After their predecessors asked county staff and state legislators to give serious consideration in 2009 to authorizing Sussex County to create special development tax districts designed to help pay for improvements in or near developments, the current group of county council members this week showed scant support for the idea.
County Administrator David Baker noted at the council’s Jan. 26 meeting that the state enabling legislation for special development districts (SDDs) did not pass in 2009, “primarily because of concerns about which levels of the county it would apply to.”
“Some do not believe the county should have this ability in Level 4,” he said, pointing to the state’s multi-tiered development area designations, in which Level 4 areas are not supposed to receive state funding for infrastructure and other improvements. The system was designed to encourage development around existing towns and other population areas.
“They are a means of financing infrastructure,” Baker described of SDDs for the new faces on the council and as a refresher for the veterans. Several municipalities in the state, including Millville, have had the necessary enabling legislation passed by the Delaware General Assembly in previous sessions for them to be able to create SDDs. Already, Bridgeville and Millsboro have communities where SDDs have been created, including the Heritage Shores community in Bridgeville.
SDDs are a “defined geographic area established at the request of the owner or owners of the property to finance improvements to that district,” such as for streetlights, stormwater and recreation facilities.
If Sussex County were to be given the enabling legislation to create SDDs within county-controlled areas of the state, the county would be able to create and issue special obligation bonds for such projects. To do so would require two-thirds of the owners or owners of two-thirds of the affected acreage to approve the creation of the SDD, subject to conditions imposed on a case-by-case basis.
SDDs are issued for a specific purpose, and cause a special tax to be levied on property in that district, the proceeds from which is used to pay debt service on the costs of the project, until they are paid off. The county would not pledge its full faith and credit in support of the loans, and they must be used for items and costs that directly benefit the district, such as stormwater, sewer, roads, lighting, parks, open space, libraries, fire service, farmland preservation, solid waste, landscaping and traffic.
If the county were to create SDDs, the county could control what items the proceeds of the taxes could go toward, as well as limit amounts levied to the total cost of off-site improvements, with other improvements required to be funded by lot sales.
The enabling legislation would also enable the county to establish tax increment financing (TIF), which Baker said was “not really practical for us at this time,” due to the county’s low tax rates, but is similar to the SDDs, though it is most often used for industrial projects.
Councilman George Cole questioned on Tuesday why the issue was even on the council’s agenda.
“One developer initiated this,” he emphasized, adding that then-County Administrator Bob Stickels had looked into the concept and told the council it was primarily used for brownfields and industrial sites, and that most of those who had SDDs in place didn’t recommend them for Sussex.
Former County Councilman Dale Dukes “talked about sidewalks,” Cole recalled. “We require them now, and the developer pays for it, and the cost is passed along to the buyers.”
He said even the prior council had expressed concern about on-site improvements being paid for through SDDs.
“The majority of that council said, if we do it, it’s for off-site improvements,” Cole said. “The question is how far you can go to tax people for a streetlight a mile down the road, or for stormwater a mile down the road. I didn’t read that we were supportive.”
Baker said the council had supported pursuing the enabling legislation on a 3-2 vote, though the concerns Cole recalled were also noted, with the notion that the county could limit SDDs to the value of off-site improvements.
“Already, DelDOT negotiates with the developers for improvements at these intersections,” Cole replied. As for on-site improvements, Cole said, “We’ve had a lot of developments already, and they’ve been putting in streetlights and sidewalks. I don’t like addressing some of our infrastructure problems with this special thing” of which initial reports had not been in support, he added.
Councilwoman Joan Deaver said she wasn’t seeing much support for the idea in her district.
“I have been sending out a questionnaire to my constituents,” she said, “and not a single one of them wants it.” She said they’d given her various reasons for opposing county-created SDDs.
Deaver, too, questioned why the issue was on the council’s agenda, to which Baker replied that he and Deputy Administrator Hal Godwin were bringing up the issue to see if the county council would be supportive of a bill of this nature in the upcoming legislative session.
“We do not have a particular developer pushing it at this time,” Baker allowed.
Deaver was plain about her lack of support for SDDs on the county level.
“I can’t see where would ever support something like this,” she said. “It’s not good planning.”
With a lack of stated support among the four council members present on Jan. 26, council Vice President Michael Vincent, who presided over the meeting, noted that if a council member wanted to put the issue on a future agenda they could, but pursued no action on it on Tuesday.
Economic development liaison pays council a visit
Also on Jan. 26, the council received a visit from Melody Booker, business development leader for Sussex County in the Delaware Economic Development Office (DEDO).
Booker was hired last year to serve in the new role and said she’d come to see the council, in part, to meet the council members – as she had only previously worked with Vincent.
Describing her position as “ever-evolving,” Booker said she was “asking for support within each of the constituent areas and municipality leaderships” in Sussex, with a proactive approach such that if a new business is thinking about relocating into Sussex, “they’re calling me to ask to meet with them and us together.”
“I’ll be more than happy to be your point-person as pertains to Sussex County,” she offered.
Booker pointed to recent activity by DEDO to publicize the state’s $5 million LIFT program, designed to help existing businesses that have a line of credit with banks, through having the State of Delaware pay the interest on that existing line of credit for up to two years.
Thus far, 38 businesses have taken advantage of the program. Qualifying businesses are supposed to have three years in business, an existing line of credit and between three and 50 employees, but Booker said, “DEDO has been ‘bending the rules’ because we feel a need to really reach out to these businesses.”
Bending those rules, she said, recognizes that some businesses are in “dire need of financial help” and might need to be accommodated for situations such as having just two employees.
“I go back to our capital resources team,” she said. “I ask them what the maximum amount of the loans will be, how much DEDO will contribute.” The operation of the program, she said, is “ever-evolving, depending on the businesses’ needs.”
Asked to speak to what might draw businesses to Sussex, Booker said, “It’s a great place to do business,” noting the county’s relationships with the business community and the “agility we have to turn around requests in as expedient a fashion as possible.” She also noted Delaware’s “beauty, family-orientation, pride and the pro-business way of looking at things.”
Baker praised efforts to improve economic development programs in Sussex, noting that businesses previously had to offer a minimum of a $40,000 per year average salary for it to be eligible for aid. That figure is closer to $20,000 now, he said, offering a significant impact in Sussex.
Despite the positive note set by Booker in her presentation to the council, Councilman Sam Wilson expressed strong concerns about whether businesses would find Delaware, or Sussex, a business-friendly place to locate.
“Concerns have been expressed about our infrastructure not being business-friendly,” Wilson said. “We give people a hard time about entrances,” he added, also blaming environmental regulations and fines for driving oil and auto-manufacturing businesses out of the state.
“If I was a businessperson, I would take a hard look at this before I’d think of relocating to Sussex County,” he said. “I don’t think that we’re really business-friendly.” He asked Booker to pass along a message to Gov. Jack Markell about those concerns, and saying that he felt Sussex County shouldn’t “bail out” the state during its financial difficulties.
Anti-gambling resolution gets another push
Finally on Tuesday, resident Eric Bodenweiser again asked for the council’s support for a proposed resolution against expanding gambling in Sussex County.
Returning to his prior theme of concern for potential gambling addiction among Sussex County residents if gambling venues were to be located in the county, Bodenweiser said he felt the issue was an appropriate one for the county council to address, since it has made grants in the past to organizations that deal with addiction.
In the end, he added, “It does not matter what reasons you put on the resolution. You do not even have to give a reason why you’re against it.”
Bodenweiser told the council that he also believes that possible table games that could come along with gambling establishments in Sussex County are unconstitutional and that he had concerns about legal troubles for the county should such establishments come into the area. He appealed for the council to put his proposed agenda on its agenda for Feb. 2, for possible action.