The City of Wilmington, through the Mayor’s Office of Economic Development (OED), offers a comprehensive array of services with a personal touch designed to assist businesses considering a move to or expansion within Wilmington. The City also works very closely with the Delaware Economic Development Office (DEDO) to assure that its business clients receive the maximum benefits, the best service and the clearest information that both the City and State have to offer.
To facilitate capital investment within the boundaries of Wilmington, the City offers several tax abatement programs and other kinds of tangible assistance:
Tax Abatement Program:
- A 10-year abatement of City Real Estate Taxes on a citywide basis for commercial new construction, commercial redevelopment, or commercial renovation, regardless of use. The abatement is applied to the incremental increase in the building assessment resulting from the project. During years 1-5, 100% of the incremental assessment is abated. Throughout years 6-10, the incremental assessment value is phased in 20% per year. This is roughly equivalent to a 7.5 year 100% abatement on the difference in the building assessment before and after the project.
- A 20-year abatement of Real Estate Taxes for off-street parking structures.
Head Tax Exemption Program
To incentivize job growth in the City, the City has instituted the Head Tax Exemption Program. The City’s Code calls for every person or business required to obtain a business license to also pay the sum of fifteen dollars ($15.00) per month for every employee in excess of five (5), employed by the licensee carrying out the business of the licensee and located within the City of Wilmington (i.e. the Head Tax). In the case of part-time employees, the employer shall accrue the man hours worked during the month by all part-time employees and divide by one hundred and seventy three (173) to arrive at the number of such employees per month.
The City of Wilmington’s Head Tax Exemption Program is codified in Section 5-102A of the City’s Code. Most recently, this program was authorized to have an effective date of January 1, 2010 and is set to expire on June 30, 2023. As long as eligible applicants are entered into the Head Tax Exemption Program by this date, they will be entitled to the abatement provided by the Program for a period of five (5) years notwithstanding the expiration of the Program.
To be eligible for a Head Tax exemption as provided in the Program, an Employer must be able to show:
(1) That the sum of verifiable new employees per month, whether newly hired, transferred from outside of the City’s limits, or any combination thereof, equals or exceeds an increase of 50 full-time equivalent employees when measured against the full-time equivalent employee complement of the employer deployed to a location situated within the City of Wilmington on the effective date of the Head Tax Exemption Program, which is January 1, 2010. If an employer that had not previously been located within the City of Wilmington on the effective date of the Head Tax Exemption Program then commences operations within the City of Wilmington subsequent to the effective date, then the full-time equivalent complement of the employer shall be deemed to be zero (0) on the effective date of the Head Tax Exemption Program for purposes of calculating the increase of full-time equivalent employees.
(2) The aggregate annual earned income of the verifiable new employees, whether newly hired, transferred from outside of the City’s limits, or any combination thereof, that is subject to taxation under the City of Wilmington earned income tax equals or exceeds Three Million Dollars ($3,000,000.00) in any Head Tax Exemption Program calendar year or a portion thereof.
To apply, an applicant must submit a notarized affidavit and the information contained therein shall be certified as true and correct by an officer, director, partner, or member of the applicant and submitted under penalty of perjury. The affiant must be a person who has knowledge with respect to the information provided in the application and must be authorized by the employer to execute and submit the application. The notarized affidavit must declare:
(1) The aggregate city-wide full-time equivalent employee complement of the employer on the effective date of the Head Tax Exemption Program;
(2) The aggregate number of verifiable new employees hired by, or transferred by the employer from a business location outside the City of Wilmington to a business location inside the City of Wilmington, on or after the effective date of the City of Wilmington Head Tax Exemption Program, and as of the date of the application;
(3) whether the employer reasonably expects to exceed the aggregate earned income threshold of Three Million Dollars ($3,000,000.00) for verifiable new employees deployed in the City of Wilmington in the year that the application is submitted by the employer;
(4) such other information as the City’s Department of Finance may require.
Relocation/Workforce Development Assistance
Through the City’s Strategic Economic Development Fund, tailored financial assistance may also be available for significant economic development projects created within the City. Relocation assistance and/or workforce development grants, advances, or loans are available to businesses that establish operations in the City, incur relocation or workforce training costs in doing so, and are judged to have a significant positive economic development impact. The amount of the relocation and workforce development assistance will vary according to the number of new jobs brought into the City, the average salary of these jobs, and the costs incurred by the business as a result of its relocation to, or in certain circumstances expansion within, the City.
Grow America Fund is a Community Development Financial Institution (CDFI) licensed under the U.S SBA Preferred Lenders Program (PLP). We focus on providing flexible and patient expansion loans to established small businesses, manufacturers and distributors. This program is open to qualified, existing businesses in operation for at least 2 full years with 2 - 500 employees and revenues generally between $500,000 and $20 million (subject to the SBA size standards by industry). Loans typically range from $150,000 to $2,500,000. However, the amount a business and its affiliates can borrow is subject to underwriting guidelines and availability of loan funds. The goal is to work together to bring projects to fruition for small and medium-sized businesses in Wilmington.
A&E Feasibility Assistance
50 percent match (up to $20,000) for architectural and engineering feasibility work for for-profit small business developers to explore capital investments.
Technical assistance for private development provided by the City can reduce the time and cost burden of development for any business that wishes to reside in Wilmington.
The Downtown Development Districts Act was created to leverage state resources in a limited number of designated areas in Delaware’s cities and towns to spur private capital investment in commercial business districts and other neighborhoods; stimulate job growth and improve the commercial vitality of our cities and towns; and help build a stable community of long-term residents in our downtowns and other neighborhoods. The Wilmington DDD is contiguous and represents 221.9 acres of space. The residential neighborhoods of downtown Wilmington that surround the central business district and are part of the Downtown Development District include West Center City, the Creative District (including Quaker Hill), and East Side. These neighborhoods correspond generally to the following census tracts:
- Census tracts 9, 29: East Side
- Census tracts 16, 21: West Center City
- Census tract 28: Creative District
- The Minimum Qualified Investment Threshold (MQIT) for Large Projects is the minimum amount of Qualified Real Property Investments (QRPI) required to be made by an Investor to qualify for a Large Project DDD Grant. The MQIT for Large Projects is treated similar to a deductible and is not eligible for a Grant.
- There is no MQIT (deductible) for Small Projects; however, there is minimum QRPI of $15,000 required to be considered eligible for the program.
- DDD Grants are limited to $1,500,000 per building or facility within a five-consecutive-year period, starting with the year in which a grant is first awarded or reserved. A $1,500,000 Grant requires a QRPI greater than $41,000,000.
- The QRPI must be made within the boundaries of a designated DDD
- The QRPI must be in excess of the required MQIT (deductible) and minimum QRPI for the specific set-aside.
- The Investor must meet site control requirements (e.g. legal title, sales agreement, or owner’s consent).