February  15,  2012

County launches push for
economic development

The Clark administration unveiled an ambitious economic development plan intended, officials said, to speed up recovery of the local economy from the so-called Great Recession and to stimulate creation of jobs in the county.

In a highly unusual appearance before a County Council committee, County Executive Paul Clark said he could not "guarantee that we will nurture a bumper crop of jobs." But, he added, "even if a few of these [measures] hit good soil and take root that means some of our citizens will get jobs."

Drawing on his background as a horticulturalist he has labeled the nine-part plan 'Sowing Seeds, Growing Jobs'.

With a coterie of representatives from the business and development communities present for the finance committee meeting on Feb. 14, Clark urged Council members to take quick action to make the county "fertile ground where jobs can possibly grow."

The plan, which obviously had been quietly vetted in those circles, received immediate endorsement from New Castle County Chamber of Commerce, the pro-development Committee of 100, Delaware Building & Construction Trades Council and Delaware Economic Development Office. Those groups and others have previously branded county government unfriendly to business and anti-development.

Council members also appeared supportive of the plan. They will receive an ordinance to implement a partial property tax exemption for new construction related to commercial or industrial expansion at Council's Feb. 21 plenary session and possibly act on it on Mar.6.

In addition to the rebate, new and expanding businesses are to receive expedited processing of land use applications. In his presentation before the committee Karl Kalbacher, the county's director of economic development, said that will not lessen the public's ability to comment on specific proposals as they go through the land-use approval process.

Clark has already hired Terry Reilly to serve as a small business advocate. A press statement issued concurrently by Clark's office said Reilly fills a vacant executive assistant position in the executive office.

Other parts of the plan:

● Creation of an "economic development strategy" to promote growth of the Port of Wilmington and New Castle County Airport and to attract businesses to the area along New Castle Avenue and Du Pont Highway between Wilmington and the State Road intersection southwest of New Castle.

● Provide contributory grants to nonprofit organizations, community groups and municipalities to help finance economic development projects and initiatives.

● Leverage money received through the federal Neighborhood Stabilization Program to acquire and rehabilitate residential properties in "neighborhoods hit hardest by foreclosures."

● Provide reduced-interest financing to businesses and nonprofit organizations through federally supported qualified energy conservation bonds

● Expand the existing 'Buy From Your Neighbor' program to include other than farm products originating in the county.

● Increase and speed up capital projects involving sewers, libraries and parks to provide construction and related jobs.

Kalbacher told the finance committee that the rate of recovery of the Delaware economy ranks with states in the second lowest of seven levels. All of the surrounding states have higher rates. Specifically, he said, retail-space vacancies near 11% are at a 20-year high and 21% office vacancies are almost twice the national average. Sheriff sales in 2011 were 20% higher than in the previous year and more businesses closed in Delaware in 2010, the latest year for which data is available, than opened.

The tax exemption would apply to the increase in county property tax as a result of additional assessed value attributed to new commercial or industrial construction valued at $50,000 or more. Available after July 1 and during the following five fiscal years, the exemption would last for three years from the effective date of the higher assessment. County government already participates in a more liberal exemption available for expansion in Wilmington and Newark also provides an exemption.

Kalbacher said state law limits an exemption to just the county tax portion of the total property-tax bill. That is considerably lessthan the tax levied by school districts.

The fiscal note on the draft legislation distributed at the committee meeting puts the five-year cost of the exemption at $1,850,0000 but the county would expect to receive $2.7 million in permit charges and fees as well as revenue from any property transfer tax generated by economic development.

Kalbacher said the county has received grants totaling $53,400 toward the $93,400 cost of the consultant work to create the "economic development strategy" for the corridor defined by U.S. Route 13 and Delaware 9.

Initially $50,000 would be made available for community economic development grants. That, he said, would likely provide for two or three awards determined on a competitive basis and requiring recipients to put up matching funds.

"This is a really good-looking program," fiscally conservative Council President Tom Kovach said. Eventually, he added, "it's going to pay for itself" through additional revenue generated by economic expansion. "If businesses was coming in on its own, we wouldn't need these incentives," he added.

"We can't promise any specific number of jobs" to be created by the plan, Kalbacher said. "We're going to throw a lot of creative programs at the problem and hope they stick."

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