New Castle County Executive Paul Clark wants to use revenues from the county’s real estate transfer tax to fund an economic development program, but he’s not sure what incentives the program should include.
County Council President Tom Kovach has some ideas on what incentives belong in an economic development program, but he doesn’t think it should be funded through the real estate transfer tax.
Clark says he won’t announce his plan until county budget issues are resolved, so there’s a chance of a meeting of the minds before then.
Clark, a Democrat, said he favors using transfer tax revenues for economic development because “if we had a designated fund, it would be easier to budget and do things with it.” Right now, he said, any economic development initiatives would have to come out of the county’s general fund, and that would mean taking money away from an item that is already budgeted.
The county executive says he figures that the transfer tax, which brought in as much as $40 million a year before the real estate bubble burst, can be counted on to generate at least $15 million a year. His idea would be to dedicate a portion of revenues over $15 million for economic development.
Kovach, a Republican, fears that Clark’s calculations of transfer tax revenues may be overly optimistic, and that could leave an economic development fund short of cash. His suggestion: make it a new line item in the county’s general fund.
As for what incentives the county could offer businesses through an economic development fund, Clark isn’t sure yet. Two possibilities, he said, are abatements of property or real estate transfer taxes and waivers or reductions of building permits or other fees. The examples Clark gave wouldn’t require a cash outlay by the county, but they would deprive the county of money it might otherwise receive from a business that chooses to relocate here.
To Kovach, “economic development isn’t just a battle of the check.” Rather than lure corporations through incentives that have a cash value, he’d prefer to see the county use funds to market itself — showing prospects why the county is a good place to do business. He’d like to see greater investments in partnerships with private organizations (the New Castle County Chamber of Commerce, for example) or public agencies (the Delaware Economic Development Office or the City of Wilmington) to strengthen business recruiting efforts.
The two leaders expressed similar views on the types of economic development they seek to stimulate.
Clark would like to offer incentives to upgrade aging properties. He mentioned the current sites of the BJ’s Wholesale Club near Elsmere and the Wal-Mart near Prices Corner as examples of recent improvements. Likewise, Kovach, a lawyer who specializes in environmental issues, mentioned rehabilitating aging or contaminated industrial sites, particularly along Governor Printz Boulevard and Philadelphia Pike north of Wilmington and in the Route 13/Route 40 corridor from New Castle to Bear.
Both also said they’d like to do more to assist businesses already in the county that would like to expand. Clark would like to help small businesses get through the county land use process more efficiently. “I don’t want to weaken the code, just make it smoother, and move quicker,” he said.
“We’ve got to do way with the mentality that we’re going to put roadblocks in the way,” Kovach said. The county “should help you over the hurdles,” making it possible for small businesses to get through permitting processes without hiring an architect and an attorney.
While Kovach expressed reluctance to use the county’s checkbook to provide business incentives, he did suggest offering “tax credits to landlords who rent to small businesses and start-ups at below market rates.” The concept, he said, would benefit both landlords and businesses while providing jobs for construction workers needed to fit out the buildings to meet the companies’ specifications.
