Special tax district sought for big-ticket developments

Developers who are in the process of constructing what will be Salisbury’s tallest building known as The Ross.

Salisbury officials are eyeing tax incentives for properties in the Downtown area to help spur development of apartment and hotel projects in the city’s core.

Known as HORIZON – or a Hotel Or Residential Incentive Zone – it can stimulate new development by offering property tax abatements that lower the amount of taxes owed for a specified period of time, Deputy City Administrator Andy Kitzrow told City Council members at an Oct. 19 work session.

Several residential projects are planned for the downtown area and are expected to bring in 750 new residents.

“That is change – that is significant impact,” Kitzrow said.

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, he said.

The city already has a designated Enterprise Zone in roughly the same area, but it is only for businesses that create jobs and make investments made in the zone.

Developers of several Downtown projects who attended the meeting asked council members to support the tax incentives.

All of them are investing large amounts of money to get their projects off the ground, and a break in property taxes “will make the numbers work,” said Brad Gillis, who is developing a mixed-use project on a former city-owned parking lot near the Wicomico Public Library.

Nick Simpson, owner of the multi-story The Ross, and Bret Davis who is planning to build apartments and a beer garden along the Wicomico River on East Market Street, echoed Gillis’ support.

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 proposed zone would include the Downtown area and extend west to the Salisbury Marina and along the North Prong of the Wicomico River.

City Councilwoman April Jackson expressed concern that new development at the marina could result in gentrification of the surrounding minority neighborhood, ultimately driving out the mostly low-income residents along Fitzwater Street.

Two other council members, Angela Blake and Michele Gregory, said they would like to see similar tax credits for single-family homes in the city, particularly those offered by Habitat for Humanity and Salisbury Neighborhood Housing.

“I think that has to be a separate discussion,” said Council President Jack Heath, who agreed to put the issue on an upcoming agenda.

The Marina Landing project, which was approved by the City Council a few years ago, is the only property included in the proposed tax incentive zone in that neighborhood, and will likely have little impact on the Fitzwater Street houses, he said.

Council members agreed to move forward with the HORIZON plan at a future meeting.

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