival” in Basque) had become a phenomenon in Florida involving wagering on the outcome of matches, even though few Americans understood the sport that originated from the Basque region of Spain. Played something like handball, except with a wicker basket called the “cesta” attached to the player’s hand to catch the “pelota,” a ball ¾ the size of a baseball but harder than a golf ball, the players would send it rocketing at speeds of 150 mph against one of 3 walls. Frontons/gambling venues had been built in Florida and most recently in Connecticut, and the Delaware legislature was being wooed by promoters to approve a bill legalizing it in Delaware. Wilmington was to be home to Delaware’s first fronton.

Two outside groups, Warner Communications and Bridgeport Jai Alai, Inc., had competing proposals for different sites, with Warner pushing for a downtown site while Bridgeport wanted a site along I-495, at what is now the state prison. According to Wilmington Planning Department analysis from 1977, the Fronton would create about 500 jobs and produce $1.15 million in revenue to the City and $6.47 million for the State.

Custom House Square Associates naturally pushed for their downtown site, referred to as the civic center site, and Fred Krapf flew state legislators along with city and state officials up to Connecticut in his own plane for tours of the Bridgeport Fronton. The General Assembly did pass enabling legislation to allow pari-mutuel betting for Jai Alai under the constitutional exemption for horse racing, but that legislation was challenged in court by anti-gambling groups. The state Supreme Court threw out the Jai Alai law as the wrong way to allow this form of betting. Next the Governor’s office along with the City of Wilmington attempted to pass a constitutional amendment to allow Jai Alai betting, which did pass the House but lost by one vote in the Senate. As the story goes, one senator’s best efforts to avoid casting the deciding vote were thwarted when this person was found in Legislative Hall hiding in a bathroom stall.[1]

Delaware’s experiment with Jai Alai was now dead and Wilmington was again desperate for something else to kick start economic development. Efforts continued to resuscitate manufacturing, whether it was a plant to make shoe soles at the old Electric Hose site or the Wilmington Finishing plant at the old Bancroft Mills on the Brandywine. Wilmington was chasing ghosts of the past, and even those involved in the efforts seemed to recognize it. Through a charter revision process Wilmington tried to gain some rights to annex property into the city limits, a power used to great benefit by many other municipalities throughout the country. A joke by the Mayor about annexing the DuPont Experimental Station caused a minor furor but it was enough for the General Assembly to kill that provision.

Three Major Events

While Jai Alai was rising and falling, three other events were simultaneously playing out that would change the direction of downtown development. Custom House Square Associates sold a portion of their development site along 8th Street to the Wilmington Parking Authority for construction of a public parking garage. Custom House Square Associates retained the air rights over the garage and built a 100,000 square foot office building on the Walnut Street side. Plans were made for a 220-room hotel above the King Street side of the garage but there was a significant gap in the financing. The private developer turned back to the City of Wilmington for help.

At this point the partnership approach that had first been broached with the regional mall idea began to take shape once more. The city government had already partnered with a private developer and now the federal government had announced a new innovative source of funding, to be available to cities on a nationwide, competitive basis. The federal government, which had been the source of funding for so much destruction in Wilmington through the 1950’s and 1960’s, would now offer grants to cities, which would in turn be loaned to private entities for development projects in urban areas.

The program, called the Urban Development Action Grant (UDAG) program was a major part of President Jimmy Carter’s urban plans. One of Carter’s early backers for the presidency was first term senator Joe Biden, who provided critical support to secure the first UDAG award in the nation for Wilmington’s hotel project. Wilmington’s application was viewed favorably because of the 5 to 1 private financing to public money ratio, and the willingness of the hotel ownership, a partnership between Custom House Square Associates and the Radisson Hotel Corp., to devote a significant portion of jobs to city residents, minorities and low and moderate income workers. To assure compliance the city personnel department handled the initial job application and screening for what was to become the Wilmington Radisson (now Doubletree) Hotel, which opened in April 1979.

The other attractive feature for Wilmington was that the UDAG loan would be paid back by developers to the city, not to the federal government. Wilmington created a separate entity, The Wilmington UDAG Corporation (WUC) to receive the loan paybacks and reserve them for future economic development projects. Another significant feature was that this project created jobs for which unemployed city residents were actually qualified to apply. The manufacturing jobs were on their way out but at least some service sector jobs were coming to replace them. While 200 jobs were created, 80% of which went to city residents, this type of private sector job creation through government efforts would prove to be the exception. More and more, jobs created or retained by major projects would be a poor match for the skills of Wilmington’s unemployed.

Wilmington Dry Goods
(Photo courtesy of the Delaware Historical Society)

But while the new Radisson Hotel was under construction, the landmark Wilmington Dry Goods announced it was closing its 70,000 square foot department store in February, 1979 and moving to Elsmere. If there was ever one store that personified Wilmington’s retail heart and soul, it was the hardwood floors and Lazarus Day sales of the Dry Goods on the 400 block of Market Street. The tremors were felt on the 9th floor of the City/County building where Mayor McLaughlin and his team authorized a consultants’ study to see if a replacement department store could be lured to downtown.

The finding by the consultants was a resounding no, with perhaps the first definitive demographic report on Wilmington’s place in New Castle County. The department stores dominating the area market – the Strawbridges, Penneys, Sears, Almarts, Gaylord’s and Woolco’s – all had large operations in multiple suburban locations that more than serviced the whole market. Even Wilmington’s remaining retailers had key suburban locations, such as Braunstein’s at Price’s Corner and Kennard’s in the Concord Mall. It pointed out that in 1963 the Central Business District accounted for approximately 26.6 % of the metropolitan area’s “shoppers goods sales.” By 1978 this had plummeted to 3.4%. The facts were that Wilmington did not have the population profile or the retail base to attract another major department store, so there would be no retail anchor on that end of the Market Street Mall.

Wilmington officials could not let the Dry Goods site sit vacant, though, so they began to look for other alternatives. One possible harbinger of new specialty centers highlighted in the study was the new Trolley Square Center then under construction on Delaware Avenue, the site of the old trolley and bus barn. This mix of specialty retail space with offices and apartments above held out some hope for the now vacant Dry Goods building. Ultimately it was decided to pursue something akin to an indoor farmer’s market with local entrepreneurs selling their goods, following a model then operating in Atlantic City and similar to the Reading Terminal in Philadelphia. After several fits and starts the developer chosen for this project failed to get it off the ground, and the building remained vacant. WEDCO, the Wilmington Economic Development Corporation, which had been formed in 1979 to promote smaller scale development, purchased the Dry Goods site in 1980.[2]

One more event was also taking shape, an event that would radically change Wilmington’s outlook and landscape.

Next: The Hercules Deal


[1] Note: Connecticut’s two main frontons in Hartford and Bridgeport closed in 1995, and by 2001 Jai Alai in Connecticut was dead. Created by the State Legislature as a means to use gambling to make money for state coffers, competition from Atlantic City and Indian casinos crippled the ventures.

[2] WEDCO would have its own growing pains. One of the first projects financed was a gas station at 10th & Walnut that needed a $10,000 advance for gasoline. The gas was delivered and paid for by WEDCO on a Friday but by the following Monday, the scheduled grand opening, the gas has been siphoned out and the owner was nowhere to be found.

Author’s Acknowledgements:

Carol Hoffecker’s excellent book, Corporate Capital Wilmington in the Twentieth Century (1983) gave me a great source for the early post WWII years. I would also like to thank the following individuals who contributed their time, assistance and recollections: Peter Besecker, Joe DiPinto, Elliott Golinkoff, Brian Murphy, Dick Pryor, Fred Sears, Dave Singleton and Stan Soja.


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