What is a Downtown Development District?
On June 5, 2014, the Delaware General Assembly enacted Senate Bill 191 that authorized the establishment of Downtown Development Districts (DDDs). The Act is designed to promote healthy and vibrant downtowns as critical components of Delaware’s economic well-being and quality of life. The purpose is to leverage resources of the state government in a limited number of Delaware’s cities, towns, and unincorporated areas in order to:
- Spur private capital investment in commercial business districts and surrounding neighborhoods;
- Stimulate job growth and improve the commercial vitality of such districts and neighborhoods;
- Help build a stable community of long-term residents by improving housing opportunities and building a diverse array of successful businesses; and
- Assist municipalities in strengthening neighborhoods while harnessing the attraction that vibrant downtowns hold for talented people, innovative small businesses, and residents from all walks of life.
Selection as a DDD will entitle private construction projects within the identified District to receive grants to offset up to 20% of their capital construction costs. Investors who make qualified improvements to residential, commercial, or industrial properties in designated districts may also qualify for additional state and local development incentives. Grant funds to investors are administered by the Delaware State Housing Authority (DSHA).
How can a Delaware local government apply to become a DDD?
The Governor will announce the opening of each application cycle for the DDD Program. Applications will only be accepted during an open application cycle. Local governments that wish to take advantage of this program must identify a downtown district in their community and apply for designation. To apply, a local government must review the current DDD guidelines booklet, complete an application form, attach supporting materials, and submit the entire packet to the Delaware Office of State Planning Coordination (OSPC). Applications for designation as a District are evaluated based on:
- The need for and impact of the proposed DDD designation - 50%
- A summary of their district plan - 30%
- A package of local incentives - 20%
The Governor has the discretion to designate new DDDs and makes decisions based on recommendations by the Cabinet Committee for State Planning Issues. Districts are designated for a ten-year period and may be renewed for up to two five-year renewal periods, based on the performance of each District and upon recommendation by the Committee.
What Delaware communities have been designated as DDDs?
In January 2015, then-Governor Jack Markell announced the designations in downtown areas of Wilmington, Dover, and Seaford as Delaware’s first three DDDs. In August 2016, five new DDDs were designated in Smyrna, Harrington, Milford, Georgetown, and Laurel. On August 19, 2019, Governor John Carney announced four new DDDs in Clayton, Delaware City, Middletown, and New Castle. Each DDD provides local incentives that address local economic and community conditions and achieve the purpose set forth in the Act. In addition to the incentives offered by each jurisdiction, there are also incentives offered by state agencies, Kent County, and Sussex County that are listed on the OSPC website.
An interactive map on FirstMap shows the boundaries of each Downtown Development District in Delaware.
A synopsis of locally provided incentives for each DDD and website links are provided below.
City of Wilmington
Wilmington’s Downtown Development District was designated in January 2015.
Wilmington incentives for growth
Expedited permitting
- Permit applications in DDD are walked through multi-department approval process to ensure shortest possible review time.
Architectural and Engineering (A&E) Feasibility Assistance
- A 50% match (up to $20,000) for architectural and engineering feasibility work for for-profit small business developers to explore capital investments in DDD. (Total development cost capped at $1 million, program allocation of $100,00 approval-based citywide.
Grow Wilmington Fund
- SBA 7(a) loan that offers 3.75% rate for qualified borrowers making investments in downtown that result in new jobs or capital improvements citywide.
Creative District Mixed-Use Overlay Zone
- Special DDD-specific zoning overlay to facilitate mixed-use development.
City of Dover
Dover’s Downtown Development District was designated in January 2015.
Dover Incentives
Fee Waivers
- Waiver of city impact fees, building permit fees, and new business license fees for three years.
Tax Abatement, Rebate, and Credit
- Abatement of property taxes on the value of improvements, rebate of buyer’s City Transfer Tax when Certificate of Occupancy is issued within five years of property transfer, Transfer Tax waiver for owner-occupied homes for first-time buyers, abatement of property taxes for owner-occupied homes, and Historic Property Tax Credits for exterior.
Downtown Dover Partnership Incentives
- The Downtown Dover Partnership will reimburse architectural expenses up to $5,000 for new or expanded businesses. It also administers a façade grant program to help business owners improve their storefronts.
City of Seaford
Seaford’s Downtown Development District was designated in January 2015.
Seaford Incentives
Seaford Reinvestment Incentive Ordinance
- This Ordinance creates an opportunity whereby property owners that wish to reinvest in the City of Seaford may apply for and, if qualified, be granted a sum of money to offer assistance for the start up costs associated with a new business.
Sidewalk Loan
- A property owner who has received an estimate for sidewalk and/or curbing installation may apply for a 0% interest loan from the City, through the sidewalk loan program. The property owner’s sidewalk and/or curbing installation must be in accordance with the City’s established specifications.
Town of Georgetown
Georgetown’s Downtown Development District was designated in August 2016.
Georgetown Incentives
Fee Waivers and Reductions
- Includes a business license fee waiver, building permit fee reduction from 15 to 75 percent; Emergency Services and Georgetown Recreation, Education and Arts Trust Fund fee reduction of 50 percent; and impact fee (water and sewer) reduction.
Property Tax Increase Phase-In
- All projects will be afforded a phase-in for the incremental increase in the Georgetown property tax as a result of the improvement. The tax will be 10 percent of the current property tax and will increase 10 percent each year until year 10.
Accelerated Development Review Process
Projects confirmed by the Town Manager and Town Engineer to be within the Georgetown Codes will be administratively approved.
Sign, Façade, and Awning Grant
All projects are eligible to participate in the grant program.
Town of Harrington
Harrington’s Downtown Development District was designated in August 2016.
Harrington Incentives
Fee Waivers and Reductions
- Business license fee waiver for new businesses, category A or B plan review fee reduction, sewer impact fee reduction, permit and other fee reduction based on direct job creation for Harrington residents, single family home impact fee waiver, and sewer impact fee step increase schedule.
Tax Waivers, Abatement, and Reductions
- First-time home buyer tax abatement, downtown revitalization property tax reduction program, transfer tax waiver for first-time home buyers.
Priority Review Status
- Category A or B priority review status for new projects.
Town of Laurel
Laurel’s Downtown Development District was designated in August 2016.
Laurel Incentives
Tax Abatement and Fee Waivers
- A five-year abatement of town property taxes on any improvements made within the Downtown Development District, a waiver of sewer and water impact fees, totaling $7,000 per equivalent dwelling unit, priority access to the state Historic Tax Credit.
Property Price Discounts
- A discount of at least 25 percent off the market value of land owned by the Laurel Redevelopment Corporation.
Access to Local Resources
- Access to community lending resources, planned amenities, such as a nature-based playground and walking trails, along the Broad Creek waterfront, access to home rehabilitation and home ownership resources, regardless of income.
City of Milford
Milford’s Downtown Development District was designated in August 2016.
Milford Incentives
Fee and Tax Waivers
- Full waiver of sewer, water and electric impact fees, waiver of building permit fee and other associated city fees, and realty transfer tax waiver for first-time home-buyers.
Tax Abatement
- Rehabilitation projects that increase the assessed value by more than 50% receive a full abatement of city taxes for 10 years, rehabilitation projects that increase the assessed value by less than 50% receive a partial abatement of city taxes for 10 years, new residential or commercial construction will receive a full tax abatement for 5 years, and properties converted from rental units to owner occupied housing will receive a full tax abatement for 10 years.
This video showcases a success story of Milford’s Downtown Development District.
Town of Smyrna
Smyrna’s Downtown Development District was designated in August 2016.
Smyrna Incentives
Fee Waivers and Caps
- Town Council may waive, in whole or part, any tax, charge, fee, or obligation to the town. This may cover property taxes, impact fees, building permits, and/or electric utility charges. In addition, a building permit fees cap exists for qualifying projects in commercially-zoned or historic areas shall have a cap of $1,000 on all building permits.
Electric Utility Discount
- A 50% discount on monthly metered electric utility for six months.
Revolving Loan Fund
- Access to capital through a revolving loan fund, funded by the USDA RDLEG program, to assist commercial and residential development, renewal, improvement of businesses and creation of jobs, administered by the Smyrna Redevelopment Authority.
Façade Improvement Grants
- Up to $1,000 grant for business/property owners who address storefront conditions, administered by the Smyrna Redevelopment Authority.
Vacancy Incentive
- A financial incentive for property and business owners to mitigate the negative impact of vacancy, administered by the Smyrna Redevelopment Authority.
Town of Clayton
Clayton was designated a Downtown Development District in August 2019.
Clayton Incentives
Fee Waivers & Reductions
- Business license fee waived for the first 3 years.
- Electric/water/sewer utility deposit waived for existing structures.
- Reduction in electric/water/sewer monthly fees for first 6 months depending on number of full time employees.
Business Revitalization Property Tax Program
All improvements to the exterior only of existing commercial structures that are facing the street shall be eligible to apply for a partial reduction from the Town of Clayton property taxes based on specified criteria that can be found on the Town of Clayton’s DDD webpage.
City of Delaware City
Delaware City’s Downtown Development District was designated in August 2019.
Delaware City Incentives
Fee Waivers & Reductions
- Transfer Tax Waiver: The City will waive the local property transfer tax for existing owner-occupied homes or rentals that convert to owner occupied homes for verified first time home buyers.
- Permit Fee Reduction: Properties within the DDD District will be eligible for a reduction on the building permit and variance review fees.
Tax Abatements
- Property Tax Abatement on Rehabilitation Projects: Any residential rehabilitation projects that increase the assessed value of the property by more than 50% will receive 50% abatement of City Taxes for 5 years.
- Property Tax Abatement for Renter to Owner-Occupied Units: Existing properties converted from rental units to owner occupied housing may receive a tax abatement for 5 years as long as the property remains owner occupied for this same term.
Façade Improvement Revolving Loan Program
The City will reactivate its Facade Revolving Loan Program.
Town of New Castle
New Castle’s Downtown Development District was designated in August 2019.
New Castle Incentives
Tax and Fee Waivers
- First-Time Home-Buyer City Realty Transfer Tax Waiver: The City will waive the City Realty Transfer Tax for first time home-buyers where the owner/buyer will reside in the dwelling.
- Business License Fee Waiver: The City will waive the Business License Fee for a one-year period for new businesses.
- Building Permit Fee Waiver: The City will waive building permit fees and the Historic Area Commission Review Fee for specified improvements.
City Property Tax Abatement
The increase in City property taxes resulting from an increase in assessed value due to improvements to a property will be abated for a 5-year period.
Additionally, the City has streamlined their review process for development in the DDD and has added a new Downtown Gateway (DG) District to allow for a range of uses including multi-family development, non-residential development and mixed uses.
Town of Middletown
Middletown’s Downtown Development District was designated in August 2019.
Middletown Incentives
Business License Fee Waiver
- The annual Town of Middletown business license fee will be waived for the first two years in operation for new businesses.
Accelerated Development Review Process
- Projects confirmed to be in compliance with town codes will be considered under the minor development plan review process.
Water, Sewer, and Electric Impact Fee Reductions
- Commercial and mixed-use projects will receive a 75 percent reduction in impact fees at the time of building permit issuance.
The Town of Middletown may provide additional tax breaks and other fee reductions on a case-by-case basis. The Town will consider additional DDD incentives during the annual budget review process.