Gov. Carney announces new Downtown Development District designations

By Ken Mammarella

Gov. John Carney and Connie Holland applaud while Anas Ben Addi, director of the State Housing Authority, addresses the crowd.

Clayton, Delaware City, Middletown and New Castle on Monday were designated Downtown Development Districts, joining Dover, Georgetown, Harrington, Laurel, Milford, Seaford, Smyrna and Wilmington.

Private construction projects within these districts can receive rebates of up to 20 percent of their capital construction costs,from this year’s $8.5 million pool of state funding.

“The workforce of the future wants interesting places to live in and cool things to do,” Gov. John Carney said at a Aug 19 announcement ceremony in Delaware City, also calling the state program “one of the most successful” that he has known in his nearly 30 years in state and local government.

Since the program began in 2014, the state notched $31.6 million in such rebates on $597 million in private investment in total development costs. Those rebates represent only about 5 percent of the total because they cover only capital expenses related to the permanent building, said program manager Penny Pierson. In nine rounds so far, 167 requests for rebates have been qualified, she said.

Applications can come from businesses that own the buildings, homeowners and tenants. Those interested should reach out to their municipality to apply, Pierson said, to ensure that they know all the rules and learn about possible other incentives. “We’re just one incentive, but we’re the largest.”

“This will help get more things done,” said Ken Branner, mayor of Middletown since 1989.

Paul H. Johnson Sr., marking his first month as mayor of Delaware City, said he hoped the program will provide “the resources and confidence to invest in” the 17 acres of Delaware City it covers.

“It helps our downtowns go back to our past glory where people can live, shop and work,” said Anas Ben Addi, director of the Delaware State Housing Authority, which administers the rebates.

The program is limited to a maximum of 15 of the state’s 57 municipalities, and approved municipalities “must have the need, the road map and the plan,” Ben Addi said, adding that they also must have “skin in the game” in the form of things like faster permitting or financial incentives.

The state Department of Planning gives an example of $132,000 in incentives on a $350,000 historic property renovation in Dover, with the Downtown Development District rebate representing half that. The rest involves the building permit fee, tax on the improvement value, business licenses, transfer tax, Kent County grant, city historic property tax credit and state historic preservation tax credit.

Carney said he has enjoyed touring recipients like Stitch House Brewery and Greenhill Pharmacy in Wilmington; House of Coffi and the Grey Fox Grille & Public House in Dover; the Music School of Delaware in Milford; Bob Johnson’s Computer Stuff in Smyrna; and Abbott’s on Broad Creek in Laurel.

Funding is split into three pools: one with maximum awards of $50,000; a second for large projects with maximum awards of $1.5 million statewide; and a third for large projects in the specific districts.

In October, the housing authority will launch a new funding round for large projects, and Pierson expects the application deadline to be mid-January. Applications for small projects are accepted on a rolling basis. The districts are centered on commercial business districts and also include adjacent residential neighborhoods.