By Glenn Rolfe

GEORGETOWN — A development group is seeking a conditional use approval for a commercial/residential project at the former cold-storage property known as the “icehouse.”

The mayor and Town Council are expected to act on the request in early April. It was submitted by DE OZ Property Management’s Daniel Bond during a public hearing Monday.

The developers hope to be approved for a mixed-use building at 107 Depot St., with a commercial tenant using the basement and first floor, and 25 apartments on the upper floors.

The effort garnered support from the town’s Planning Commission on Jan. 17.

Mr. Bond said the project would target workforce housing needs. Proposed rents are $1,400 for one bedroom, $1,600 for two bedrooms and $1,800-$2,000 for a three-bedroom residence.

“In Delaware today, I am sure you know, you build an apartment, and you will get tenants. No doubt about it. There is a severe shortage of affordable housing in Delaware,” he added. “So, you build apartments that are reasonably priced, which we can do with all of these subsidies, and you’ll have tenants. That provides a good steady income.”

The group behind the proposal, comprised of investors from Delaware, purchased the property and is focused on building projects in Milford and Georgetown that are in Opportunity Zones. Such areas are defined by the state as economically distressed communities that can be revitalized by providing tax benefits.

DE OZ Property Management is seeking Downtown Development District reimbursement and state and federal historic and renewable energy tax credits. With plans for solar and geothermal, there could also be energy efficiency subsidies, Mr. Bond said.

The 47,000-square-foot, multistory brick structure would include a commercial component on the lower floor and in the basement, plus as many as 25 apartments upstairs. Most would be two- and three-bedroom.

This conditional use is being sought because town code limits just three apartments over commercial spaces.

Mr. Bond went on to note that, with “low income” being considered below 80% of the average median income, this project would supply “workforce housing,” which is 80% to 120% of an area’s AMI.

“There is little support for that housing at present,” he said, adding that the group can’t get subsidies for housing, but it can secure assistance via historic tax credits and for building in a Downtown Development District and an Opportunity Zone.

“And, because we are going to be using an energy-efficient design, probably solar and geothermal, we can get tax credits,” he said. “So, basically, this project, with the icehouse, we’ll get about half of our money back … from subsides. You have to choose the right building and the right location to do that.”

Besides town approval, remaining challenges include securing ample parking, as well as permission from various town and state entities on final site plans.

For the commercial piece, the investment group is working with La Plaza Delaware, a nonprofit that assists businesses.

If approved, the project likely wouldn’t get under way until sometime in 2025. “We have a lot of work to do to arrange the financing, complete the plans,” said Mr. Bond. In addition, the developers are working on an application to get the former icehouse property — last owned by Isaacs & Sons many years ago — recognized by the National Park Service as a federal historic building, opening the door for the U.S. tax credits.

On Monday, Councilwoman Angela Townsend applauded the initiative, as did Georgetown residents Jon Peterson and Sunny Gyani.

“Thank you for risk taking. I’ve looked over the documentation. You’ve certainly done your homework,” said Mr. Peterson, adding that this property “will be transformational.”

Mr. Gyani said, “I own property next to it. I think it is about time that you work on it and do something with it. If we miss this opportunity, I don’t think there will ever be this kind of opportunity, where somebody is willing to put $8 million to $10 million in Georgetown.” He added that he is working with the investors on the parking hurdle.

Mayor Bill West agreed with Mr. Gyani.

“I think it’s a great opportunity,” he said. “The icehouse has been sitting there for years with nobody doing anything to it. I appreciate the effort … and trying to move this town forward.”

The proposal has also drawn letters of support from the Sussex Economic Development Action Committee, Sussex County’s Community Development and Historical Preservation divisions, the Greater Georgetown Chamber of Commerce, Sussex County Habitat for Humanity, La Esperanza, Southern Delaware Tourism and several others.