By Gwen Guerke, Delaware State News

MILTON - Gary Merz says he's not a hugger.

But the owner of Federal Street Gallery and Espresso Bar admits he couldn't help hugging Wilmington artist and teacher Edward Loper when the venerable 89-year-old agreed to his first Sussex County show in the Milton gallery.

Picture: Antique stores line downtown streets in a town of 2,000 that boasts an active garden club, arts guild and poets society. But town officials recognize that growth comes with a price, as increasing population places more demands on the town's infrastructure. Delaware State News/Gwen Guerke

At the gallery, built about 1920 as the first Sussex Trust Bank, fine art, some pieces priced at more than $10,000, serves as a quiet backdrop for coffees, teas and a small lunch menu.

Mr. Merz and his wife, Gail, an elementary teacher, showcase the works of contemporary watercolorist Charles Colombo, who trained with Frank Schoonover and John McCoy.

The Merzes, who have been in business for three years, say Milton is an arts-friendly community and that's part of the attraction, they believe.

The town boasts an active Milton Arts Guilds, Friends of the Milton Library, Friends of the Milton Theatre and even a Milton Poetry Society.

When the Merzs opened three years ago, they were the only art gallery in town. Now there are three.

The town hosted an art show last month, drawing 36 artists, and another is planned for Oct. 8.

Union Street, one of Milton's main thoroughfares, is lined with colorful flowers - bright yellow hibiscus, red geraniums and colorful petunias in front of antique shops.

Things look bright for Milton residents these days - historic Victorian homes are bright with fresh paint, new roofs and abundant landscaping.

The average price of homes in the town is between $250,000 and $300,000, according to the Office of State Planning.

The ubiquitous Food Lion-Happy Harry's shopping center on Del. 16 is bustling.

And on the south side of town, there's another kind of development - Dogfish Head Brewery in Cannery Village Center and the Federal Street Professional Center being built on the site of the former Hopkins Granary.

Building boom

New homes plus new businesses mean growth.

Town Manager Hal Godwin knows that growth has its challenges.

In Milton's case, the challenge lurks beneath the surface.

Providing optimum wastewater treatment comes with a hefty price tag, and even if it were approved by public referendum, it's one that would take time - time to find a site and funding sources, time to design a plant before an estimated two-year construction project.

Mr. Godwin, who has been at his post for five months, will not even estimate the cost to acquire the land and build a new wastewater plant.

"I'm not going to quote a price," he said. "It will scare everybody to death."

At Tuesday's council meeting, members looked at something that's fast becoming a new norm for former sleepy communities that are, in real estate market lingo, close to the beach - annexation requests.

Three of those annexation requests potentially could mean more than 2,000 new homes, nearly tripling the 800 or so who are now utility customers.

In addition, according to the state planning office's Web site, developments such as Isaac's Glen, Bay Manor and Captain's Run are seeking state approval to build in Sussex County just outside the town.

Isaac's Glen would be northwest of the town and would include 1,104 single-family homes along with townhouses, assisted living homes, a golf course and a small shopping center.

The Bay Manor plan calls for 95 homes near Reynolds Pond, while Captain's Run would have 494 residences.

Milton is growing, said Mr. Godwin, the town's first paid manager.

The former Newark mayor said change is inevitable.

How city leaders decide to manage it could affect residents' lifestyles for decades into the future.

"Growth, change and improvement are all on the horizon, and they're all dependent on one another," he said. "We don't want the negative effects."

At the heart of the town manager's concern is the town's aging sewage treatment plant built on the banks on the Broadkill River.

The plant, constructed in 1966, is rated to handle 350,000 gallons per day. It's been operating at two-thirds of its capacity, according to Mr. Godwin's records.

Mr. Godwin estimates the town has more than 800 utility customers.

The city bills residential customers three times a year for water, sewer and trash, plus a $40 access fee.

Milton's sewer rate is billed at $3 per 1,000 gallons. Mr. Godwin estimates the average homeowner pays $64 each quarter for the sewer portion of the bill.

"The treatment ability of the plant is in trouble. The daily average is close to the maximum of 25,000 gallons," he said.

The treated water is pumped directly into the Broadkill River, and increasing strict environmental regulations strain the plant's capabilities, he said.

"It's like an old car. It runs OK, but it doesn't run as fast," he said.

The town will eventually need a new plant, even to handle the 1,000 housing units that have been approved, but not built.

In order to move into a new house, inspectors certify that the home has functioning and adequate access to a safe and adequate water supply and wastewater treatment.

"It's a political question. How many people do you want to share in the cost?" Mr. Godwin asked.

"Those thousand homes can't be built without water and sewer. If they were built without a sewage plant, it won't be able to handle it. This is about more than downtown redevelopment. This is a very tender history-making moment."

In the 2000 U.S. census, Milton had 1,653 residents.

By Mr. Godwin's count, based upon building permits, there are 2,301 residents.

That figure was accepted by the Delaware Department of Transportation for grant application purposes.

"The fear I have if the townspeople do not embrace annexation, those lands will be developed anyway and we will have no opportunity to be in the income stream," Mr. Godwin said.

Library grows

Milton's library is one of Union Street's anchors.

The newly refurburished building backs onto to Memorial Park, a landscaped public area on the Broadkill River where history books show clipper ships were once built.

Library director Mary Catherine Hopkins is a lifelong resident whose commitment to the town billed as home to five governors ventures well into the community as president of the Lions Club and an active member of the Milton Historical Society.

The library, she is quick to point out, is recognized in the town's 2003 state comprehensive plan, as a vital part of Milton's history and future.

The library was founded in 1875.

The six-member staff moved into its $1.5 million renovated home on Dec. 11, the same day as the annual Milton Holly Festival and House Tour.

Friends of the Milton Library raised $400,000 of that cost, well exceeding the $15,000 goal set by Sussex County Council.

The new stucco exterior is eye-catching, with antique books painted by local Quillen's Signs, decorating the sand-colored stucco.

"It's a work in progress," said Ms. Hopkins, who succeeded Ruth Marvel as library director in 1989.

The Friends are still raising funds to complete the upstairs that will be used for meeting rooms.

Dispute the disruption, Ms. Hopkins and her staff have noticed an increase in circulation, in patron visits and in the use of the meeting rooms.

In an average month, about 4,000 visitors check out 5,000 to 6,000 publications.

"I think that's a lot for a little library in downtown Milton," she said.

"We are a vital part of downtown Milton."

Theater project

Theatergoers can see "Million Dollar Baby" on the screen of the Milton Theatre at 7:30 p.m. July 15 and 16.

The $2.50 ticket price is an opportunity to see an award-winning film and the interior of the theater, another Milton landmark.

Karen Kelly, Milton Development Corp. executive director and also outgoing Milton Chamber of Commerce director, said the movie screening fulfils one part of the theater's mission - to have a multi-use facility.

Since its reopening, the theater with 180 seats from the old Grand Opera House, has been the site for live theater, films, musical entertainment and other community events.

The $1.8 million renovation retained the original art deco murals and raw brick walls.

"We've taken it in small steps with an eye to accommodating audiences safely, but it is a unique space," Ms. Kelly said.

The Friends of the Milton Theatre donated stage curtains, and is selling old seats to continue fund-raising efforts.

"People in the community always step up to the plate when there is an opportunity to give back," Ms. Kelly said.

In addition to trying to develop a solid program schedule, she wants to continue renovations of an upstairs space into administrative offices and dressing rooms.

The theater group is looking to clean up behind the building, providing walkways from Wagamons Pond on Mulberry Street and along the Broadkill River.

"It's a scenic community and we want to take advantage of that and beautify it," Ms. Kelly said.

She's looking ahead to the sixth annual Broadkill River Kayak and Canoe Race, a big fund-raising project to benefit the theater.

"The race itself has become a big deal, but we think it's important to keep it friendly and with a family atmosphere for the recreational paddler as well," Ms. Kelly said.

"It's quite obvious at the amount of development being staged. We hope to be more active in bringing business into the town center."

In a vacant storefront just across the street, a sign announces that Irish Eyes is coming soon.

Irish Eyes is a tavern-restaurant with locations in Lewes and Rehoboth Beach.

"Our draw is both from the north and south. People at the beach come here to get out of that traffic, and we also draw from Georgetown and Milford," Ms. Kelly said.

"We can't hold a symphony, but we can do a really nice quartet. This reflects the character of the town, historic and unique. The theater was a gathering place. In its resurrection, it can become a central part of downtown and draw all kinds of audiences."

Managing growth

Like these other folks in Milton, Gene Dvornick, wears several hats.

He heads Pintail Management Co., owner of the 100,000-square-foot Dogfish Head Brewery property, and the former Hopkins Granery and Drapery Cannery lands, site of the new commercial construction that will house Tidewater Physical Therapy and a Beebe Lab Express.

The Milton resident also serves on town council and as treasurer of the Milton Historical Society, overseeing the $400,000 restoration of the Lydia B. Cannon Museum.

In fact, the historical society has raised $383,000 and is about to launch a community giving campaign to reach its goal.

Earlier this week, construction workers swarmed on the structure across from the Milton library.

Mr. Dvornick said he expects the building to be finished in late fall, with new exhibits opening next spring.

He says Milton residents love its character and charm, qualities they want to retain.

"People in Milton like the look and feel of the town and want to manage growth to maintain that charm," he said.

"We have to plan growth, so we can absorb it in orderly fashion."

If you go

Upcoming Milton events:

Concerts in the Park - 7 p.m. each Wednesday

Broadkill Kayak and Canoe Races - Aug. 27

Bargain$ on the Broadkill - Aug. 27

Fourth annual Waterfowl Festival - Oct. 8

"The Fantastiks," community theater - Oct. 14-16, 22, 23

Staff writer Gwen Guerke can be reached at tell2gwen@aol.com.