ADC seeks to acquire Perdue property in Showell
Wastewater treatment plant,362 acres included in proposed sale

Up to 1800 homesites envisioned for new residential development. ADC would convey upgraded treatment plant, 1,000 or more EDUs to county. 

By TOM STAUSS
Publisher
Perdue Farms, Inc. has agreed to sell its dormant wastewater treatment plant and 362 surrounding acres in Showell to ADC Builders, Inc. of Rockville, a major regional developer active in Worcester County.

The contact sales agreement concludes an intense competition among many area developers, and even the Worcester County government, to purchase Perdue’s wastewater treatment plant and thereby control much of the future growth potential of northern Worcester County. The treatment plant shut down earlier in the decade when the poultry giant closed its Showell operations and transferred employees to other Perdue facilities throughout Delmarva.

Alan Cohen, president of ADC, said this week that it could take up to 18 months or perhaps longer to complete the transaction. A final purchase price will be based in part on the number of equivalent dwelling units that the developer will be able to place on its acreage, but Cohen said the price tag will probably range somewhere between $20-$30 million.

About two thirds of the 362 acres has been designated a growth area in the county’s comprehensive plan now entering the final phase of review by the Worcester County commissioners. Cohen said his firm would be asking the county to include the rest of the property, about 100 acres, in the growth area.

“We will have some negotiating to do with the county, but we believe it’s possible to come up with an agreement that’s good for everyone,” he said. Cohen said that the Perdue family will be his partners over the next 18 or so months to conclude an agreement with the county covering issues such as growth area designation, number of EDUs, rezoning and transfer of ownership of the upgraded wastewater treatment plant to the county.

Cohen said that preliminary estimates are for somewhere between 1200 and 1800 EDUs on the property, much of which is cleared land that has been used for agriculture. The southern perimeter of the property is forested, which ADC would like included as part of a designated growth area.

Cohen said his intent would be to develop the property for a mix of single family and multi-family attached dwellings, with a significant percentage of senior and so-called affordable housing included. Total development cost would range from $30 million to $50 million. The development would include a wide range of amenities, among them a clubhouse, swimming pools, biking and hiking trails, tot lots and the like.

“It has to be magnificent, a high quality project,” he said.

Because ADC is not set up to build a large number of homes, Cohen said it was probable that three or four builders would be selected to carry out the marketing and building of individual homes, with some lots being retained by ADC.

Cohen’s firm would build the infrastructure, including roads, water and wastewater facilities, and would also make roughly $5 million in improvements to the wastewater treatment plant it is buying from Perdue. The chicken processing plant and other Perdue structures would be razed as part of the project.

The transaction makes the county a key player in whether the contract purchase goes to settlement, as it is contingent on the county commissioners approving rezoning of the property for residential development, action that presupposes that the commissioners will designate the acreage slated for development as a growth area, as recommended by the Worcester County Planning Commission in the draft comprehensive plan.

A 60-plus plus purchase contract envisions that ADC will complete extensive upgrades to the treatment plant, which had been used to process chicken waste, so that it can be used to treat wastewater generated by residential development.

The treatment plant, which has been maintained in operating order by Perdue despite the shut-down of the chicken processing plant, is a state-of-the-art tertiary plant that has won a number of awards from the state for its operating efficiency. Its discharge of treated wastewater has been into an unnamed tributary of Church Creek, but Cohen said the issue of how to dispose of treated wastewater from the new development would be revisited as part of a plant upgrade project.

Some estimates have put the ultimate capacity of an upgraded treatment plant at 4,000 EDUs. But Cohen said his firm only wants the number of EDUs needed for his Showell development, with perhaps 500 or so additional EDUs reserved for Perdue. Cohen said Perdue owns additional acreage in the area and might need additional treatment capacity sometime in the future.

Once plant improvements have been made at ADC expense, the firm would turn the plant over to the county for ownership and operation, together with 1000 or more EDUS that the county could sell on the open market to developers or land owners in the Showell area, including those whose properties are located north of Pitts Road, a main road through Showell, that is designated as a part of the Showell growth area in the draft comprehensive plan.

Assuming that an agreement between ADC and the county is successfully concluded, the county would also be in a position to decide whether to sell EDUs to developers or landowners at the northern terminus of Route 589. Three large parcels would be of particular interest, the Mariner farm on the western side of Route 589, the Nichols farm on the eastern side, and a parcel abutting the Ocean Pines Community Church that is owned by developer Allen Skolnick, once operated as a golf driving range.

All three carry agricultural or estate zoning and are not identified as growth areas in the revised comprehensive plan maps made public.

Another site that is relatively close to Showell is Pine Shore North executive golf course owned by Ocean Pines resident property owner Al Janis. This property carries residential estate zoning and Janis has said he would like to develop the property with townhouses, something usually not possible in an estate zone. 

ADC is not asking to be compensated or for any return on investment for those EDUs that would be transferred to county control as part of the complex arrangement, Cohen said. Elsewhere in the county, developers seek to control and sell EDUs in order to recoup some of the investment in purchasing or upgrading wastewater and water infrastructure, but that is not the case in the proposed Showell sale.

“We don’t think that approach will work in Worcester County,” Cohen said. “We think conveying the plant to the county without a lot of strings is the only way this can work.”

The developer would be retaining EDUs needed for development of the portion of the 362 acres slated for development. An exact number of EDUs would be determined once site plans are drawn up for the property and approved by the county.

Cohen said that while it is early in the process, he envisions that some of the property his firm would acquire could be used to create affordable housing, a long-identified problem in Worcester County where land values have escalated, making housing increasingly difficult to purchase for some county residents.

ADC as a company has been active in Worcester for several years, part of a wave that has brought other regional and national builder/developers into the county. ADC is the developer of Sunset Island in Ocean City, an upscale bayside project, but has sold off parts of it for home construction and sale by other developers, retaining some for itself.

It acquired the Bayside Village property at the foot of the Route 50 bridge in West Ocean City from local developer Jack Burbage, and then sold it to national builder Centex Homes, which is building townhouses for resale on the site. ADC has also partnered with national builder Ryan Homes in the Franklin Knolls project in Berlin.

Elsewhere in Ocean City, ADC developed the 41-unit Laguna Vista condominium project in Ocean City and is in the process of developing the 20-unit Seabright condominium on Philadelphia Avenue at the site of the old icehouse.

Outside of Worcester County, ADC is involved in the Red Mill Pond project in Lewes, De., and a large development in Crisfield in Somerset County.