This story was produced by Spotlight Delaware as part of a partnership with Delaware Online/The News Journal. For more about Spotlight Delaware, visit www.spotlightdelaware.org.
Delaware’s warehouse building boom that began during COVID is not over yet.
German grocer Aldi captured a $5.3 million grant from Delaware taxpayers to help fund its construction of a new robotics-assisted distribution center south of New Castle on March 31. The two-story, 1.1 million-square-foot complex is planned for a site next to an existing Amazon warehouse on U.S. Route 13, according to plans submitted to New Castle County in January.
Those plans were filed despite Delaware’s market for big warehouses cooling in recent months, with at least one big project sitting without a tenant just a few miles away.
They also came a year after a backlash against massive warehouse projects – and the truck traffic they bring – became the biggest political controversy in New Castle County under then-Executive Matt Meyer, who now is Delaware’s governor.
The future Aldi distribution warehouse is seen in this rendering.
Aldi’s plans call for a warehouse with spaces for 184 tractor-trailers.
Company officials said Monday, March 31, during a meeting of Delaware’s Council on Development Finance that the project would be the company’s biggest ever in the United States.
They estimated the construction costs at $550 million – a substantial sum for the warehouse market, due in part because Aldi plans for the facility to lead a new age of robotics-heavy distribution centers.
By comparison, Amazon’s largest facility in Delaware – its Boxwood Road plant near Newport – was built at a reported cost of $250 million. That five-story building, which opened in 2021, is more than three times larger than Aldi’s planned facility.
When operational in 2030, Aldi’s distribution center would employ 225 people who would earn between $45,000 and $90,000 annually, according to county filings.
Those employees will work alongside an “automated storage retrieval system,” according to Megan Kopistecki, business development manager at the Delaware Prosperity Partnership.
Views from the new Aldi grocery store on North DuPont Highway in Dover. The new store will be holding a grand opening on Thursday.
The Delaware Prosperity Partnership is a state-chartered, public-private entity tasked with negotiating taxpayer grant awards with private businesses, including the one with Aldi. Those negotiated deals are then presented to the state’s Council on Development Finance, which has final authority on whether to grant taxpayer-backed funds to projects.
At the end of its March 31 meeting, the council voted to approve a $5.34 million grant to support Aldi’s project.
The meeting was the second to occur under the administration of Gov. Matt Meyer, with February’s featuring the approval of a $30 million grant to pharmaceutical company Merck & Co. on the condition it expands operations to a location near Wilmington.
Early this year, Meyer pledged to direct Delaware economic development officials to award smaller-dollar awards to private companies.
The negotiations of Merck’s and Aldi’s relatively large grants both began before Meyer came to office in January.
The Council on Development Finance has approved every request for taxpayer dollars from companies brought by the Delaware Prosperity Partnership since it was created in 2017.
Before that time, state grants to businesses were negotiated by state employees, whose activities could be publicly scrutinized through the Freedom of Information Act.
Beyond its permanent jobs, Aldi’s warehouse project also would temporarily create work for between 500 and 700 construction workers, said Adam Kastl, Aldi’s director of warehouse development, during Monday’s meeting.
Following Kastl’s comments, Council on Development Finance member Rep. Ed Osienski, D-Newark, asked if Aldi’s construction contract would be awarded to firms that use Delaware unionized workers.
Rep. Edward Osienski (D-24th) the house majority whip, speaks on the first day of the legislative session of the 153rd General Assembly at Legislative Hall in Dover, Tuesday, Jan. 14, 2025.
Repeating a frequent refrain from Delaware labor advocates, Osienski said, “We want to make sure that we don’t see a construction contract full of out-of-state tags.”
Several members of Delaware trade unions were in attendance at the March 31 meeting to show support for Osieski’s call for the warehouse to be built by organized labor.
In response, Kastl did not commit to using organized labor, saying instead that “we are openly committed to allowing all Delaware subcontractors to incorporate bids into the project.”
In an interview with Spotlight Delaware following the meeting on March 31, Jim Ascione, treasurer of the Delaware Building and Construction Trades Council, said in-state workers should benefit when construction is aided by taxpayers’ grants.
The future Aldi distribution center would replace this field beside the Amazon distribution center at Blue Diamond Park off U.S. Route 13.
The way to ensure that, he argued, is for companies to hire workers through local union halls.
Toward the end of the March 31 meeting, Aldi’s local attorney Shawn Tucker testified to the council that he expects New Castle County to approve Aldi’s building plans by the end of this summer.
He said there is already a land-use approval for a warehouse at the site after another company had considered building there two years ago.
In January, Aldi’s engineering company submitted a minor redevelopment land development plan to New Castle County regulators for approval.
