New Castle County Council approved legislation Tuesday that clears the way for the developers of the former Brookview site in Claymont to formally request a special financing arrangement.
The Council voted 11-2 to declare the county’s intent to take out an $18 million bond that would be used to cover many of the up-front costs associated with the project – demolition, asbestos removal, road construction and sewer rehabilitation.
It's a funding strategy that's new to Delaware called Tax Incremental Financing, where the bond would be paid off by a special property tax assessed to those who purchase homes in the 1,226-unit Renaissance Village that is planned for the site. Additional interest would be paid down by a percentage of the new property taxes the county would bring in from the rehabilitated site.
Councilman John Cartier (D-Claymont) said formal legislation would still be required for the county to take out the bond, but said this step was required by the federal tax code.
“All this does is set a date that will allow the developer to apply proceeds from a bond purchase to the work at the former Brookview site,” he said. “It’s a tool used all across the United States to help underwrite the cost of redevelopment projects, which are important because they reuse old sites and help revitalize existing communities.”
Bob Ruggio, senior vice president of the Commonwealth Group, which is partnering with Setting Properties on the Renaissance Village project, called the vote an important milestone.
“This allows us to get our request in front of council,” he said. “It’s a necessary part of the process so we can come back with legislation that can be reviewed by council and finance officials.”
Councilmen Penrose Hollins (D-Wilmington North) and Jea Street (D-Wilmington South) both voted against the proposal.
