It's hard to imagine cows grazing in Claymont, but in the eyes of the U.S. Department of Agriculture, it might as well be farmland.
And that's good news for the developers of Darley Green, the largest redevelopment project in the history of unincorporated New Castle County.
That's because the "rural" designation will allow the developers -- via New Castle County -- to apply for low-interest federal loans to fund the construction of sewer and storm water infrastructure within the 66-acre property.
The Department of Agriculture loans are available to any census tract with a population under 10,000 people, and which are designated for tax incremental financing (TIF).
A popular redevelopment tool across the country, the designation was granted to Darley Green by New Castle County back in 2008. Two projects in Sussex County are also being financed, in part, through TIF.
Under TIF, any loans or bonds that fund infrastructure improvements will be paid off by a special property tax assessed only to those who purchase homes within the 1,226-unit community. Additional interest would be paid down by a percentage of the new property taxes the county would bring in from the rehabilitated site.
The county previously collected just $32,000 annually there from the Brookview Town Homes, which have since been demolished. With the proposed homes ranging from $200,000 to $350,000, the new tax base will be exponentially higher.
The county's role in all of this is essentially administrative. It's the county that has to apply to the Department of Agriculture for the loans, but the government is not in any way responsible for repaying them.
Tim Fry, the county’s bond counsel, said the county's AAA bond rating would not be affected and said only the developer -- the Commonwealth-Setting Group -- would be on the hook for repaying the bonds. If it were somehow to go bankrupt, a lien would be placed against the property it owns.
Commonwealth's Robert Ruggio said they initially planned to seek special bonding for the project 18 months ago, but then the credit market bottomed out and "nobody was lending."
Ruggio said he expects these loans to carry a 2.1 percent interest rate and said approval was likely to come in the next 3-4 months.
Councilman George Smiley (D-New Castle) said pursuing the loans was in the best interest of the county.
"This allows [them] to get the infrastructure in place that will allow people to get into those homes their sooner and in turn begin paying taxes to New Castle County earlier," he said.
