Dover – In the middle Delmarva corrugated cardboard packagingIt’s toward a “soft start” of operations, city of Dover officials have granted the manufacturer a 10-year property tax rebate in addition to similar incentives from Kent County.
Under the city code, Delmarva Corrugated will receive full tax relief on the 497,000 square foot building on Route 15 in the first full year after construction. Each following year for the following decade, the allowance decreases by 10% per year until it reaches the floor of 10% in the ninth year. Dover City Council unanimously approved the abatement on September 27.
Dover officials estimate that by 2022, the corrugated box maker will pay $ 16,331.50 in property taxes and cut $ 64,592 in taxes. By the end of the decade, the company will pay approximately $ 80,927.49 in property taxes.
“I was delighted to see this particular effort for an important concept,” Dover City Councilor David Anderson (Fourth District) said at the September 27 council meeting. “We don’t lose anything on taxes, because if it’s empty land, it always gets paid. But we gain on improvements, even if they decrease by 10% less each year. This is a victory for the city. , a victory for the community and a victory for the company.
This incentive is reserved for companies that invest a minimum of $ 3 million in a new or expanded facility in manufacturing areas and hire at least 15 employees. Delmarva Corrugated raised the value of the land to $ 3.93 million and the building is valued at $ 15.5 million, according to Dover officials.
Fulfilling the other abatement requirement, Delmarva Corrugated has hired or made job offers to 53 people, as of September 27. Of that total, 22 were hired, 15 employees are from sister companies, and 16 offers were still pending. .
“I would like to thank the team from Dover, Kent County and the State of Delaware who worked very closely and professionally with us on this project,” said Andreas Akaras, a lawyer who represents Delmarva Corrugated, to the city council of Dover. “If you walk past this building, it’s beautiful and purpose-built for the light industrial manufacturing that will take place there and create good jobs. We can’t wait to be part of the community.
Delmarva Corrugated plans to hire 145 employees in total, including 90 hourly employees. This week, the company launched a smooth start to operations, as most of the work inside the building was completed and the installation of the equipment was going smoothly.
The Dover property tax cut is the latest in a series of incentives Delmarva Corrugated and its parent company US Corrugated have received for building the $ 91 million plant in the heart of the First State. From day one, the company is also said to have made gains as the 40-acre plot sits in an opportunity zone, a designation that prompts investors to put money into funds for long periods of time to benefit from it. tax breaks. Staying in an Opportunity Zone fund for at least five years could see 10% of the gain excluded from taxes, while 10 years translate to tax exempt gains.
The State Council for Development Finance subsequently provided $ 3.1 million in incentives to the project, including a $ 2.73 million capital expenditure grant and a $ 450,000 grant. for job creation. The Kent County Levy Court provided a similar 10-year property tax rebate as well as a $ 75,000 grant from its lesser-known Strategic Fund. The company also received a grant of $ 600,000 from the Delaware Transportation Infrastructure Investment Fund.
As hiring efforts continue in earnest, there have been difficulties meeting one of the key initiatives of US Corrugated founder and board chairman Dennis Mehiel for the Dover “super factory”: hire veterans. Mehiel’s father served in the US Army Air Corps in World War II and is a veteran himself. The facility’s proximity to Dover Air Base has created a new opportunity to open jobs to those leaving the service. Delmarva Corrugated is currently working with Polytech Adult Education to continue their recruitment efforts, Akaras said.
“Some positions will be, I believe, entry level, more related to warehousing, trucking and storage. But some positions will require a higher level of training for the specialized equipment used, ”he said. “The corrugator alone is a $ 10 million piece of equipment. – someone will have to watch eight computer screens in a room to figure it out. This factory is fully automated and relies on system information and engineering processes.
Delmarva Corrugated plans to have two teams in full production by December.