CHAPTER 19. The Downtown Development Districts Act

Subchapter I. Establishment, Amendment, and Termination of Districts

Healthy and vibrant downtowns are critical components of Delaware’s economic well-being and quality of life. The purpose of this chapter is to leverage the resources of state government in a limited number of designated areas in Delaware’s cities, towns, and unincorporated areas in a multifaceted effort to:

(1) Spur private capital investment in commercial business districts and surrounding neighborhoods;

(2) Stimulate job growth and improve the commercial vitality of such districts and neighborhoods;

(3) Help build a stable community of long-term residents in such districts and neighborhoods by improving housing opportunities for persons of all incomes and backgrounds; increasing homeownership rates; building a diverse array of successful businesses; and reducing the number of vacant houses; and

(4) Help strengthen neighborhoods, while harnessing the attraction that vibrant downtowns hold for talented young people, innovative small businesses, and residents from all walks of life.

79 Del. Laws, c. 240, § 1.;

As used in this chapter:

(1) “Committee” means the Cabinet Committee on State Planning Issues established pursuant to § 9101 of Title 29.

(2) “District plan” means the strategic plan or other detailed description of the overall strategy for the development of a proposed district submitted by the municipality or unincorporated area as part of its application for district designation.

(3) “Downtown” means that portion of a city, town, or unincorporated area that traditionally comprises its downtown or central business district, as determined by such city, town, or unincorporated area in accordance with guidelines promulgated by the Office.

(4) “Downtown Development District” or “district” means an area within a municipality or unincorporated area designated as a Downtown Development District in accordance with the provisions of this chapter.

(5) “DSHA” means the Delaware State Housing Authority.

(6) “Municipality” means any incorporated town or city of this State.

(7) “Office” means the Office of State Planning Coordination.

(8) “Unincorporated area” means an area of the State having a concentration of population that is not a municipality and that is eligible to apply for and receive district designation in accordance with rules promulgated by the Office.

79 Del. Laws, c. 240, § 1.;

(a) At the request of the Governor, the Office shall solicit applications from municipalities and unincorporated areas to have an area designated as a Downtown Development District. Such application shall include a description of the area to be included; the need for district incentives; the district plan; local incentives offered; and such other information as may be required by the Office.

(b) The Office of State Planning Coordination shall administer the application process and establish criteria to determine what areas qualify as Downtown Development Districts. The Office is authorized to take such actions as may be necessary or convenient to fulfill its responsibilities hereunder, including but not limited to promulgating rules and regulations relating to the establishment, amendment, and termination of districts and providing assistance to municipalities and unincorporated areas in connection with the application process.

(c) The criteria for designating areas as Downtown Development Districts shall include:

(1) The need and impact of such a designation for such area, including but not limited to income, unemployment rate, homeownership rate, and prevalence of vacant or abandoned housing units in such municipality or unincorporated area. Need and impact factors shall account for at least 50 percent of the consideration given to applications for district designation;

(2) The quality of the municipality’s or unincorporated area’s district plan;

(3) The quality of the local incentives offered; and

(4) Such other criteria as may be determined by the Office.

79 Del. Laws, c. 240, § 1.;

(a) Applications for district designation shall be evaluated by the Cabinet Committee on State Planning Issues, which shall recommend to the Governor those applications with the greatest potential for accomplishing the purposes of this chapter.

(b) Upon receipt from the Committee of any recommended application, the Governor may:

(1) Designate immediately the recommended area as a district;

(2) Designate the recommended area as a district effective 1 year from the date of such determination by the Governor; or

(3) Deny such application.

(c) The initial round of applications shall result in the immediate designation of at least 1 but no more than 3 districts.

79 Del. Laws, c. 240, § 1.;

(a) No more than 15 districts shall be designated at any 1 time. Designation of the first 3 districts shall include 1 district in each county.

(b) Districts shall be designated for an initial 10-year period. Upon recommendation of the Committee, the Governor may renew districts for up to 2 5-year renewal periods. Recommendations for renewals shall be based on the performance of district responsibilities by the municipality (or county in the case of an unincorporated area); the continued need for such a district; and its effectiveness in creating capital investment, increasing population, creating jobs, improving housing stock, providing enhanced retail and entertainment opportunities, and otherwise improving the quality of life within such district.

(c) Any municipality (or county in the case of an unincorporated area) having a district within its borders shall be responsible for providing the local incentives specified in its application, providing timely submission of reports and evaluations as required by rule or regulation, implementing an active local development district program within the context of overall economic and community development efforts, and fulfilling such other responsibilities as may be required by law, rule, or regulation in connection with such district.

(d) Each district shall be required to submit regular reports and information to the Office as may be necessary to evaluate such district’s effectiveness and compliance with this section.

79 Del. Laws, c. 240, § 1.;

(a) Any municipality or unincorporated area submitting an application for district designation shall propose local incentives that address local economic and community conditions, and that will help achieve the purposes set forth in § 1901 of this title. Such local incentives may include but are not limited to a reduction in fees or taxes. In addition, the application may also contain proposals for regulatory flexibility, which may include but are not limited to permit process reforms, special zoning districts, or exemptions from local ordinances.

(b) All incentives proposed in the application shall be binding upon the municipality (or county in the case of an unincorporated area) upon designation of the district. The extent and duration of such incentives shall be consistent with the requirements of the Delaware Constitution and the United States Constitution.

(c) A municipality or county may establish eligibility criteria for local incentives that differ from the criteria required to qualify for the incentives provided in this chapter.

79 Del. Laws, c. 240, § 1.;

A municipality or county may apply to the Office to amend the boundaries of the district or to amend 1 or more district incentives, provided that any revised incentive proposed by the municipality or county shall be equal or superior to the incentive for which the amendment is sought. All proposed amendments are subject to approval by the Committee.

79 Del. Laws, c. 240, § 1.;

(a) If a municipality (or a county in the case of an unincorporated area) fails to fulfill its obligations pursuant to § 1905 of this title or as otherwise set forth in this chapter, then the Office may recommend to the Committee that the district be placed under formal review or that its district designation be terminated.

(b) Except in instances where a city, town, or municipality fails to provide local incentives in accordance with § 1906 of this title hereunder, the Office may not recommend:

(1) Placing any district under formal review for at least 2 years following the initial designation of such district; and

(2) Terminating the designation of any district for at least 1 year following the placement of the district on formal review by the Committee.

(c) In no event shall the Office recommend formal review or termination of any district without providing sufficient notice and opportunity to be heard to such district.

(d) The Committee may approve any recommendation by the Office to place a district under formal review or to terminate a district’s designation upon the affirmative vote of 3/5 of the members of the Committee.

(e) The Office may promulgate regulations to authorize the continuation of previously authorized district incentives for a reasonable period following termination of the district; provided, however, that no new incentives shall be authorized for any entity after the date of termination.

79 Del. Laws, c. 240, § 1.;