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Grocery store, 144 homes possible for Dauphin area this year

Construction of a commercial plaza and about 144 homes in upper Dauphin
County could move forward this year if Cumberland County-based Delta
Development Group can finalize plans.

Construction of a commercial plaza and about 144 homes in upper Dauphin County could move forward this year if Cumberland County-based Delta Development Group can finalize plans.

A real estate subsidiary of the company, LDI Associates/Dauphin, owns the commercially zoned farmland off State Route 225, Allegheny Street and Hagy Lane in Middle Paxton Township, near Dauphin Borough, and Delta is working on plans for the development, said Eric Clancy, LDI’s president and Delta’s executive vice president.

“We’d like to have an announcement in 2010,” he said, although he could not be more specific about when the project would move forward.

Delta is talking with partners about the commercial and residential portions, Clancy said. The development could include a small grocery store, he said. Clancy declined to release additional details, including the nature of discussions and companies with which his firm is partnering.

The companies have not presented plans to the township, officials there said.

The township is aware the companies own the property.

LDI took out a $2.2 million mortgage with Susquehanna Bank in 2007 to purchase the 148-acre property split between two parcels, according to documents with the Dauphin County recorder of deeds.

The company hasn’t spoken to the township about the plan in several years, township Manager Julie Seeds said. She said she was unaware of any issues that might be holding up the project.

Dauphin Borough will have to address a couple of sewer capacity issues before the development moves forward. The sewer system serves homes and businesses in Middle Paxton Township.

Although the sewage system has capacity for development, the borough needs to have enough reserve capacity to handle flow from the Middle Paxton Elementary School, where enrollment could potentially double, said Derek Stence, a council member on the sewer committee.

The borough also needs to replace aging pipes that allow ground water to seep into the sewage system, he said. The extra water reduces the sewage plant’s capacity and thereby the number of commercial and residential units that can be added, he said.

Delta spoke to the borough about sewer connections the week of Feb. 2, but it did not submit plans, Stence said.

There are other issues that can hold up commercial development, even if market demand is right and utility issues can be resolved, said Steve Evans, senior vice president and retail division managing director for East Lampeter Township-based High Real Estate Group.

“As long as you’re attempting to develop a neighborhood shopping center, anything but anchored retail is high-risk,” he said.

That means before a development firm can break ground on a shopping center project, it needs to already have leased the largest space to a notable retail company, Evans said.

With banks holding to stringent lending standards, many developers could aim to lease up to 80 percent of the proposed space before seeking financing, he said.

“It’s more difficult to get financing today than it was in the past, especially if you’re not significantly pre-leased,” he said.

Developers planning mixed-use properties, such as the Dauphin-area development, can’t assume that new residential units will feed the commercial property, Evans said. There has to be a broader demand for the retail, whether that demand is a geographic or niche-based gap, he said.

The nearest grocery outlets to Dauphin and surrounding Middle Paxton Township are Giant Food Stores in Matamoras on the other side of Peters Mountain, 9 miles north, and the new store on Linglestown Road, 7 miles away in Susquehanna Township.

Developers also need to make sure demand is adequate for the individual residential and commercial pieces, Evans said.

“The good of that,” he said, “is that you put those parts together and you get something that’s more successful.”

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