Council Approves Tax Abatement, Comcast Agreement

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Screen Shot 2015-04-18 at 12.05.42 PMBy terry Rogers

On Monday, April 13, Milford City Council voted five to two to approve a tax abatement for the Cascades Apartments, a moderate income apartment complex on Airport Road. The request from the development was for a five-year tax abatement on increased property taxes to assist with their application with the Delaware State Housing Authority funding request for Phase 2 of their building projects.

“The residents of these apartments have discounted rents based on income,” said Hans Medlarz, City Manager. “Phase I is a successful project, the tenants work and I have checked with Lieutenant Huey of the Milford Police Department regarding problems in the area. He reports that there were none. This will be slightly smaller than Phase I with only 66 units. They are requesting a tax abatement for five years with taxes resuming in the fifth year.” Mr. Medlarz explained that the vacant lot where the units will be built is only bringing in tax revenue of about $1,000. After year six, he said that the property would generate more than $25,000 in tax revenue if council approved the request.

Councilman Dirk Gleysteen mentioned that the housing complex had a waiting list of six months to two years, questioning whether the new phase would be built whether they got a tax deduction or not. David Holden, Development Principal for the project, said that without DHSA funding, the apartments would be priced with rents too high for the income levels they were designed to serve.

“This is a competitive grant process,” Mr. Holden said. “One of the criteria is support from the city and without this tax abatement, we would not meet that criteria which could put our grant in jeopardy.” Councilwoman Katrina Wilson said that council had, in the past, supported housing developments asking for partnership with DHSA. She said she saw this as a “win-win” situation where the city would help the developer with a tax abatement in order to provide additional housing for low income families.

Mr. Medlarz explained that part of the project would include adding sidewalks that would connect to the industrial park. He said this would be a cost savings to the city as well and recommended that council approve the request.

“Are we being fair offering a tax deduction for this?” asked Councilman Gleysteen. “Earlier this evening we denied a request from Pop Warner to lower their electric rates since it would set a precedent for every non-profit agency to ask for such a reduction. How is this different from that request?” Councilman Wilson said that they should not compare Pop Warner with providing housing for low income families.

City Solicitor, David Rutt, explained that there are significant benefits to getting on board with federal housing funding at the present time. He explained that the expense of a tax abatement would be far less expensive than the city trying to apply for federal funding as there is a significant amount of paperwork involved. Mr. Holden explained that without the tax abatement, his company would not be able to build the second phase of the project. The developer is purchasing the land in a foreclosure sale and it has been vacant for quite some time.

“Mr. Morrow is not here tonight, but he is always asking how we can raise realty transfer tax,” said Mr. Medlarz. “This is how. We provide a tax abatement for five years and begin charging taxes again in the sixth year. The developer would still need to pay the $1,000 per year but would not pay for taxes on the improvements on the property until year six.”

Councilman Skip Pikus voted against the plan, stating that he felt the developer should be able to get conventional funding since the first phase of the project had been such as success. Councilman Gleysteen also voted no while Councilman James Starling, Councilman Owen Brooks, Councilman Garrett Grier, Councilman Christopher Mergner and Councilwoman Wilson voted to approve the request.

In other council news, City Council voted unanimously to approve the contract with Comcast. The contract is for ten years, less than the 15 years previously requested by Comcast. The contract does not prevent other companies, such as Verizon or Google, from offering services in the town. Chris Komer of Comcast told council that the company was working on improving service in the city and that the City Manager had information on how to reach him directly if any problems surfaced.

There was also discussion about placing an ATM in the City of Milford Customer Service office on S Walnut Street since there will be no ATM in downtown Milford once the M&T Bank is sold. The bank has agreed to leave the ATM in place until they have a buyer, but will remove it upon the sale of the property. Mr. Rutt explained that PNC Bank had first refusal for installing an ATM back in the building and Mr. Medlarz said that he would reach out to them to learn what the process would be.

“There are alarm system issues right now, so we cannot offer it as a 24-hour ATM at the present time,” Mr. Medlarz explained. “Once we talk to the bank and determine if we will go with PNC or another bank, we will discuss the possibility of rewiring the alarm system so the ATM is available outside of billing office hours.”