City enters agreement with Tsionas Emory Hill Management

Artist rendering of the proposed Milford Corporate Center which is designed to bring jobs to Milford

On Monday, September 9, Milford City Council voted unanimously to enter an agreement with Tsionas Emory Hill Management as part of the Milford Corporate Center project. The agreement would allow Tsionas Emory Hill to provide the city with professional development advice.

“Due to the nuances of this agreement, we consulted with attorney Gary Green of Archer & Greiner law firm which specializes in land and development agreements. We’ve been working on this agreement for nearly three months, I believe the management agreement outlines Tsonias Emory Hill’s brokerage, marketing and management rights for the Milford Corporate Center,” City Manager Mark Whitfield said. “Obviously, the city retains the final rights of any of the sale of the lots. And additionally, Tsonias Emory Hill was also planning on constructing a spec building on one of the lots in the corporate center, terms of which will be covered under a separate agreement which will soon come.”

Councilman Jason James questioned a section that mentioned deductions of third party funding which also mentioned Delaware Prosperity Partnership Site Grant Readiness funds. Whitfield explained that the management company would calculate lot sale prices using grant funding and gross cost in order to keep the cost of the lots low and entice more businesses to open in the park.

“If you recall one of the one of the purposes behind the site readiness monies, as well as the TIF monies was to make these lots affordable and to attract businesses,” Whitfield said. “So, this is one means of keeping the cost of the lot as low as we can. So, deducting out any of those grant monies that we received come from off that that price.”

Mayor Todd Culotta pointed out that the project itself was designed to bring jobs to Milford.

“I think the ultimate goal here, obviously, with us, from the start of the project, is to create jobs in Milford and good jobs, you know, manufacturing, distribution, whatever type of jobs,” Mayor Culotta said. “But this is what that area is designated for. So, we borrowed from ourselves to buy it through what water funds, but the idea is, for us as a council body, is to replenish those funds and then gain the jobs and the economic growth from it.”

Councilman James agreed.

“To your point, where the idea was not necessarily to enrich ourselves, but also to look out for the taxpayers that were using their money, but t gives a 50/50, split, and that incentivizes someone to market and sell them,” Councilman James said. “And we still have a profit to put back into the coffers for the taxpayer. I just want to make sure that we’re being very clear.”

Councilwoman Katrina Wilson asked if there was a clause in the contract that if the land is not improved or sold within a certain period, the city would have first option to buy the land back. Whitfield explained that would be in the deed restriction and that the city did not want someone to purchase the land and sit on it for 20 years without development. Mayor Culotta also pointed out that every project planned for the park would come to council so they had a say in what businesses opened in that area. Clay Hill of Tsonias Emory Hill provided council with the company’s background with this type of development.

“This is an exciting project, and so we’re honored to be considered to be part of this which has been several years in the making. And originally Tsonias Management was, obviously, they have holdings, significant holdings, in Milford. So, you had reached out to Tsonias with that relationship you have. We, I’m with Emory Hill, but we have a long standing relationship with Tsonias Management,” Hill said. “Delaware is a unique place where all the developers really are friendly competitors. We work together. We’re in partnerships with various other developers, so it’s natural for us to work together. So, when this opportunity came up, Angela Tsionas reached out to us because we have specific experience in this type of real estate. Our holdings are more multifamily, retail office, but our experience in industrial parks goes back to the mid 80s.”

According to Hill, Emory Hill was established in 1981 and in the almost 45 years they have been in business, they have constructed over 15 million square feet of real estate. The company employs over 70 people who handle various aspects of development, from leasing and sales to HVAC and general maintenance.

“We actually started many of these parks back in the 80s, buying land or representing landowners,” Hill said. “The one that we toured mark and Rob through, and some others, was Pencader Industrial Park in Newark. That is a 350 acre park that we developed in the 80s, slightly before my time, but I have been with Emory Hill for 20 years, but this was in the 80s. We helped the owners subdivide into 43 parcels, sold most of them. We represented all of those that we did not purchase ourselves. We still own 10 of those lots that we purchased and built, we have and then we sold the rest.”

Overall, Hill explained his company had been involved in more than 15 industrial parks and currently manage about seven. They have also helped with the creation of deed restrictions, annual meetings and other aspects of running a park well.

“Obviously many of you know parks that aren’t. They don’t have the proper guidance from inception. They don’t have the right deed restrictions put into place and other parameters to make sure that it’s a quality park. And so that is obviously the MO for this park, is to make sure that it is a standard bearer for Milford. We want to bring in good businesses. We want the park to be attractive,” Hill said. “There’s a trail around it. It’s going to be very big part of the community. So, we wanted this to be a first class park that’s very attractive, that brings great jobs, and it’s a place where people want to work. So to accomplish all those things, we were honored to come in at this stage where we could bring our experience from those other parks, and how to do it, what to do right, and recognize what has can go wrong, to make sure we bring all the best parts of those parks to this that’s really the one of the first things we have to do, is create the restrictions to make sure that we have the best park possible.”

In addition to helping create industrial parks that operate well, Hill stated that they also have a strong brokerage division with as many as 15 commercial brokers.

“So, we’re chomping at the bit. There’s still time before we put shovels in the ground and parcels ready to go, for somebody to buy it. So we’ve been limited in how much we can really share and talk about, but we certainly have our ear to the ground and know the likely players. And so, once we get started, we will hit the ground running,” Hill said. “And certainly, there have been leads of various sizes and forms that have come into city as well. And so hopefully those are being kept track of, because we’ll certainly want to reach out to them. And I think collectively, there’s enough demand that it’s going to go well. And so, the interest in hopefully building a spec building would be, our goal would be to have a lead tenant or two, so that we’re not coming out of ground without any tenants.”

Hill pointed out that financing is a little harder now than it was a few years ago, which is why they are trying to get to a price point that is not only attractive to businesses but also to banks. This is also one of the reasons they are planning a spec building that will set the standard for architecture inside the park and provide a look into what the park could be. The spec building would be a separate agreement, Whitfield stated.

“I think it’s a great idea, but you know that this is not one of those ‘you build it, and they will come,’ projects,” Councilman James said. “I know some are already here, waiting for it to be built, right, so we could get out of the ground quickly.”

Mayor Culotta pointed out that the city currently owned two industrial parks.

“We took the airport, turned it into business parks. And that has pretty stringent things around it,” Mayor Culotta said. “It’s taken a long time for that. It’s all sold now, but it’s been a long time. I’m really looking forward to this, to move forward.”

Council approved the agreement with Tsonias Emory Hill unanimously.