SALISBURY – A proposed tax abatement program could benefit certain developers looking to build in downtown Salisbury.
In a work session last week, Salisbury’s Acting Mayor Julia Glanz and Deputy City Administrator Andy Kitzrow came before the Wicomico County Council seeking support for a new residential tax credit program to incentivize large-scale hotel or multi-family residential development in the downtown area.
“This is a signature program targeting very lucrative projects, $10 million or larger,” Kitzrow said. “These aren’t small remodels or small fixes … We’re incentivizing the type of development that redefines a city.”
Unlike the city’s existing programs, officials told county leaders the Horizon (Hotel or Residential Incentive Zone) program would focus on residential development. Glanz noted that putting “more heads in beds” could spur revitalization efforts in downtown Salisbury.
“We can sit here all day and wish and hope for these developments to come in,” she said. “They may come in, they may not. We don’t think they will at the pace we’d like them to right now.”
Kitzrow said the goal of the program is to incentivize developers to bring their residential projects to downtown Salisbury, which in turn would increase the tax base.
“What we do know is other than the River Place (Condominiums) on Riverside, we’ve not seen any large-scale development in this area in over 20 years,” he said.
The 20-year incentive program, officials noted, would reduce real property taxes on improved lots. The program would also be reevaluated in three years if it met certain benchmarks.
“I would point out that in discussions we have had with the city, it is understood that the tax incentive proposed would be on the improved property value,” said Acting County Executive John Psota. “Therefore, the current assessed value prior to any redevelopment would continue to be taxed. As a result, the county would not be foregoing any current property tax.”
Kitzrow told county leaders last week the city had passed a resolution in November supporting the Horizon program. With a similar resolution from the county council, he said, the city could then seek state legislation to establish the program.
“Once approved, it’s codified through an ordinance and we can start accepting applications to reach our development goals,” he said.
Councilman John Cannon said he supported the tax incentive program.
“We talk about it all the time, the fact that we don’t want to raise taxes but we want to increase the tax base,” he said. “Well this does increase the tax base. It’s actually one of the first tangible products that have come before the county where we can participate in helping to create that growth.”
Councilman Joe Holloway, however, argued the program was not fair to existing downtown property owners, who would continue to pay more taxes as property values increased.
“So we’re going to give tax breaks to the people building the new buildings,” he said. “And the people that own the buildings that have been there and have been paying taxes all these years are going to have to pay more taxes.”
Councilman Ernie Davis added he was hesitant to lend his support to a resolution without first seeing a draft. But Councilman Bill McCain disagreed.
“At this time all that’s being asked of us is a letter of support,” he said. “It does not obligate us to anything at this point.”
After further discussion, the council agreed to discuss the proposed resolution and details pertaining to the Horizon program at a future work session.