A housing development slated for the former Our Lady of Grace orphanage site on East Chestnut Hill Road is still drawing heat from neighbors even after developers scaled back their proposal for the second time.

Joe Setting and Greg Lingo of Montchanin-based Setting Properties Inc., want to build 265 homes and low-income apartments in the northwest corner of a 181-acre parcel of land east of Newark at 487 E. Chestnut Hill Road, which is owned by The Felician Sisters of North America Real Estate Holding Corporation.

The plan, presented to the New Castle County Planning Board on Tuesday, is the third version of their proposal. However, neighbors who live nearby remain concerned that the additional residents will increase traffic, burden the school district and put stress on the existing water and sewer systems.

The property includes the shuttered orphanage and an expansive open space that extends behind the Todd Estates neighborhood. Before it closed, Our Lady of Grace often rented out part of that space for circuses and other events.

The Sisters have been attempting to develop the property into low-income housing for several years, but their progress depended upon the availability of federal tax credits.

The original plan for the parcel, presented at a public meeting in July, called for 282 townhouses, duplexes and single-family homes costing between $200,000 and $300,000, and 60 low-income apartments that the Felician Sisters planned to build on a small portion of the land and market toward families with incomes between $25,000 and $48,000.

Of the 181 acres on the property, 137 acres would have been left as open space, serving as a buffer between the new homes and the neighborhoods behind the property, such as Breezewood and Gender Woods. However, the new construction was expected to directly border Todd Estates, which upset many nearby residents.

In December, the number of units was reduced to 269 in order to address concerns expressed by neighbors, elected officials and the Delaware Department of Natural Resources and Environmental Control regarding the negative impact on the wetlands surrounding the proposed development.

The woodlands on the property contain seasonal ponds and vernal pools, the largest of which is referred to as Ogletown Pond. Vernal pools are temporary bodies of water, usually devoid of fish, that provide a safe breeding ground for amphibians and insects. The original plan would have encroached upon the 450-foot wooded buffer necessary for those species to breed.

The plan released in December redesigned the subdivision to address those environmental issues, shifting the lots previously around Ogletown Pond to the bottom left of the development. Connecting roads with neighboring Breezewood and Todd Estates were eliminated at the request of neighbors, which means residents will have to enter the new neighborhood off Route 4.

On Tuesday night, Larry Tarabicos, an attorney for the developers, presented the planning board with another scaled back version of the project, this time showing 265 units.

He said 80 precent of the property — approximately 145 acres — will be left as open space and, unlike the previous plans, the current version of the project no longer impacts the wetlands. In addition, he assured the board that the 60 low-income apartments on the orphanage site will not be Section 8 housing, but “affordable housing.”

“The rents will range, and the income levels will range,” Tarabicos said.

Still, several nearby neighbors felt the changes weren’t enough and took to the mic to oppose the project during the hearing.

Frank Warnock of Harmony Woods — which does not border the Felician Sisters’ property – said he bikes in the area and is concerned about increased traffic as well as the impact on existing intersections he described as overcrowded and already in “failure mode.”

Last summer, Warnock started a group called “Save Ogletown Pond” along with Todd Estates resident Angela Connolly in the hopes of convincing DNREC to designate the land a “critical natural area.” The designation, which was recently granted, stipulates additional protective thresholds regarding how much woodland can be developed on the property under the current New Castle County Unified Development Code. Warnock said the designation caused the developers to redesign the project away from the vernal pools.

Resident Lou Donovan told the board he is worried about flooding from the new neighborhood as well as the impact on the woodland area, which is home species like frogs, turtles, deer, rabbits and migrating birds. Although the plan no longer impacts the pools, the developer will still be tearing down trees to construct homes and pave streets.

“That area is huge with environmental animals,” Donovan said.

He added that he also doesn’t want more children in the Christina School District. Schools in the area are currently dealing with limited programs, overcrowding and budgetary issues.

“Am I really upset about it? I really am,” Donovan said.

Karen Garrett, who lives in Breezewood, said her neighborhood already has drainage problems that will only get worse if hundreds of homes are built next door.

“My backyard is a pool,” she said.

Garrett begged the Felician Sisters and the developers to reconsider the project and think about donating the land for a county park. If they can’t afford to donate the property, she said, New Castle County should buy it.

“Find a way, please,” she said.

Several other members of the public who opposed the project Tuesday night were concerned about safety and increased crime from the low-income apartments as well as a rumored cut through into the development via Waverly Drive.

Earlier this week, County Councilwoman Lisa Diller sent a letter alerting constituents that the Delaware Department of Transportation is requiring a road connecting the new neighborhood to Breezewood. She said there is currently no left turn out of the proposed community onto Route 4 and that a cut through would allow the new residents to come out to Gender Road and make a left turn onto Route 4.

Tarabicos, however, insisted that the developers are not interested in connecting the new neighborhood to Breezewood but would create the access way if DelDOT required it.

Pam Evans, who lives in Breezewood, questioned the Felician Sisters’ mission and why they want to provide low-income housing to outsiders instead of “giving back to the community that supported them.”

“Where are the nuns?” she asked. “Why aren’t they here?”

Resident Don Sharp was angry as well, but mostly in shock.

“I can’t believe the nuns want to do this,” he said. “Their hearts are in the right place, but not the right place.”

The planning board did not make any recommendations or decisions during the public hearing Tuesday night, as the project is still in the exploratory phase.

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