Proposals are in the works to add hundreds of residences and a 4-story hotel near the Interstate 71 and U.S. Route 36 interchange, Delaware City Council was told Oct. 25.
Those details were described by Berkshire Township administrator Kevin Vaughn before council approved an ordinance to enact provisions of a second joint economic-development district with Berkshire as an emergency measure, meaning it takes effect immediately.
The first city-Berkshire JEDD was approved in 2017 and covers land including the Tanger Outlets, also near the 71-36 intersection, city records show.
Provisions of that agreement – called JEDD 1 by the city – allow the city’s 1.85% income tax to be collected there. Council’s ordinance will allow the income tax to also be collected in JEDD 2.
In the mid-1990s, Vaughn said, the state legislature allowed townships to partner with an incorporated municipality to use its income tax, “so we can connect that shared income tax with businesses and employees of those businesses … in the defined district, as well as the district’s net profits.”
Otherwise, he said, townships don’t have authority to levy an income tax.
City Manager Tom Homan said a portion of the income tax collected in JEDD 1 is used to administer the tax collection, and a larger portion is taken by the city to be applied to needed improvements to the Route 36 corridor, which enters the city’s east side. The same would apply with JEDD 2, he said.
City finance director Justin Nahvi said part of that money would be used to retire debt on the city’s plans to widen “The Point” intersection – a portion of Route 36 in the city where East William Street ends – to four lanes.
City officials earlier said that ambitious project would take 18 to 24 months to complete, with a tentative start date of 2023.
In addition to The Point, “there’ll be no shortage of other projects along that corridor that we can direct these revenues toward,” Homan said.
Vaughn told council the state’s provisions allow a JEDD as long as the district is a mixed-use development, which is the case with both JEDD 1 and JEDD 2.
He showed council a map depicting the JEDD 2 area, on the north side of U.S. 36, across the highway from JEDD 1.
The township has approved two projects for JEDD 2, he said – 100 single-family homes on the property’s southeast corner, which would be rented instead of sold, and a 296-unit, 3-story multifamily project.
An application for a 4-story hotel also is in the works, and a recreational-vehicle dealership has been proposed, Vaughn said.
The income tax, he said, also would be paid by workers doing construction in JEDD 2.
“There’s a lot of opportunity here. … We really thank you for your partnership,” Vaughn told council.
Homan said the city receives 40% of the JEDD 1 tax and would receive 20% of the JEDD 2 tax, excluding the 4% taken for administrative costs.
Nahvi estimated the city has collected roughly $1.1 million from the JEDD 1 income tax since 2017.