By Mike Finney

DOVER — Dave Hugg will take any tool he can get to attract more businesses to the city of Dover — particularly one that may strengthen the city’s partnership with Dover Air Force Base.

That’s why Mr. Hugg, director of the city’s Department of Planning and Inspection, was so excited March 9, when members of the Legislative, Finance and Administrative Committee unanimously passed his proposal to expand an abatement of real estate taxes to stimulate economic development in the city.

It is one incentive that could make Dover more attractive to a manufacturer of aircraft components that is reportedly in the early stages of examining a possible move to the city.

The proposed ordinance, which appears to have a lot of momentum, still has to be approved by City Council at a future meeting. Council President William “Bill” Hare and Councilman Gerald Rocha Sr. are co-sponsors of the proposal.

Mr. Hugg said the abatement of city real estate taxes for certain qualifying industries and businesses best promotes the public welfare by providing incentives to expand or locate in Dover, thereby creating employment opportunities for citizens and, ultimately, strengthening the city’s tax base.

It was by happenstance that the city planner recently found a hole in the ordinance, one that prevented businesses from taking advantage of the tax-abatement program in certain areas of Dover.

“I haven’t seen it yet, but we expect to get an application from Delaware Corrugated Products, the box outlet plant, for a 10-year tax-abatement program with their new facility that they’re building over on the POW-MIA Parkway,” Mr. Hugg said. “That’s an IPM (Industrial Park Manufacturing) zone district that falls under these regulations.

“When I was going through the application process with them, it dawned on me that, in 2018, when we adopted the new IPM-3, we were focused more on aviation, aeronautics and those kinds of industries. (However,) we did not amend this tax incentive to make that incentive available in that particular zoning district.”

Aircraft-component manufacturer shows interest

Mr. Hugg and the members of the Legislative, Finance and Administrative Committee appeared to think that bringing an aircraft manufacturer into the city would be a natural fit, with Dover Air Force Base having been a key part of the city since 1941.

“We are entertaining a proposal from a manufacturer of aircraft components,” Mr. Hugg said. “Dover is shortlisted, and they like our location because of the Kent County AeroPark and also the Civil Air Terminal but, more importantly, the access to Dover Air Force Base’s long runways, which will be part of the joint-use agreement (between the state and the U.S. Air Force) when it’s ultimately signed.

“If we are successful in having that industry taking a second look, a much closer look at us, I would like to make sure that we have the opportunity to offer the 10-year economic-development tax abatement to an industry who may locate in the IPM-3 district.”

The Civil Air Terminal, which sits adjacent to Dover AFB, is a joint-use facility owned by the Delaware Department of Transportation and operated by the Delaware River and Bay Authority.

Its biggest assets are access to the base’s two runways, which, at 12,900 and 9,600 feet, are Delaware’s longest, and one of only seven airports in the United States that, in the past, could have potentially served as a landing facility for the space shuttle.

The state-owned CAT, located at the northern edge of Dover AFB, currently provides nonmilitary aircraft access to the air base’s runways and taxiways through an agreement with the Air Force. The CAT is used primarily by civilian, commercial or chartered aircraft, as well as NASCAR-related aircraft.

Once a year, NASCAR events bring around 50 aircraft to the terminal over the course of four days.

An expansion to the CAT has been proposed, which would increase parking capacity for aircraft at the site, reducing time and fuel costs associated with temporarily moving aircraft to other locations for longer-term parking. Close engagement between the base, the state, the city, the nearby community and a potential business enterprise would be required in pursuing future development at the CAT.

DelDOT owns the 20-acre terminal, which is operated by the DRBA. The adjacent Kent County AeroPark covers 13 acres, and all 33 acres are in Dover’s municipal limits.

The current joint-use agreement, signed in 1997, is for 25 years. It limits civil use to 13,500 takeoffs and landings a year and requires flights to give 72-hour notice. The terminal, which sits off Horsepond Road, currently draws only about 200 takeoffs and landings a year, the majority on NASCAR race weekend. It has a 6-acre asphalt parking area that can accommodate up to 60 aircraft.

The new agreement, which is being worked on, would be for 50 years and is proposed to almost double the CAT’s annual limit to 25,000 takeoffs and landings, while eliminating advance notice.

Dover Mayor Robin Christiansen said it would be quite a coup should Dover be able to bring an aircraft industry to the area.

“I believe that we are on the verge of having a number of (business possibilities) after the (new) joint-use agreement with Dover Air Force Base is going to be signed,” Mayor Christiansen said. “We have some major carriers that are going to be looking for additional space for their cargo aircraft, and I think the incentives would lead them to come here, as well as some warehousing that’s going to be needed to handle overnight product, as well as a facility to repair the aircraft that would be coming into the Civil Air Terminal.”

The mayor added that Dover has the ideal population to recruit employees to an aircraft-component manufacturer.

“We have a captive audience that is well-trained into how to load and unload aircraft,” he said. “We also have folks that, rather than see them retire and leave the area with the skills that they’ve learned about how to repair and maintain aircraft, this will keep these folks here.

“Subsequently, for every job that we’ve created through these incentives, as well as other businesses in the community, it certainly enhances our economic picture in Dover and central Delaware.”

Incentives leave Dover poised to ‘take care of business’

While there are numerous standards that businesses must meet to qualify for the tax-abatement program, which is set up to ease city real estate taxes on a 10-year sliding scale, it should serve as a magnet to potential industries.

For instance, in the fiscal year that construction ends, the qualifying business would get a 100% reduction in real estate taxes, followed by a 90% reduction at the end of the first year of operation, 80% at the end of year two and so on.

“This brings in more tax money for us,” City Councilman David Anderson said.“It doesn’t maybe the first year — it brings in the utilities — but after the first year, it brings new money we never had, so it’s a great incentive and doesn’t cost us anything and actually builds our tax base over time.”

Said Councilman Fred Neil, “I believe this is a no-brainer.”

The tax-abatement program is designed to simply make Dover more attractive to businesses that might be interested in establishing themselves in Delaware’s capital city.

“The ordinance originally provided for the tax incentive for qualifying businesses in the IPM, IPM-2 and manufacturing district,” Mr. Hugg said. “I believe it’s been used twice, once out in the Garrison Oak Business Park some years ago, and most recently, a year or so ago, it was used by Advantech, when they built their new facility out there.

“What this ordinance does is allows that activity to occur, and we should get a large manufacturer, who is interested in coming to Dover and otherwise meets the qualifications,” he added. “We really don’t have an attractive set of incentives for business activities that are outside of the downtown and not $3 million or bigger.”