Lewes BPW not likely to waive impact fees for workforce housing project

Officials open to rolling payment into bills for 42 units
October 8, 2019

Negotiations are ongoing between Lewes Board of Public Works and the developer of the Dutchman’s Harvest workforce housing project, a 140-unit project on an 8-acre parcel along Savannah Road, west of the Lewes-to-Georgetown Trail. 

Developer Preston Schell went before the board in August seeking to have the impact fees waived or reduced. However, BPW officials don’t seem to be on board. 

At the BPW’s Sept. 25 meeting, General Manager Darrin Gordon presented the board with an option to roll impact fees into the monthly bills for 42 units, which is the estimated number of units that will be purchased at a lower price by Diamond State Community Land Trust and resold as workforce housing. The remaining 98 units likely will not be granted relief. 

The initial estimate for impact fees was about $1.34 million for the entire project, or about $9,500 per unit. At the Sept. 25 meeting, Gordon said, the number is likely closer to $8,000 per unit.

The developer’s engineer, Zach Crouch of Davis, Bowen and Friedel, said he and Schell met with Gordon privately to discuss the initial request. Crouch said he was able to rework the water and wastewater plan for the adjacent senior-living facility – a project Schell is also involved with – to direct the flow through the Dutchman’s Harvest property to Savannah Road. It was previously going to Kings Highway. By doing so, he said, the cost could be spread across the two projects, saving the developer money.

At the August meeting, Schell expressed concern the impact fees could raise the price tag of units to the point where they were no longer affordable to the local workforce.

The plan is to build 14 multi-family buildings with 10 units in each building. Of the 140 units, 42 will be sold to Diamond State Community Land Trust at direct cost; Schell says he will not take profit from those units, including a standard developer fee. Diamond State will secure funding to purchase the units, then offer them to buyers who make 60 percent to 80 percent of the average median income of Sussex County - $68,700.

The other units will be priced 15 percent above the developer’s cost. All units will have strict requirements to ensure buyers are members of the local workforce.

BPW officials are willing to consider some relief for the 42 units to be controlled by Diamond State. Gordon said there is precedent for customers paying impact fees over time, noting it recently occurred with homeowners in Highland Acres and Savannah Place.

Schell’s request is to spread the cost over 30 years with no interest; however, BPW President Pres Lee said that’s not a likely option.

“I think that has to be taken off the table,” he said. “We’ve done this a few times, and we’ve always made sure we’re whole at the end.”

He asked that BPW staff work with the developer and representatives from Diamond State to come up with a payment schedule for consideration at the board’s next meeting.

Public hearing Oct. 8

Lewes Mayor and City Council will hold a public hearing at 6:30 p.m., Tuesday, Oct. 8, at city hall for the Dutchman’s Harvest project. The city’s planning commission gave a positive recommendation to the proposal at its August meeting. 

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