By 1808Delaware
A major corporate relocation carrying an estimated $48 million initial investment could do more than bring a new headquarters and manufacturing operation to Delaware. It could also open roughly 70 acres in the city’s southwest quadrant to additional industrial development.
After action by Council in late July, the City of Delaware is moving toward a package of incentives and infrastructure arrangements designed to help Guild Associates relocate from Dublin to a site near Curtis Street and London Road. The proposed first phase calls for an approximately 169,000-square-foot headquarters and manufacturing facility on about 20 acres.
But the project’s significance extends beyond that first building. The development would require construction of a new public roadway and extension of utilities into land that is already largely surrounded by development. Those improvements would also provide access and services to as many as seven additional industrial sites. Without the incentives and infrastructure investment, the developer and company are said to be hesitant to move ahead.
A New Home For Guild Associates
Guild Strategic Properties LLC proposes to develop the approximately 70-acre property as a phased corporate, manufacturing, distribution, and industrial campus adjacent to the existing Pittsburgh Drive Industrial Park. Guild Associates, a chemical engineering firm currently based in Dublin, would become its first occupant.
The proposed building would include approximately 125,000 square feet devoted to production, warehousing, logistics, and distribution, along with about 44,000 square feet of corporate office space. Plans also contemplate a potential future 50,000-square-foot expansion.
Guild develops products for commercial and military applications. Those include dry chemical technologies used to convert landfill gases into consumable natural gas and a laundry system that originated during Operation Desert Storm and recycles approximately 99% of the water it uses. The company reports approximately 110 employees, including about 100 currently working in Ohio. Planning estimates contemplate the possibility of another 15 employees over three years, although those numbers would not constitute binding job-creation commitments under the proposed incentive framework.
Current estimates put the overall initial investment at approximately $48 million. That includes about $8 million for site acquisition, roadway and utility costs; approximately $30 million for construction of the first Guild building; and another $10 million for equipment, fixtures, furniture, and relocation. Of the $8 million in site-related costs, approximately $4 million is attributed to public roadway and utility infrastructure.
Building A Road To Future Development
One of the unusual aspects of the project is where the first building would sit. Rather than being located near the front of the property, the Guild facility would be toward the rear of the 70-acre site. Reaching it would require construction of approximately 2,800 linear feet of public access roadway along with associated utility extensions. Once constructed, however, that same infrastructure would make the remainder of the property considerably more development-ready.
The conceptual plan anticipates as many as seven additional industrial lots, generally ranging from approximately three to seven acres. In practical terms, the infrastructure required to make the Guild project possible would also create the backbone for a larger employment and industrial campus.
The developer would be responsible for preparing a traffic impact study that meets city requirements and for constructing the roadway and utility improvements according to city-approved plans. Guild Strategic Properties would also make a $500,000 transportation contribution to the city before issuance of the first vertical building permit. That money would be nonrefundable and restricted for use toward a future roundabout or another transportation improvement identified through the traffic impact study.
Incentives Under Discussion
Because several different incentives and public approvals would have to work together, city officials and the developer negotiated a Development Incentive Term Sheet establishing a framework for further negotiations. The proposal does not yet grant those incentives.
Among the measures city staff would prepare for later consideration is an expansion of Delaware’s Community Reinvestment Area to include the project site. Once that expansion took effect, the city would pursue the highest property tax abatement legally available for the first Guild development. If a greater exemption is either unavailable or unsupported by the affected school district or districts, the city’s default negotiating position would be a 75% exemption for 15 years. Any later development phase would have to be considered separately.
The framework also calls for negotiation of a 15-year incentive payment equal to 50% of the net project income tax receipts actually received and retained by the city from the first Guild development. Those payments would require a separate agreement and would be subject to annual verification, reconciliation and appropriation.
TIF Could Help Pay For Infrastructure
Another component would be creation of a sitewide Tax Increment Financing district. The proposed TIF would cover 100% of non-school property taxes for as long as 30 years and would be structured so that the affected school district and joint vocational school district are held harmless. A TIF generally captures growth in property tax revenue resulting from new development and directs that revenue toward qualifying public improvements associated with the project.
Under Delaware’s proposed framework, infrastructure reimbursement would be capped at the lesser of 60% of final documented costs or 100% of those costs after subtracting public or quasi-public grants received for the same improvements. The city would also help coordinate grant opportunities, workforce programs and the development-review process.
The term sheet specifically does not promise a grant award, city cash contribution, fee waiver, permit approval, land acquisition or another commitment that has not separately gone before City Council.
What Council Actually Approved
The immediate legislation passed by City Council was considerably narrower than the complete incentive package that could eventually emerge. The resolution authorized the city manager to execute the non-binding term sheet and allow city staff and legal counsel to continue negotiations and prepare the ordinances, agreements and other documents necessary to carry out the project.
According to city documents, the developer and company face deadlines involving site control and closing. Establishing the framework now would allow the parties to determine whether they are generally in agreement before incurring additional engineering, acquisition, development and legal expenses.
Approval of the resolution did not expand the Community Reinvestment Area. It did not grant a tax exemption, create the TIF, appropriate money, authorize infrastructure reimbursement, approve income-tax sharing, acquire property, waive development fees, approve a development plan or issue permits. Each of those actions requiring legislative approval would have to return separately to City Council.
That distinction leaves Council with final authority over the individual elements of the incentive package even if it agrees now to continue working from the proposed framework.
