Another view on tax breaks for Downtown Salisbury construction


Since 1970, major construction projects have shaped the city of Salisbury by improving both the local economy and our lifestyle options.

The Route 13 Bypass, the Centre at Salisbury and Shorebirds Stadium are three examples. These projects slowly transformed the city from being a sleepy, Eastern Shore town to a vibrant city, eager to embrace the future.

Today, another ambitious project invites us to consider what the Downtown could become by drawing hundreds of full-time residents into the urban core.

This development project – The Ross – has the makings to be another positive game-changer for the city.

By now, most local residents have heard about The Ross and the plan to build a 12-story residential high-rise on East Main Street. As reported in this publication during February, the project has the support of the city of Salisbury, the Salisbury Area Chamber of Commerce and the Salisbury City Council.

Showing enthusiastic support for the plan, the City Council voted unanimously to approve the “Horizon Program,” which will provide property tax benefits to developers for constructing projects costing more than $10 million.

Meanwhile, in Annapolis, the Maryland House of Delegates voted unanimously to approve the Horizon legislation. The bill now moves from Maryland’s House to the Senate for a vote by the state’s 47 senators.

All of this bipartisan political and civic momentum sounds so positive, so forward-thinking, so obvious.

So what’s the hitch?

Back in Wicomico County, the County Council isn’t “all in” with the Horizon plan.

One council member has characterized the tax incentive package as a “tax scheme” and “unfair” to county residents.

The “tax scheme” label apparently refers to the return-on-investment rate offered by the developer to individuals who invest $50,000 or more toward the construction of The Ross building.

The ROI rates, ranging from 15 percent to 18 percent, certainly seem lucrative but are commonplace in the realty investment industry.

Any construction project that invests millions carries significant development risks for a project’s principals and its investors. Recognizing this, a developer needs to offer mid-teen rates to compensate investors for the level of risk they assume. That’s the reality of the business.

There is no “scheme” about this. We should feel thankful to have local developers who are willing to invest their own money into projects that will uplift the city and surrounding area.

The “unfairness” claim applies to the tax abatements (incentives) offered to a developer under the Horizon Program, but not offered to citizens. The claim is that all county property owners will need to pay more tax because of The Ross project.

The thinking here says that somehow, some way, county property owners will be forced to “make up the difference with their property taxes.”

What difference? The difference between what and what?

When the debate resumes within the County Council, the essence of the matter remains in the question: “Do we want to encourage new investments that will improve the city’s economy and lifestyle options?”

Let’s resist the local tendency to naysay and attack an opportunity that will bring progress. Sometimes it seems like our local elected officials are hellbent on snatching failure from the jaws of success.

The County Council should vote “aye” to progress and approve the Horizons Program tax incentive plan. Opportunity is knocking, and I urge the County Council to open the door.

John Rankin lives in Salisbury and is the owner of the write idea communications. He is also an alternate member of the Wicomico County Charter Review Committee.