Areas of New Castle County hit especially hard by the recession could benefit from a component of the federal stimulus package designed to encourage infrastructure investment.
The county has been approved for $126 million in "Recovery Zone Bonds" by the federal government, allowing it to target construction projects to areas of that need it the most.
The bonds come in two forms: $50 million for county projects and $76 million that can be allocated to prompt economic development by private and non-profit sectors.
To entice the county to spend the money, the feds are offering to subsidize nearly half of the interest payments on the $50 million. For the private sector loans, the county would assume no risk, as only credit-worthy borrowers can get loans, according to the county's bond counsel, Tim Frey.
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Recovery Zone Bonds Counties and cities with populations over 100,000 are eligible for these federally-designated bonds. Divided between the three counties and two types of bonds, Delaware has been allocated $209 million in issuance authority. New Castle County: $50 million: governmental $76 million: private activity Kent County: $22.5 million: governmental $34 million: private activity Sussex County: $17 million: governmental $25 million: private activity |
Before the county can start doling out these conduit loans, the government must first designate its "Recovery Zone." Using a combination of household income, unemployment, foreclosures and other indicators, the county has designated an area it believes fits the federal criteria.
The county council will vote on those boundaries at its July 28 meeting. The area includes much of the county, omitting only Western Brandywine Hundred, Greenville, Hockessin, parts of Newark and some areas south of the Chesapeake & Delaware Canal.
The bonds must be issued by Dec. 10, 2010.
Nicole Majeski, policy director for County Executive Chris Coons, said the administration will likely seek to fund sewer projects and other infrastructure upkeep.
Councilman David Tackett (D-Christiana) called the recovery bonds a good opportunity, but cautioned against the perception that the county had come upon found money.
"We also need to be looking at a plan for paying these back, because they are bonds, not grants."
