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January  12,  2011

County will waive property
taxes on reopened refinery

County Council, with considerable reluctance, is about to grant Delaware City Refinery Co. a $2 million tax break.

A majority of Council members said at a finance committee meeting on Jan. 11, that they will support an ordinance exempting the company that is preparing to reopen the former Valero refinery this spring from property taxes for the next five years. The vote originally had been scheduled for that evening, but Council's semi-monthly plenary session was postponed a week in anticipation of the snowstorm.

Councilman George Smiley, co-chair of the committee, set the tone for the discussion when he said he finds it "very difficult to give up any county revenue" in light of continuing budget problems. But, he added, he will vote in favor of the measure to fulfill county government's share of the incentive package that state government offered to attract a company to reopen the refinery restoring jobs lost when Valero closed it.

Robert Weiner was the only one participating in the discussion who did not commit himself either way after asking if failure to enact the ordinance would be a "deal-breaker." Alan Levin, secretary of the state's economic development office, replied that it would be a breach of faith. "This is part and parcel of the arrangements we made" and the company has since "acted in good faith" to uphold its part of the bargain, he said. "They are ahead of schedule; they are moving forward," he added.

While the Council members seemed most disturbed that county government was not included in the discussion leading up to the agreement, they were told that it was included on the plus side of the register as possible recipient of a donation of up to 93 acres of land the company owns in the vicinity of the plant which it could decide to sell. Discussions in that regard are under way, Levin said.

Jea Street said he objected to state government's assumption that the county would support its efforts although it "turns a deaf ear" whenever county government "needs some help." He said he will seek state support for curbing gun violence in Wilmington.

David Tackett said the job-creation aspects of the refinery deal are the paramount reason for supporting the tax incentive. "I wouldn't have done it 10 years ago, [but] given the conditions we have today, ... any opportunity to put people back to work [should be taken]," he said.

Karl Kalbacher, director of the county Office of Redevelopment, said the refinery now has 213 full-time employees and more than 1,000 contract workers. When it gets into full operation later in the year, it will employ 474 workers and about 220 contractors. Two-thirds of the current workforce are Delawareans, a large majority of whom live in New Castle County, he said.

The fiscal note attached to the ordinance says the county stands to forgo  $407,678 in annual property tax, based on the present rate. It received $761,362 in real estate transfer tax from the sale of the property last year.

Delaware City Refinery Co. is a unit of P.B.F. Energy Partners, itself a joint venture of Blackstone Group and First Reserve Corp.

Although a separate matter, a similar ordinance granting a five year property-tax exemption to Fisker Automotive, which is reopening the former General Motors plant on Boxwood Road, has been pending in Council since November,  2009. Delaforum could not immediately learn why a vote on that measure has been delayed.

Get more information about this topic

Read previous Delaforum article: County's role in refinery incentives being determined

CLICK HERE to access a background paper concerning the refinery.

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