GEORGETOWN, Del. — The developers behind the proposed Atlantic Fields shopping center have filed a lawsuit in the Delaware Court of Chancery challenging Sussex County Council’s unanimous denial of the project.
Mulberry Knoll Associates LLC and J.G. Townsend Jr. & Co. filed a verified complaint Feb. 12 seeking to overturn the council’s Jan. 13 vote rejecting a rezoning application for 73.457 acres along Route 24 near Mulberry Knoll Road.
The proposed development, known as Atlantic Fields, included plans for 23 buildings totaling about 665,000 square feet of retail space. Developers previously said major retailers such as Costco, Target and Whole Foods were planned, with TJ Maxx and Ross in negotiations to join the center.
In the lawsuit, the developers argue the county’s denial was “arbitrary, capricious and not supported by the record or applicable law.” They are asking the court to issue a permanent injunction voiding the council’s vote and to order a new hearing and vote.
A spokesperson for Sussex County declined to comment, saying "per the County's longstanding policy, it does not comment on matters of litigation."
According to county documents, the Atlantic Fields development would have included 23 buildings and feature major retailers such as Costco, Target and Whole Foods. Developers also confirmed that TJ Maxx and Ross were in negotiations to join the shopping center.
The complaint states the property is designated as a “commercial area” in Sussex County’s Comprehensive Plan but remains zoned AR-1, which does not allow large-scale retail uses. The developers argue state law requires zoning to align with the county’s future land use map, which they say has the “force of law.”
The lawsuit also challenges comments made during the council’s vote and argue the project complied with the Henlopen Transportation Improvement District agreement.
During the Jan. 13 meeting, Councilman Steve McCarron said the council was “forced” to deny the project, citing infrastructure concerns.
“Sussex County cannot continue to serve as the ATM for the rest of the state while receiving inadequate infrastructure in return,” McCarron said at the time.
The complaint argues that relying on future road improvement timelines or misunderstanding traffic obligations under the district agreement was improper.
The developers say they have spent more than two-and-a-half years and over $3.5 million preparing the rezoning application. The Sussex County Planning & Zoning Commission voted 4-1 in October 2025 to recommend approval before the county council ultimately denied it in a 5-0 vote.
