Why Should Delaware Care?
Delaware’s Downtown Development District program has been a tool for jurisdictions across the state to encourage investment in key areas for more than 10 years. While there has been mounting controversy in Georgetown over its homeless population, commercial offerings and housing stock, the town has made limited use of the development program in recent years.
The town of Georgetown is seeking to change the boundaries of its Downtown Development District, as leaders hope to bring in more mixed-use growth and encourage investment in local businesses.
Part of a state-run program aimed at increasing investment in underdeveloped areas of Delaware municipalities, investors receive local and state financial incentives for residential and commercial development projects within a development district boundary.
But Georgetown was one of the lowest users of the incentives last year among the 12 jurisdictions in the state that participate in the program.
Projects in the Sussex County seat received just $70,000 in development district rebates in 2025, coming in above Delaware City, Laurel and Clayton, which each did not secure any.
Seaford, a jurisdiction of a similar size to Georgetown, was awarded $328,000, according to a report from the Delaware State Housing Authority. The state awarded $47.4 million in total to projects last year.
Town leaders say their strategy to increase the community’s use of the program is to remove some town- and state-owned buildings from the district that are ineligible for the benefits, and shift the district boundaries to encompass more of Kimmeytown, a lower-income, predominantly Hispanic neighborhood.
“We are putting all our chips on the table,” Brian Olszak, the town’s Community Development Director, told Spotlight Delaware.
Olszak presented the town’s proposed changes to its Downtown Development District at a town council meeting on Jan. 12. The council voted unanimously in favor of the proposed changes.
The next step, Olszak said, is for the town to submit the proposed adjustments to the Delaware State Housing Authority, the state agency that runs the program, by Feb. 1. If approved, the changes would take effect in Georgetown at the end of August.
What is a Downtown Development District?
The Downtown Development District program was proposed by then-Gov. Jack Markell and passed by the state legislature in 2014 as a means of encouraging redevelopment in areas of Delaware cities and towns that weren’t experiencing much investment, said Matt Heckles, director of the Delaware State Housing Authority.
Wilmington, Dover and Seaford were the first three cities approved for an initial 10-year stint in the program in 2015. Jurisdictions are then eligible for two more five-year renewals of their downtown development areas, for a total of 20 years in the program.
Georgetown was a part of the second wave of municipalities that began participating in the program in 2016, so the community is up for its renewal this year.
Other downtown development areas that have joined during the program’s tenure include Harrington, Laurel, Milford, Smyrna, Clayton, Delaware City, Middletown and New Castle.
Dover has used the program to finance some aspects of its Capital City revitalization project, while Wilmington has utilized the incentives for a number of projects downtown, including many of the apartment conversion projects in the Market Street corridor.
For properties within a downtown development district, there are funding sources and incentives available at both the local and state level. Many of the local benefits are automatic for businesses, like building permit fee discounts and waiving of business license fees. But some of the state rebate – or refund – opportunities, which can finance up to 20% of project costs, require a formal application to the state housing authority.
Heckles said the program is designed so that municipalities take a look at where development has or has not been successful over the first 10 years, like Georgetown is doing, and adjust their district boundaries accordingly.
“It’s very healthy for a city, after 10 years of participating in the program, to see what’s working and what’s not,” Heckles told Spotlight Delaware.
Georgetown: A closer look
The number of acres that a municipality is allowed to include in its Downtown Development District depends on its population and size. Of the roughly 3,000 acres within Georgetown town limits, 105 are a part of its development district.
The proposed updated district boundaries would stretch south to the Little League baseball field on Parsons Lane, west to North Bedford Street, and north to the majority of the Kimmeytown neighborhood. It would also include the majority of East Market Street leading up to The Circle.
Olszak, the planning director, said the town opted to remove some buildings from the district that do not qualify for the program incentives, like the newly renovated, state-owned Sussex Family Courthouse Building and two buildings owned by the First State Community Action Agency, which are unlikely to receive rebates.
This allowed the town to extend the 105 acres of its district to include more of East Market Street and North Bedford Street, which have properties with more potential to benefit from the program, he added.
A significant challenge for the program in Georgetown, Olszak said, is getting the information out about the incentives to members of the Latino community, who make up more than half the town’s population, according to a 2023 census.
Olszak said the “low-hanging fruit” for the town government would simply be translating the program materials into Spanish, but the town will also need to partner with some community organizations to do outreach about the program.
Mary Dupont, executive director of La Plaza, a Georgetown-based community group that provides support to Latino-owned businesses in the area, said it can be difficult for Latino business owners to feel comfortable taking advantage of state-run programs like the Downtown Development Districts.
Latino business owners tend to be distrustful of state programs, she said, and tend to stick to themselves as a community.
While the Kimmeytown neighborhood has seen a substantial increase in the number of Latino-owned markets and other small businesses over the past 10 years, Dupont said she is only aware of one business, Splash Laundromat, taking advantage of the development program incentives during that time period.
Owners of Splash Laundromat did not respond to Spotlight Delaware’s request for comment.
Heckles and Olszak both emphasized the option for technical assistance at the local and state levels for businesses to take advantage of in order to successfully fill out the rebate program applications.
Georgetown’s downtown development renewal application also highlights some specific properties within the updated district that town leaders hope specifically will receive state rebate funding, including the Isaac and Sons cold storage building, which is planned to house the new ASPIRA bilingual charter school.
However, Dan Bond, who owns the building, said the project actually does not qualify for the state rebates because the school will receive state funding. Bond said the town has still agreed to give his project the local downtown development incentives, like reduced permitting fees and an expedited review process.
Bond, a self-identified “frequent flyer” of the rebate program after having used it to help fund eight redevelopment projects in Milford, said he and the other school organizers are disappointed to miss out on what could have amounted to about $1.5 million in state funding for the project, but they will find other funding sources to get it to the finish line.
George Meringolo, leader of the hotly contested Little Living project with plans to build roughly 20 tiny homes on East Market Street, said his group is going to seek about $500,000, or 20% of the total construction costs, in state rebates.
The Little Living project still needs town council approval for the rezoning of its property, which is within the Downtown Development District, before it can begin construction.
Georgetown Mayor Bill West also told Spotlight Delaware that Georgetown Apartments II, an in-progress affordable housing project, is another venture the town is focused on for the downtown development program.
A mixed-use model
Heckles, the state housing director, pointed to mixed-use development plans, which combine housing and commercial uses into one property, as the ideal type of project for the downtown development district.
“My personal favorite is when you have a little bit of both – a Main Street kind of look, where maybe you have a shop on the first floor and a couple of apartments upstairs,” Heckles said.
Nina David, an urban planning professor at the University of Delaware, said a mix of residential and commercial development is key for sustained success with a program like the downtown districts.
“You need people who will be able to use those commercial districts, not just as a destination, where they’re having to hop in a car to come and utilize the district, but where you’re able to walk,” David said.
Olszak similarly said the town hopes to encourage mixed use development as a way of tackling residents’ competing concerns about the lack of commercial business in downtown Georgetown and the dearth of affordable housing for the town’s homeless population.
In the midst of the heated debate over the cottage ordinance in town late last year, which allowed for the Little Living project to move forward, many residents said at council meetings that they want to see the limited open property that remains in town be used for a coffee shop or a bakery, instead of for a tiny homes project.
West, Georgetown’s mayor, agreed with Olszak that mixed-use development is the best way to balance residents’ priority of wanting more businesses downtown and the town’s need to provide more affordable housing.
West said he has spoken with residents who would like to open a guitar studio or a picture frame matting store downtown, but wouldn’t need an entire building for their business.
“We haven’t moved anywhere with the [businesses] that were in the Downtown Development District,” West said. “This will give an opportunity to refresh peoples’ minds and get started with something that makes sense.”
