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In The News

Documents show settlement is near for plan to finally reassess Delaware properties after decades

From Delaware Online

Officials from Delaware’s three counties are negotiating a lawsuit settlement that would see a multiyear process for reassessing the values used to tax individual properties up and down the state – a process that is likely to render widespread changes to residents’ and businesses’ tax bills in coming years.

Attorneys have told a judge they are working to settle, by the end of the year, a lawsuit that found the property valuations currently used by Delaware’s three counties to calculate tax bills to be unconstitutional, according to recent court transcripts and correspondence.

Newly revealed court documents shed light on the time frame and goals being contemplated by county leaders and the education activists who sued them over the local tax systems.

Each county has submitted reassessment planning proposals that outline a four-year process beginning in January for reassessing properties, according to court documents.

“Our goal is to have this done and have the reassessment baked into the bills by 2024,” New Castle County attorney Nicholas Brannick told a Chancery Court judge in a recent hearing.

Under each of the counties’ planning proposals – which are not final and subject to change – new tax bills would not be mailed before 2024. Residents, however, would be notified of new property values in 2023 and be allowed to appeal.

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University of Delaware confirms 122 employee workforce reduction

From Delaware Business Now

The University of Delaware has laid off 122 employees as it deals with a potential quarter of a billion-dollar shortfall.

University spokesperson Andrea Boyle Tippett confirmed that the university went through a reduction in force this week.

Tippett said job reductions were concentrated in areas“where operations have slowed because of the pandemic, including facilities maintenance, construction project management, and conference services.”

Tippett noted that President Dennis Assanis had announced that the reductions would be coming along with small salary cuts for top administrators and other actions aimed at dealing with the shortfall.

UD also tapped into its estimated $1.5 billion endowment to deal with the budget gap.

The layoffs are believed to have come from the ranks of nonunion employees.

Negotiations are underway with professors and others with union representation regarding early retirements and other options.

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New Castle County reportedly makes high bid for Sheraton South hotel property

From Delaware Business Now

New Castle County was the reported high bidder in an auction for the Sheraton South hotel in the New Castle area.

WDEL and sources within the real estate industry reported the county’s bid was $19.5 million. Bidding had started at $5 million but rose rapidly in the final hours of the online auction.

A New Castle County spokesman did not immediately respond to a request for comment.

The bid will still have to go through an escrow process and perhaps other due diligence.

County Executive Matt Meyer had earlier confirmed that the governmental unit would make a bid for the property for use as a center for the homeless.

The conversion has earned scattered criticism, due to the relative isolation of the property, which sits in a marshy area off Interstate 95.

Meyer told WDEL the center would provide access to services for what is expected to be a growing homeless population as the Covid-19 continues to hammer the economy.

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Sussex County to build $11.4 million emergency operations center

From Delaware Online

Sussex County officials announced earlier this month plans to build a 20,000 square-foot public safety building that will house the county’s emergency operations center, EMS/paramedics and a 911 center.

Construction for the new facility, estimated to cost nearly $11.4 million, is slated to begin July 2021 and is an expansion of the county’s current Emergency Operations Center in the Delaware Coastal Business Park just off Airport Road in Georgetown.

The new public safety building will “produce significant efficiencies” by combining the 911 call center and paramedics department under one roof, county administrator Todd Lawson said during an Oct. 6 council meeting.

The facility includes a new commercial kitchen, renovated lobby, a training center that can accommodate 50 people, simulation rooms, an EMS warehouse for supply storage and bunk rooms for long-term emergencies.

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New Castle County wants to buy Sheraton hotel, convert it to emergency homeless shelter

From Delaware Online

The New Castle County Council plans to discuss and vote on a plan to purchase the Sheraton hotel on Airport Road and convert it into an emergency homeless shelter.

The Sheraton Wilmington South, located just off Exit 5A on I-95, is up for auction beginning Monday, according to a web listing. Bidding starts at $5.5 million. The auction ends Wednesday.

The county wants to use funding from the more than $190 million it has in “reserve allocation” from the more than $322 million it received from the CARES Act during the coronavirus pandemic.

The county, according to an agenda posted for an upcoming meeting Tuesday night, plans to purchase the hotel and operate it as “emergency shelter and temporary housing for our most vulnerable residents, and others as deemed necessary by the Department of Community Services, during and in response to the COVID-19 pandemic.”

The hotel, which just underwent a $6.4 million renovation, has 192 rooms and the property is more than 6 acres. It has a long history in Delaware despite being in operation for less than 10 years. The hotel was originally built for $25 million by principle developer Joseph L. Capano Sr. as a Radisson Hotel in 2000, but it sat empty for years after it was found to have been built, in a floodplain, one-third larger than specified in its permits.

A court battle ensued, and the owners filed for bankruptcy in 2001.

Pennsylvania-based Hersha Hospitality Management purchased the building for $15 million and converted it to a Sheraton. It opened in 2011.

It was announced in September that the hotel was going to auction.

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Bayhealth proposes $19 million project that would add beds at Sussex Campus

From Delaware Business Now

Bayhealth, the state’s second-largest hospital system, recently presented a Certificate of Public Review to the Delaware Health Resources Board requesting approval to add additional inpatient beds, as well as a C-section suite at Bayhealth Hospital, Sussex Campus.

The estimate for the expansion is $19 million. The Sussex Campus had a price tag estimated at between $275 million to $300 million.

“After our move to the Sussex Campus in early 2019, we saw significant growth in admissions, observation cases, and the number of babies born,” said Bayhealth CEO Terry Murphy. “Sussex County is undergoing significant population growth, which we anticipate will further increase the need for services and we want to be prepared to meet that need.”

The proposal calls for additional medical/surgical beds to be located in 17,300 square feet of available space on the fifth floor of the building. Existing space will be converted into 24 acuity adaptable private patient beds. Acuity adaptable refers to the patient being able to stay in the unit between admission and discharge, an approach that can save money and improve care.

Five women’s services beds will be added to the third floor, which will require renovating existing administrative office space into private patient rooms. The C-section suite will be constructed nearby in 1,500 square feet of shelled space.

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2021 State Business Tax Climate Index

From the Tax Foundation

Delaware’s overall rank in the 2021 State Business Tax Climate Index was 13th nationally, but 50th for corporate taxes and 42nd for individual taxes.

The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.

Read the report

Decade-old land deal prompts political backlash, legal fight

From Delaware Online

In late 2008, with the real estate market in free fall, a land-hungry Delaware Department of Transportation purchased two parcels of rural flatland next to Route 1 south of Dover for nearly $2.8 million.

Ten years later, it sold the parcels for $270,000 to influential lawyer and developer John Paradee. It was a price the state says reflected a DelDOT decree that the land would never gain a direct commercial turn-on or turnoff from the adjacent highway – Delaware’s primary north-south artery.

Today, those deals and their multimillion-dollar price discrepancies are attracting controversy, manifested as political assaults on Delaware’s Democratic Party establishment just weeks before the November election.

The land sale also sits at the center of an ongoing lawsuit in Delaware’s business court over DelDOT’s potential granting of accesses from Route 1 to new commercial real estate projects in the Milford-to-Frederica corridor.

The suit is among the latest jockeying between developers seeking to win a race to riches in an area planned as the state’s next exurban hotbed, one whose growth may hinge on the success of the nearby taxpayer-subsidized youth sports complex, DE Turf.

At the center of it all is Paradee, who proclaims to be “widely recognized for his ability to secure approval for difficult or controversial projects.” In December 2018, he purchased the roughly 11 acres of DelDOT land with a team of investors. At 44%, Paradee’s stake is the largest in the partnership.

Combined with adjacent parcels, the land was intended to form the platform on which to build Asbury Square, a hotel, restaurant and retail development. It is one of three ambitiously proposed projects designed to capitalize on government’s push to encourage development in the corridor.

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True Access awarded $657,000 to launch Hispanic business loan program

From Delaware Business Now

True Access Capital, Wilmington (formerly First State Community Loan Fund) will expand its lending to minority-owned businesses, with an emphasis on Hispanic-owned businesses, with the help of a $657,000 award from the Community Development Financial Institution (CDFI) Fund.

The fund is a program of the U.S. Department of the Treasury intended to increase lending in low-income and economically distressed communities.

“Delaware’s Hispanic businesses are rapidly growing in number and in size, and this award from the US Treasury’s CDFI program to True Access Capital will help fuel the continued growth of Hispanic entrepreneurs in Delaware,” U.S. Sen. Chris Coons said of the award. “Where some lenders saw risk, CDFI programs show us there is still ‘Blue Ocean’ in communities that are mistakenly overlooked.”

The CDFI grant will expand True Access Capital’s reach to minority-owned businesses, for whom credit access is a significant hurdle.

“We know our way around this unlevel playing field, and we’ve long helped minority business owners navigate it,” said Vandell Hampton, Jr., True Access Capital CEO. “The demand for business financing and development for Hispanic businesses has exploded in recent years, and we know that Hispanic business owners face the same challenges in accessing capital that African American entrepreneurs face, so this expansion of reach is a natural direction for us.”

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Up to $136 million will support statewide programs addressing COVID-19 impacts

From Delaware State News

NEW CASTLE  – Up to $136 million from the New Castle County’s federal CARES Act allocation will support six state-wide programs targeting unemployment insurance, childcare, coronavirus testing and more, New Castle County Executive Matt Meyer announced this week.

This funding will supplement the $927 million of CARES Act funding the state received directly from the federal government.

Mr. Meyer and the state developed a three-step approach for the funding agreement.

They determined the total cost of all six statewide programs, then determined the percentage of the cost of those six statewide programs for the benefit of county residents and businesses, and finally, determined the cost share between the state and New Castle County.

“We always work collaboratively with our federal, state and municipal governments but particularly in times of crisis,” Mr. Meyer said in a prepared statement. “My thanks to County Council, to the Governor’s office and to Delaware’s Office of Management and Budget to reach this agreement to help keep our community healthy and sustain our economy during this crisis.”

Statewide programs that New Castle County CARES Act funding will support the Unemployment Insurance Trust Fund, the essential childcare program, statewide testing, statewide contact tracing, an enhanced rent and utility program and a hospitality emergency loan program.

Based on actual unemployment claims through mid-September and estimates through the rest of the year, the total statewide amount of COVID-19 unemployment claims paid for the forty-two-week period, March 15 to Dec. 30, will be $273 million. Approximately 55% of the statewide claims are from residents in New Castle County. A county contribution up to $67.5 million will be made.

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