A new program that offers tax incentives for Downtown apartment and hotel projects won unanimous approval from the Salisbury City Council on Monday.
Horizon – or a Hotel Or Residential Incentive Zone -- can stimulate new development by offering city property tax abatements that lower the amount of taxes owed for a specified period of time. City officials hope it will help spur development in the city’s core.
Developers of several downtown projects, including Nick Simpson, who is building the multi-story The Ross on East Main Street, have expressed their support for the tax incentives. Simpson also made a pitch to the Wicomico County Council to consider adding a Horizon program for an abatement on county property taxes.
In addition to Simpson, Bradley Gillis, who is developing a mixed-use project on a former city-owned parking lot near the Wicomico Public Library, and Bret Davis who is planning to build apartments and a beer garden along the Wicomico River on East Market Street, have also supported the new program.
At a recent council work session, Deputy City Administrator Andy Kitzrow said the creation of a special tax district would benefit other projects, including 500 Riverside Drive and Marina Landing.
The total assessed value of the five projects is more than $70 million.
The residential projects planned for the downtown area are expected to bring in 750 new residents.
Seven large scale projects are in the development pipeline. Of these, several have been delayed, collapsed, or continue to struggle to secure complete financing because of the Covid-19 pandemic, Kitzrow has said.
The proposed Horizon project zone would include the Downtown area and extend west to the Salisbury Marina and along the North Prong of the Wicomico River, known on the city’s zoning map as the Central Business District and the Riverfront Redevelopment District.
During the first five years, developers would get a 100 percent city property tax credit. In years six through 10, the credit would be 80 percent. After that it would gradually be reduced to 40 percent in year 20.
City officials expect the new program will attract private capital investments into the Central Business District and Riverfront Redevelopment Districts by funding large scale development projects that increase the assessed value of real property in Downtown by millions of dollars.
Upon completion, the program is expected to increase the assessed value of the real property base value by at least $10 million, according to city officials.
City officials have said another goal of the program also is to add new jobs to the Downtown workforce by providing spaces, culture and an environment that will be attractive to new companies and promote local growth.