ARTICLE II. - COMMERCIAL, FINANCIAL SERVICE AND INDUSTRIAL DEVELOPMENT

The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Bonds means bonds, notes or other obligations issued by the city pursuant to this article.

Commercial project means a project which will accomplish one or more of the public purposes specified in this article and includes, without limitation, a project to be used for wholesale, retail and other mercantile activities, office buildings, hotels or motels, shopping centers, department stores, service facilities and stores which provide retail services to the public and health care facilities, medical care facilities, nursing homes or life care facilities, restaurants, parking facilities, convention, auditorium or trade show facilities, recreational and tourism facilities, any facility owned or operated by an exempt person, and includes, without limitation, condominium units to be used for one or more of the foregoing purposes and the separate financing of machinery and equipment.

Costs means the costs chargeable to a project in accordance with generally accepted accounting principles and include without limitation, the cost of acquisition, construction, reconstruction, repair, alteration, improvement and extension of any building, structure, facility or other improvement; the cost of machinery and equipment; the cost of acquisition, construction, reconstruction, repair, alteration, improvement and extension of pollution control devices, equipment or facilities; the cost of lands, rights-in-lands, easements, privileges, agreements, franchises, utility extensions, disposal facilities, access roads and site development necessary or useful and convenient for any project or in connection therewith; financing costs, including but not limited to discount on bonds, costs of issuance of bonds, engineering and inspection costs, trustee or fiscal agents, fees, cost of financial, legal, professional and other estimates and advice and the reimbursement of such costs to any person; organization, administrative, insurance, operating and other expenses of the city or department or any person prior to and during any acquisition or construction; and all such other expenses as may be necessary or incidental to the financing, acquisition, construction or completion of any project or part thereof, including but not limited to capitalized interest and such provisions for reserves for payment of principal of or interest on bonds during or after such financing, acquisition or construction as the department may determine to be appropriate.

Credit rating agency means an entity operating as an agency, such as Standard and Poor's Corporation, or Moody's Investors Services, Inc., or other such credit rating agency, which rates the credit-worthiness of financing issues, such as municipal bonds, as investments by persons or entities who or which purchase such issues to achieve investment objectives.

Department means the office of economic development of the city or if such office has not been duly organized pursuant to ordinance of council, the executive director of the enterprise community or other member of the mayor's staff, designated by the mayor to serve in an economic development capacity, and designated by the mayor to act as the department.

Exempt person means a governmental unit (or instrumentality thereof), or an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

Financial project means a project in which bond proceeds are used to purchase, acquire or fund receivables, leases, notes, bonds or other financial instruments originating within or without the city, if the program servicing the financial instruments is conducted within the city.

Industrial project means a project which will accomplish one or more of the public purposes specified in this article, and includes, without limitation, a project to be used for manufacturing, research and development, warehousing, distribution, industrial parks and other industrial activities and also includes the separate financing of machinery and equipment.

Interjurisdiction special obligation bond issue means an issue to finance a project, which may be in whole or in part outside of the jurisdiction of the city, but which does promote industry or commerce, or provide employment opportunities within the city.

Nonspeculative issue means a special obligation bond issue, which is rated by Standard and Poor's Corporation, or Moody's Investors Services, Inc., as having a credit rating, respectively, of at least BBB, or Baa, or such equivalent rating by any other credit rating agency.

Pollution control project means any device, equipment, improvement, structure or facility or any land and any building, structure, facility or other improvement thereon, or any combination thereof, whether or not in existence or under construction, or additions thereto or upgrading thereof, and all real and personal property deemed necessary thereto, having to do with, or the end purpose of which is, the control, abatement or prevention of land, water, air or general environmental pollution in or adjacent to the city, whether by solids, liquids, gases, particulates, radiation, heat, noise or otherwise, including, but not limited to, any air pollution control facility, noise abatement facility, water management facility, waste water collection system, waste water treatment works, sewage treatment system, or solid waste disposal or resource recovery facility or site.

Project means any one or more of the following:

(1)

The acquisition, construction, reconstruction, repair, alteration, improvement and extension of, in whole or in part, any building, structure or other facility, whether or not in existence or under construction.

(2)

The purchase and installation of equipment and machinery.

(3)

The improvement of real estate and the extension or provision of utilities, access roads and other appurtenant facilities.

(4)

Loans made from the proceeds of bonds to finance any of the foregoing.

(5)

The purchase or acquisition of receivables, leases, notes, bonds or other financial instruments.

(6)

A pooled financing program such as a loans to lender program, letter of credit program, FSLIC/FDIC insured certificate of deposit program or other similar financing program to provide a source of funds for any one or more of subsections (1) through (5), above.

Project ordinance means an ordinance supplemental hereto enacted pursuant to this article by the city council authorizing the issuance of a bond or series of bonds.

Revenues means receipts, fees, rentals or other payments to be received on account of leases, mortgages, conditional sale, sales, surety or guaranty agreements; payments and any other income derived from the lease, sale or other disposition of a project; moneys in any reserve, insurance or other funds or accounts, and income from the investment thereof, established in connection with the issuance of bonds for a project or projects; and fees, charges or other moneys to be received by the city in respect to projects and contracts with persons.

(Code 1968, § 51-24; Ord. No. 96-086(sub 1), § 1, 2-6-97; Ord. No. 03-020(sub 1), § 1, 6-5-03)

Cross reference— Definitions and rules of construction generally, § 1-2.

Sec. 8-38. - Legislative findings and policy.

(a)

It is hereby determined and declared as a matter of legislative finding that:

(1)

Economic insecurity due to unemployment is a serious menace to health, safety, morals and general welfare of the people of the city, and a high level of unemployment and lack of business opportunity are undesirable and should be corrected.

(2)

The attainment of a minimum level of unemployment and a maximum level of business opportunity or the elimination or prevention of blight in the city can best be accomplished by the promotion, attraction, stimulation, rehabilitation and revitalization of industrial, commercial and other facilities in the city.

(3)

The present and prospective health, safety, morals and general welfare of the people of the city require as a public purpose the promotion and development of new, expanded and rehabilitated industrial, commercial and other facilities in the city.

(4)

It is necessary to provide additional means of financing the promotion and development of new, expanded and rehabilitated industrial, commercial and other enterprises, including the financing of machinery, equipment and pollution control facilities.

(5)

Many existing industrial, commercial and other enterprises in the city could become more competitive and could expand more rapidly, if such additional means of financing were available.

(6)

Additional industrial, commercial and other enterprises could be attracted to the city, if such additional means of financing were available to acquire, construct, sell, lease, rehabilitate, expand and equip facilities for such enterprises.

(7)

By reason of the unavailability of private credit sources redevelopment areas in the city have remained unimproved and the residents of certain areas of the city and in particular minority groups are denied the benefits of a balance of employment, cultural and business opportunities.

(8)

There is need to encourage the development of the city as a banking and financial service center by expanding the types of projects and activities for which the city will provide financing assistance, thereby enhancing the inducements for banks and financial service enterprises to locate, remain and expand in the city which, in time, will result in increased employment opportunities and commercial transactions in the state.

(b)

Therefore, it is hereby declared to be the policy of the city to promote the health, safety, morals, employment, business opportunity and general welfare of the people of the city by providing for the issuance of revenue obligations to finance the acquisition, construction, reconstruction, sale or lease of industrial, commercial and other facilities for the public purposes of alleviating unemployment, maintaining employment, eliminating and preventing blight, redeveloping areas of the city, eliminating or reducing air and water pollution or creating and developing business opportunities. Such purposes are hereby declared to be public purposes for which revenue bonds and other obligations of the city may be issued.

(Code 1968, § 51-22)

Sec. 8-39. - Statutory authorization.

This article is enacted pursuant to the provisions of the constitution of the state under 22 Del. C. ch. 8 (§ 801 et seq.) as effectuated by vote of the electors in the adoption of the home rule charter of the city.

(Code 1968, § 51-23)

Sec. 8-40. - Authority to issue bonds; purpose.

The city may issue bonds pursuant to this article for the purpose of providing funds for one or more of the following purposes:

(1)

To pay all or any part of the cost of a commercial project, financial project, industrial project or pollution control project;

(2)

To make loans to finance all or any part of the cost of a commercial project, financial project, industrial project or pollution control project;

(3)

To pay all or any part of the costs or to make loans to finance all or any part of the costs of a combined project which in part consists of a commercial, industrial or pollution control project and in part consists of a multifamily rental project pursuant to article VI of this chapter; and

(4)

For the purpose of funding or refunding any bonds issued under this article.

(5)

For the purpose of funding or refunding a pooled financing program such as a loans to lender program, FSLIC/FDIC insured certificate of deposit program or other similar financing program approved hereunder.

(Code 1968, § 51-28; Ord. No. 96-086(sub 1), § 2, 2-6-97)

Sec. 8-41. - Obligation of bonds.

(a)

Bonds issued under this article shall not constitute an indebtedness or charge against the general credit or taxing powers of the city within the meaning of any constitutional provision, statutory limitation or provision of the city charter and shall never constitute or give rise to any pecuniary liability of the city other than from the revenues specifically pledged to pay the bonds. The bonds and the interest thereon shall be special obligations of the city payable solely and exclusively:

(1)

From the revenues and property financed, in whole or in part, with the proceeds of the bonds;

(2)

From the revenues of certain designated projects whether or not financed, in whole or in part, with the proceeds of such bonds; or

(3)

From amounts payable pursuant to loan agreements, guarantees or other agreements to make payment given in connection with the financing of a project.

(b)

Bonds issued pursuant to this article shall not be in any way a debt or liability of the state or of any other political subdivision thereof and shall not create or constitute any indebtedness or obligation of the state or of any other political subdivision, either legal, moral or otherwise; and nothing in this article shall be construed to authorize the incurrence of any indebtedness on behalf of or in any way to obligate the state or any other political subdivision.

(c)

All bonds shall contain on the face thereof a statement that neither the credit nor taxing power of the city nor of the state or any other political subdivision thereof is pledged to pay the principal of or interest on the bonds.

(Code 1968, § 51-29)

Sec. 8-42. - Application to department.

(a)

Prior to the issuance of any bonds under this article, there shall be submitted to the department an application for assistance in such form as the department shall prescribe containing information and documents sufficient for the department to find and determine that:

(1)

The bonds are to be issued for a project which will:

Tend to maintain or provide gainful employment opportunities within and for the people of the city;

Aid, assist and encourage the economic development or redevelopment of the city;

Maintain, diversify or expand employment promoting enterprises within the city; or

Purchase or acquire receivables, leases, notes, bonds or other financial instruments.

(2)

The bonds are to be payable solely from revenues as specified in section 8-41

(3)

The revenues from which the bonds will be payable will be sufficient for such purpose;

(4)

The issuance of the bonds will accomplish the public purposes contemplated by this article; and

(5)

The amount to be financed does not exceed the estimated cost of the project.

(b)

The department may require the submission of additional information in order that it may make such other findings and determinations as it shall deem pertinent to its evaluation of the application.

(c)

Any project which is seeking a loan pursuant to a pooled financing program shall submit an application to the department at any time prior or subsequent to the issuance of bonds issued for such program in the manner set forth in subsections (a) and (b) of this section. Such application shall not be subject to further review and approval as specified in section 8-44

(Code 1968, § 51-30; Ord. No. 96-068(sub 1), § 3, 2-6-97)

Sec. 8-43. - Reserved.

Editor's note—

Ord. No. 03-020(sub 1), § 2, adopted June 5, 2003, repealed section 8-43 in its entirety. Former section 8-43 pertained to neighborhood impact disclosure and derived from the Code of 1968, § 51-30.1.

Sec. 8-44. - Approval of application.

(a)

Approval of application. If the department shall make the findings required by section 8-42, the department shall approve the application and shall transmit evidence of its approval to the mayor. If the mayor shall concur in the department's approval of the application, the mayor shall notify the department in writing of such occurrence and shall transmit such application and other documents, together with any additional recommendations, to council so that a project ordinance may be introduced.

(b)

Interjurisdiction special obligation bond. An interjurisdiction special obligation bond issue shall have obtained, prior to its issuance, by one or more credit-rating agencies, a credit rating qualifying it as a nonspeculative issue.

(Code 1968, § 51-31; Ord. No. 03-020(sub 1), § 3, 6-5-03)

Sec. 8-45. - Conditions precedent to issuance of bonds.

(a)

Prior to the issuance of any bonds under this section, the council shall adopt a project ordinance approving the project and approving or modifying the findings previously transmitted pursuant to section 8-44, authorizing the issuance of the bonds, stating the aggregate principal amount thereof and stating that the bonds are special obligations of the city and do not pledge the credit or taxing power thereof, but are payable solely from the revenues specified in section 8-41. Such project ordinance or, if council shall deem it appropriate, a subsequent resolution or resolutions of the city's bond committee, shall also specify the form, terms and provisions of the bonds to be issued, and the manner of sale, which may be public or private, and the terms upon which or the prices for which the bonds are to be sold or exchanged. In addition, prior to the issuance of any bonds under this article, any and all fees proposed to be earned by the city shall be identified and designated to a special fund in the office of economic development. Any and all allocations from the fund shall be approved by resolution of council. Any fees that are proposed to be earned from housing bonds shall be specifically designated to the department of licenses and inspections and shall be used for vacant properties. No fees that may be earned by the issuance of the bond shall be waived without approval of council by resolution.

(b)

In connection with any project to be financed by bonds, the council may, after approval of the department, with the recommendation of the mayor and prior to the adoption of the project ordinance required by this section, adopt a resolution indicating the city's intent to issue bonds under this article, which resolution shall act as the inducement resolution required for the purposes of section 103 of the Internal Revenue Code.

(Code 1968, § 51-32; Ord. No. 03-020(sub 1), § 4, 6-5-03)

Sec. 8-46. - Powers of department.

To effectuate the public purposes of this article, the department shall have the following powers:

(1)

To adopt, amend and repeal rules and regulations and to carry out the provisions of this article;

(2)

In connection with any application for assistance under this article or commitments therefor, to require and collect such fees and charges as the department shall determine to be reasonable; and

(3)

To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this article or in a project ordinance as required by section 8-45

(Code 1968, § 51-33)

Sec. 8-47. - Issuance of bonds.

The city shall have the power to borrow money and issue bonds for the purposes stated in section 8-40. Every issue of bonds shall be special revenue obligations of the city payable solely and exclusively from any revenues or property pledged for such payment as provided in section 8-40. Such bonds shall be authorized by a project ordinance and may be issued in one or more series and shall bear such date or dates, mature at such time or times not exceeding 40 years from the date thereof, bear interest at a rate or rates, be in such denomination, be in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable from such sources, in such medium and at such place or places within or without the state, and be subject to such terms of redemption, with or without premium, as such project ordinance or a subsequent resolution may provide.

(Code 1968, § 51-34)

State law reference— Notice to state prior to issuance of certain bonds, 29 Del. C. § 8317.

Sec. 8-48. - Security for bonds.

(a)

After adoption of a project ordinance and consistent therewith, the department shall have power to covenant and agree with the several holders of such bonds, as to:

(1)

The custody, security, use, expenditure or application of the proceeds of the bonds;

(2)

The use, regulation, operation, maintenance, insurance or disposition of all or any part of any project or projects;

(3)

Payment of the principal of or interest on the bonds, and the sources and methods thereof, the rank or priority of any such bonds as to any lien or security, or the acceleration of the maturity of any such bonds;

(4)

The use and disposition of all revenues or other monies derived or to be derived from any project or projects;

(5)

Pledging, setting aside, depositing or trusteeing all or any part of the revenues or other monies of a project or projects to secure the payment of the principal of or interest on bonds and the powers and duties of any trustee with regard thereto;

(6)

The setting aside out of the revenues or other monies of reserves and sinking funds, and the source, custody, security, regulation, application and disposition thereof;

(7)

The rents, fees or other charges for the use of any project or projects, including any parts thereof theretofore constructed or acquired and any parts, replacements or improvements thereof thereafter constructed or acquired, and the fixing, establishment, collection and enforcement of the same;

(8)

Limitation on the issuance of additional bonds secured by the same revenues;

(9)

Vesting in a trustee or trustees, fiscal or escrow agent or agents, within or without the state, such property, rights, powers and duties in trust as the department may determine and limiting the rights, duties and powers of such trustee;

(10)

Payment of costs or expenses incident to the enforcement of the bonds or of the provisions of this article or of any covenant or contract with the holders of the bonds;

(11)

The procedure, if any, by which the terms of any covenant or contract with, or duty to, the holders of bonds may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given or evidenced; and

(12)

Any other matter or course of conduct which is declared to further secure the payment of the principal of or interest on the bonds.

(b)

All such provisions and all such covenants and agreements shall constitute valid and legally binding contracts between the city and the several holders of the bonds, regardless of the time of issuance of such bonds, and shall be enforceable by any such holder or holders by appropriate action, suit or proceeding in any court of competent jurisdiction.

(Code 1968, § 51-35)

Sec. 8-49. - No liability of officers.

Neither the members of council, employees of the department nor other representatives of the city shall be liable personally on the bonds by reason of the issuance thereof or their execution thereof.

(Code 1968, § 51-36)

Sec. 8-50. - Enterprise community compliance committee.

(a)

The enterprise community compliance committee (compliance committee) shall have nine members and shall be composed of the following members:

Director of economic development;

Director of finance;

Director of personnel;

Director of planning;

Two members of city council who represent two of city council districts 3 through 6 and who shall be chosen by the president of city council; and

Chairs of city council finance committee, community and economic development committee and judiciary committee.

The chair of the compliance committee shall be the chair of the council's finance committee.

(b)

The enterprise community compliance committee shall have the authority and be responsible for (1) review and approval of any application submitted for a project (other than the initial application and authorization for a pooled financing program) which is located within the federally designated enterprise community and is a part of a pooled financing program; (2) monitoring program compliance for all projects described in this section (b)(1), as may be more specifically set forth in the project ordinance, including but not limited to compliance with the federal program employment requirement that 35 percent of jobs of the enterprise shall be filled by residents of the enterprise community, as the same may be amended from time to time; and (3) provide compliance and status reports to city council quarterly and at such other times as may be requested by city council by resolution.

(Ord. No. 96-086(sub 1), § 4, 2-6-97; Ord. No. 97-088(sub 1), § 1, 11-20-97; Ord. No. 97-090, § 1, 11-20-97)

Secs. 8-51—8-75. - Reserved.