Financing plan approved for Claymont redevelopment/Councilman Weiner votes to support economic redevelopment plan
Financing plan approved for Claymont redevelopment
By Jesse Chadderdon
Sep 18, 2008 @ 12:18 PM
The developers of the former Brookview site in Claymont – the largest redevelopment project in unincorporated New Castle County history – secured a special financing arrangement with the County on Tuesday.
The County Council voted 11-2 to approve a sale of up to $20 million in bonds for the developer, the proceeds of which the developer will use to finance many of the up-front costs associated with the Renaissance Village project – demolition, asbestos removal, road construction and sewer rehabilitation.
It is the first time New Castle County has used the new tool, called tax incremental financing (TIF) since it was authorized by the state earlier this year. Two projects in Sussex County are also being financed through TIF.
Under TIF, the bonds will be paid off by a special property tax assessed only to those who purchase homes in 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 from the Brookview Town Homes, which have since been demolished there. With the proposed homes ranging from $200,000 to $350,000, the new tax base will be exponentially higher.
Tim Fry, the county’s bond counsel, allayed the fears of some that the county could be on the hook for the money if the project failed. Instead, he said if the Commonwealth-Setting Group that is developing the site goes bankrupt, a lien would be placed against the property it owns.
"This applies a stimulus, avoids liability for the County and helps us stabilize the Claymont Community and increase our fiscal situation with regards to this site," said Councilman John Cartier (D-Penny Hill), who sponsored the ordinance.
Voting against the proposal were Councilmen Jea Street (D-Wilmington South) and William Tansey (R-Greenville).
Also approved by Council were two federal pass-through grants totalling $250,000 that will go towards acquisition and engineering for the potential construction of affordable homes in Knollwood.
As part of its agreement with the County to build Renaissance Village, Commonwealth-Setting has promised to construct a minimum of 120 affordable housing units in the Claymont area. Last year, Commonwealth purchased a nine-acre parcel of land in Knollwood through sheriff's sale that is being considered for 20-25 of those homes.
The grants, awarded to the New Knollwood Civic Association and Habitat for Humanity, will allow for some early engineering studies and for the acquisition of some vacant homes that could also be rebuilt.
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