Sec. 8-211. - Title.

Article VII, sections 8-211 through 8-225, shall be known as the Wilmington Tax Increment Financing Ordinance.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-212. - Definitions.

In this article, the following terms have the meanings indicated, unless the context clearly indicates another or different meaning or intent.

Act means the Municipal Tax Increment Financing Act, 22 Del. C. ch. 17.

Adjusted assessed value means:

(1)

For real property that qualifies for an agricultural, horticultural or forest use under 9 Del. C., § 8329, the fair market value of the property without regard to its agricultural, horticultural or forest use assessment as of January 1 of that year preceding the effective date of the resolution creating the TIF district under section 8-216 of this article; or

(2)

In the event the city grants an exemption from taxes, the original assessed value less the amount of taxes subject to such exemption.

Assessed value means the total assessed value of all real property in a TIF district subject to taxation as determined by the assessor, with any adjustment pursuant to section 8-212(c) of this article taken into account.

Assessor shall mean the city board of assessment or, for purposes herein, the department of land use for New Castle County.

Bonds or bond means any revenue or general obligation bonds or bond, notes or note, or other similar instruments or instrument issued by any municipality pursuant to and in accordance with this chapter.

Chief executive officer means the mayor.

County or county means New Castle County.

Development includes new development, redevelopment, revitalization and renovation.

TIF district means an area designated by a resolution described in section 8-216(a) of this article.

Issuer or issuer means a municipality that issues bonds.

Municipality or municipality means the City of Wilmington, having a population in excess of 50,000 people.

Original assessed value means the assessed value as of January 1 of that year preceding the effective date of the resolution creating the TIF district under section 8-216 of this article.

Tax increment means for any tax year the amount by which the assessed value as of January 1 preceding that tax year exceeds the original assessed value.

Tax year means the fiscal year for the municipality.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-213. - Bonds to finance development of industrial, commercial or residential area authorized; rules and regulations; findings.

(a)

In addition to whatever other powers it may have, and notwithstanding any limitation of law, the city may borrow money by issuing and selling bonds, at any time and from time to time, for the purpose of financing the development of an industrial, commercial, or residential area.

(b)

Subject to review and approval by the administrative board, the office of economic development ("OED") shall be and is hereby authorized to promulgate such rules, regulations, procedures and forms necessary to implement the provisions of this article, particularly those aspects related to the applicant's form of application, OED application review, and recommendations to the mayor and council. The said OED shall be and is hereby authorized and required to make such findings that it deems appropriate as part of its review of each application.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-214. - Payment of bonds.

Bonds shall be payable from the special fund described in section 8-216(b)(2) of this article, and the governing body of the issuer may also pledge its full faith and credit or establish sinking funds, establish debt service reserve funds, or pledge other assets and revenues towards the payments of the principal, premium, if any, and interest, including special taxes levied and collected pursuant to section 8-216 et seq. of this chapter.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-215. - Application of bond proceeds.

(a)

All proceeds received from any bonds issued and sold pursuant to this article shall be applied solely for:

(1)

The costs of purchasing, leasing, condemning, or otherwise acquiring land or other property, or an interest in them, in the designated TIF district or as necessary for a right-of-way or other easement to or from the TIF district:

(2)

Demolition and site removal;

(3)

Plans, specifications, studies, surveys, forecasts and estimates of costs and revenues;

(4)

Relocation of businesses or residents;

(5)

Installation of utilities, construction of parks and playgrounds, and other necessary improvements, including streets and roads to, from, or within the TIF district, parking, lighting and other facilities;

(6)

Construction or rehabilitation of buildings;

(7)

Reserves or capitalized interest;

(8)

Necessary costs of issuing bonds;

(9)

Permissive costs of issuing and servicing the bonds, which may include up to 0.5 percent of the bond issues or origination costs incurred by the city, and up to 2.0 percent of the bond debt service payments as administrative costs if administered by the city;

(10)

Payment of the principal, premium, if any, and interest on loans, money advanced, or any indebtedness incurred by the city for any of the purposes set out in this section, including the refunding of bonds previously issued under this article; and

(11)

Any costs permitted under section 8-215 of this article, and for any purposes described in this section of this article; provided, however, that the purposes described in this section of this article shall be with reference to the designated TIF district.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-216. - Conditions precedent to issuance of bonds.

(a)

Before issuing any bonds, the city council shall:

(1)

Designate by resolution an area within its jurisdiction as a "TIF district".

(2)

Receive from the appropriate assessor a certification as to the amount of the original assessed value.

(b)

Pledge that until the bonds have been fully paid, or thereafter, the city property taxes on real property within the TIF district shall be divided as follows:

(1)

That portion of the taxes which would be produced by the rate at which taxes levied each year by or for the city upon the original assessed value shall be allocated to and, when collected, paid into the funds of the taxing body in the same manner as taxes by or for the taxing body on all other property are paid.

(2)

That portion of the taxes representing the levy on the tax increment that would normally be paid to the issuer shall be paid into a special fund to be applied in accordance with the provisions of section 8-218 of this article.

(3)

That portion of the taxes representing the levy on the tax increment that would normally be paid to a taxing body other than the issuer shall be allocated to and, when collected, paid into the funds of such taxing body in the same manner as taxes by or for the taxing body on all property are paid, or any other manner that public agencies so determine (school districts, etc.); provided, however, that if such taxing body has agreed pursuant to section 8-219 of this article that such taxes shall be paid into a special fund created in accordance with section 8-217 of this article, then such taxes shall be paid into such special fund.

(c)

Approval of application. If the office of economic development ("OED") shall make the findings required by section 8-213, the OED shall approve the application and shall transmit evidence of its approval to the mayor. If the mayor shall concur in the OED's approval of the application, the mayor shall notify the OED 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.

(d)

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 non-speculative issue.

(e)

Project ordinance. Prior to the issuance of any bonds under this article, the council shall adopt a project ordinance approving the project and approving or modifying the findings previously transmitted pursuant to this article, 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 8-215. 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. Prior to the issuance of bonds, the applicant must provide certification of the proposed assessment to the city director of finance, in a form satisfactory to the department of finance.

(f)

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 purposes of section 103 of the Internal Revenue Code.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-217. - Resolution creating special fund.

The city council may adopt a resolution creating a special fund with respect to a TIF district, even though no bonds authorized by this article have been issued by the city with respect to the TIF district or are then outstanding. The taxes allocated to such special fund by section 8-216(b)(2) or (3) of this article shall thereafter be paid over to such special fund, as long as such resolution remains in effect.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-218. - Uses of special fund; issuance of general obligation bond.

(a)

Uses of special fund when no bonds outstanding. When no bonds authorized by this article are outstanding with respect to a TIF district and the city council so determines, moneys in the special fund for that TIF district created pursuant to section 8-217 of this article may be:

(1)

Used for any of the purposes described in section 8-215 of this article for which bond proceeds could be used;

(2)

Accumulated for payment of debt service on bonds subsequently issued under this article;

(3)

Used to pay or to reimburse the city for debt service which the city is obligated to pay or has paid (whether such obligation is general or limited) on bonds issued by the city, the proceeds of which have been used for any of the purposes specified in section 8-215 of this article; or used to pay or reimburse any developer loan; or

(4)

Paid to the city to provide funds to be used for any legal purpose as may be determined by the city.

(b)

Restrictions on use of special funds. When any bonds authorized by this article are outstanding with respect to a TIF district and the city council so determines, moneys in the special fund for that TIF district created pursuant to section 8-217 of this article may be used as provided in subsection (a) of this section in any fiscal year by the city, but only to the extent that:

(1)

The amount in such special fund exceeds the unpaid debt service payable on such bonds in such fiscal year and is not restricted so as to prohibit the use of such moneys;

(2)

Such use is not prohibited by the ordinance authorizing the issuance of such bonds; and

(3)

To the extent not prohibited by bond or loan covenants.

(c)

Compliance with Charter requirements. The issuance of general obligation bonds pursuant to this section shall comply with applicable City Charter requirements.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-219. - Agreements to pay revenue from taxes on tax increment into special fund.

The county, which is not the issuing body, may pledge, by written agreement, that some or all of its property taxes levied on the tax increment shall also be paid into a special fund created pursuant to section 8-217 of this article. Such agreements shall be between the city and the county. They shall run to the benefit of and be enforceable on behalf of any bondholder.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-220. - Ordinance authorizing bonds.

(a)

Required; mandatory provisions. In order to implement the authority conferred upon the city by the provisions of 22 Del. C. ch. 17 to issue bonds, the city council shall adopt an ordinance which:

(1)

Specifies and describes the proposed undertaking and states that it has complied with section 8-216 of this article and 22 Del. C. ch. 17.

(2)

Specifies the maximum rate or rates of interest the bonds are to bear.

(b)

Additional provisions; authorization. The resolution described in section 8-217 of this article (i) may itself specify and prescribe, or (ii) may authorize the bond committee, by resolution, or (iii) may authorize the mayor, by executive order, to specify and prescribe any of the following as deemed appropriate to effect the financing of the proposed undertaking:

(1)

The actual principal amount of the bonds to be issued;

(2)

The actual rate or rates of interest the bonds are to bear;

(3)

The manner in which and the terms upon which the bonds are to be sold;

(4)

The manner in which and the times and places that the interest on the bonds is to be paid;

(5)

The time or times that the bonds may be executed, issued and delivered;

(6)

The form and tenor of the bonds and the denominations in which the bonds may be issued;

(7)

The manner in which and the times and places that the principal of the bonds is to be paid, within the limitations set forth in this chapter;

(8)

Provisions pursuant to which any and all of the bonds may be called for redemption prior to their stated maturity dates;

(9)

Such other provisions not inconsistent with this article as shall be determined by city council to be necessary or desirable to effect the financing of the proposed undertaking; and

(10)

The hiring of such professionals as may be deemed necessary to assist with the city's review of any and all aspects of the TIF financing.

(c)

Referendum. Neither the ordinance authorizing the bonds referred to herein, nor any ordinance, resolution or executive order passed or adopted in furtherance thereof, nor the bonds themselves, shall be subject to any referendum by reason of any other state or local law, except that an ordinance authorizing the pledge of the full faith and credit of the city to the payment of principal and interest on bonds issued pursuant to this article shall be subject to any applicable provisions for referendum.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-221. - Exemption of bonds from taxation.

The principal amount of the bonds, the interest payable thereon, their transfer, and any income derived therefrom, including any profit made in the same or transfer thereof, shall be exempt from taxation by the state, by the county and by the city.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-222. - Nature and incidents of bonds.

(a)

Form of bond; deemed "securities". All bonds shall be in fully registered form. Each of the bonds shall be deemed to be a "security" within the meaning of 6 Del. C. § 8-102, whether or not it is either one or a class or series or by its terms is divisible into a class or series of instruments.

(b)

Signing and sealing. All bonds shall be signed manually or in facsimile by the chief executive officer, and the seal of the issuer shall be affixed thereto and attested by the clerk or other similar administrative officer of the issuer. If any officer whose signature or countersignature appears on the bonds ceases to be such officer before delivery of the bonds, his or her signature or countersignature shall nevertheless be valid and sufficient for all purposes the same as if he or she had remained in office until delivery.

(c)

Maturity. All bonds shall mature not later than 30 years from their date of issuance.

(d)

Sale. All bonds shall be sold in such manner, either at public or private sale and upon such terms as the governing body of the issuer deems best. Any contract for the acquisition of property may provide that payment shall be made in bonds.

(e)

Bonds issued are securities. Bonds issued under this article are securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, state banks and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them.

(f)

Construction of section. This section, being necessary for the welfare of the state and its residents, shall be liberally construed to effect the purpose of this section.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-223. - TIF district consistency with certified comprehensive plan.

The use of lands in a TIF district shall be certified by the planning director as being consistent with the requirements of the comprehensive plan for the area as certified pursuant to 29 Del. C. § 9103(f), with the requirements of the City Charter, and with the requirements of the city's zoning code, including any required variances or special exceptions.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-224. - Construction of article.

This article, being necessary for the welfare of the city and its residents, shall be liberally construed to effect the purpose of this article.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Sec. 8-225. - Taxation of leased property in TIF district.

Whenever the city, as lessor, leases its property within the TIF district, the property shall be assessed and taxed in the same manner as privately owned property, and the lease or contract shall provide that the lessee shall pay taxes or payments in lieu of taxes upon the assessed value of the entire property and not merely the assessed value of the leasehold interest.

(Ord. No. 03-063(sub 1), § 1, 10-16-03)

Secs. 8-226—8-240. - Reserved.