Wilmington City Council passes changes, extensions of tax incentives for development
Wilmington City Council passed changes or extensions to three tax abatement programs incentivizing development and renovation in the city Thursday.
The ordinances were scheduled for a vote in April, but Wilmington city officials requested they be held after council members and advocates raised concerns about enforcement and loss of potential city revenue.
But measures to extend one expired Wilmington tax abatement program and modify two others were approved by Council without opposition Thursday.
Councilman Bud Freel sponsored the legislation. He says it retools the tax abatement program addressing commercial, mixed-use and residential real estate to jump start development in different areas of the city.
“What we’ve done is we’ve kind of realigned the target areas,” he said. “We removed the west side of the Riverfront, that’s been pretty much developed, but we now include the east side of the river. And we’ve added like eight neighborhood corridors throughout the whole city.”
A floor amendment passed with this legislation would revoke the city’s tax abatement on a property if the owner were to petition for and be granted a reduced property tax assessment from New Castle County.
“So in essence they [would] get a permanent tax abatement with regard to the lower assessment and we're still handing them an abatement with regard to current year taxes,” said Councilman Ciro Adams. “This kind of precludes any double dipping by the building owner or developer.”
Changes to the incentive program for the rehabilitation of vacant residential properties passed Thursday offer a greater tax abatement over a shorter period of time. The new version offers full abatement of the increase in property taxes caused by improvements to the property over five years, rather than the previous abatement of 85 percent of the tax increase over ten years.
“I think this is good legislation and I think it is an opportunity for us to be able to spur some growth,” said Councilwoman Michelle Harlee Thursday.
Council also voted to extend through the year 2030 the incentive program for construction or renovation within city historic districts or on properties on the National Register of Historic Places, which expired last year.
The properties with tax incentives active through 2019 or into the future had a total of close to $900,000 in property taxes abated last year, according to data provided by the city’s Office of Finance this spring. Together, property tax exemption incentive programs within the city have abated close to $11 million dollars in potential taxes since 2006.
According to the city’s data, two properties have received more than $2 million each in abated taxes over the course of their multi-year incentives. One is Pettinaro’s Christina Crescent building on the Riverfront. The other is a commercial building on Delaware Avenue owned by the Buccini/Pollin Group. Neither property’s incentive is currently active.