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6/11/2008
Councilman Weiner Supports Tax Incremental Financing for Claymont Renaissance Village - News Journal


Councilman Robert Weiner also is advocating the financing, saying the public and officials will become more comfortable with the idea as they learn more about it.

Tax Increment Financing has been widely used in 48 states to spruce up downtowns, rehabilitate historic homes, rebuild substandard structures and help economically depressed areas.

"Once we feel comfortable with this, this will be another working tool for us to deal with areas that are blighted," Weiner said.

BY THE NUMBERS
Estimates provided by The Commonwealth Group, based on 30-year period
$15 to $18 million: Amount of original bond
$40 million: Amortized debt on the bond
$7.7 million: Amount of debt paid with property taxes as site goes up in value
$37.9 million: Amount of debt paid with Special Development District fee
$5.7 million: Net tax revenue, goes to county or creditors

NCCo weighs tax financing for project
Bond proceeds would be given to developer
BY ANGIE BASIOUNY • THE NEWS JOURNAL • JUNE 11, 2008

New Castle County's elected leaders are trying to learn more about a specialized form of public financing called Tax Increment Financing before deciding whether to help a developer with an ambitious project in Claymont.

Council members spent several hours Tuesday discussing the idea with The Commonwealth Group and Setting Properties, Wilmington-based developers who are seeking the money to move along their efforts to turn the former dilapidated Brookview apartments off Darley Road into a new town center called Renaissance Village.

The nearly three-hour question-and-answer session was the first time the partners gave detailed information to the public about what they want, why they need it and how it would work.

With Tax Increment Financing -- which has never been used in Delaware -- a government sells bonds and the money is given to a developer as reimbursement for infrastructure costs on a project. The additional property tax gained as the value of the site increases goes to pay off the bond, rather than into county coffers.

Another method of financing the partners want is called a Special Development District, which also requires the sale of a bond to reimburse a developer for infrastructure. But the debt is paid off through the collection of a flat fee charged to every property owner within the district.

At Renaissance Village, that cost would be about $700 a year for homeowners, said Commonwealth Group Chief Executive Officer Brock Vinton.

"We're asking for consideration of Tax Increment Financing legislation," Vinton told council members. "As this site is developed, it's going to create a whole new tax base for the county."

The companies bought the property for $32 million in late 2005, before the real estate market cooled, and razed the 66-acre plot last year.

Their plan for Renaissance Village calls for a mix of dwellings, retail and commercial space that will be built in phases. The developers hope to sell the first parcel to a home builder who will break ground by fall.

Several council members are already sold on the idea of special financing to help Renaissance Village. Long considered the key to Claymont's revitalization, the project design was the result of months of public workshops that drew input from area residents.

Councilman John Cartier, whose district includes the property, said the investment the county would make pales in comparison to the amount of police and code-enforcement resources the neighborhood soaked up for years when it was blighted.

"I'm feeling very, very positive about the financial data and benefit to this county that is projected," Cartier said.

Councilman Robert Weiner also is advocating the financing, saying the public and officials will become more comfortable with the idea as they learn more about it.

Tax Increment Financing has been widely used in 48 states to spruce up downtowns, rehabilitate historic homes, rebuild substandard structures and help economically depressed areas.

"Once we feel comfortable with this, this will be another working tool for us to deal with areas that are blighted," Weiner said.

But Councilman Jea P. Street is not convinced.

"I feel like I'm in the master sales pitch today," he said. "I feel like I need to hear from the critics, from those who don't support this."

Contact Angie Basiouny at 324-2796 or abasiouny@delawareonline.com.

 

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