The Sussex County Council this week heard a presentation regarding the Delaware Downtown Development District program.
The Down Town Development District Act was created in 2014 by the state legislature to leverage state resources in a limited number of designated areas in Delaware’s cities and towns to spur private investment in commercial business districts and other neighborhoods, while improving the commercial vitality.
“This is the first time we’ve seen an administration step on board from a state perspective to support development and redevelopment in our downtowns,” said Diane Laird, the Delaware Economic Development Office’s (DEDO’s) Downtown Delaware coordinator. “The primary reason purpose behind the DDD is to spur capital investment. This is the State coming behind city governments and private investors to encourage investment in our downtowns throughout the state.”
Laird said the program was modeled after a very successful program in Virginia, which only focused on commercial redevelopment.
“[Delaware’s program] is to assist municipalities and strengthen neighborhoods,” said Laird. “It’s easier to recruit new businesses to the state when we have strong downtowns that provide good quality of life.”
According to the Delaware State Housing Authority, “eligibility for the District Grant is based on Qualified Real Property Investments (QRPI) made to commercial, industrial, residential, and mixed-use buildings or facilities located within the boundaries of a District. Qualified District Investors making a QRPI are entitled to a District Grant in an amount up to 20 percent of the QRPI in excess of the Minimum Qualified Investment Threshold of $25,000…
“Qualified District Investors making QRPIs are entitled to a District Grant in an amount of 20 percent of the QRPI in excess of the Minimum Qualified Investment Threshold up to $500,000 per building or facility. District Grants in excess of $500,000 will be calculated at a lower rate up to an additional $500,000 for a maximum District Grant of $1,000,000.”
The grant is limited to $1,000,000 per building or facility within a five-consecutive-year period starting with the year in which a grant was first awarded.
In its first round, the State received nine grant applications, all of which “required a plan and a vision for a designated area.”
Laird said this year, Wilmington, Seaford and Dover received grants from the State, chosen by Gov. Jack Markell.
“These are our state’s first three designated districts, one in each county,” she said. “We anticipate additional ones as funds are made available. We don’t have a time frame... it is a periodic addition of communities.”
She added that the program can provide a bridge for a gap in financing that may not otherwise be bridged.
“This is intended to be a very long-term program.”
Councilman Sam Wilson asked Laird where the money to fund the act was coming from.
“It’s $7,000 from the legislature,” she said.
Wilson questioned how the grant would benefit the average taxpayer.
“The bottom line — a strong downtown is enjoyed by the masses,” responded Laird. “If a building is worth $100,000 and needs $250,000 in improvements, they’re never going to make a change, and then we, as a state, suffer with poor downtowns.”
Wilson said the he had concerns with the program due to how it is funded.
“It sounds lovely to help other people, but in order to help you have to take money from somebody else, and not everyone is rich.”
“I’m of the opinion that a strong downtown helps everyone,” said Laird.
Councilman Rob Arlett said he understood that the council was receiving an informal presentation and thanked Laird for her time.
“I would say, I want to commend the governor and the State for putting a focus on economic development. I think it’s very vital that our residents have opportunity in Sussex County.”
Sussex County Economic Development Director Melody Booker-Wilkins informed council that the Kent County Levy Court has allotted $200,000 from their General Fund Realty Transfer Tax Reserves to the General Government Capital Projects fund.
“It’s a matching grant incentive that is to be utilized in the designated Downtown District,” she said. “Kent County’s match will represent 50 cents for every dollar in State grant awarded, up to a maximum of $10,000 per investment.”
Councilwoman Joan Deaver asked if Kent County was “unique” in the matching grant idea.
Booker-Wilkins said that, so far, she is only aware of Kent County coming forward to complement the existing program.
“I’m so pleased we’re putting some focus on Sussex County’s economic development,” said Arlett, “because we must do a better job and create some private-sector jobs, and help our residents.
“It does slightly concern me about the grants,” he acknowledged. “I think I’m more of the mindset that it’s maybe a loan of sorts. I think in the business world there is no free lunch, and I think it also provides an incentive to the business owner if they go out and create and produce, versus being given something.
“But I think we’re moving in the right direction. We’re at least having a dialogue… So we’re grateful for that.”.