The proposed data center and property taxes dominated the business news scene this week.
Soiid coverage from Spotlight Delaware highlighted the many issues that come with data centers and the aftermath of the statewide property reassessment process.
The biggest issue surrounding the data center proposal is the massive electricity consumption of such centers, and whether some of those costs shift to residential and small business ratepayers.
Big users get deals on electricity, and a complex and sometimes opaque regulatory process surrounds the setting of other rates.
This issue and others have reached the "what if" stage, and many unknowns surround the proposal. The co-developer has experience in this industry and is well aware of potential pushback.
Phase 1 falls under current zoning standards and is likely to make its way through the county's complex approval process - if developers decide to play the long game.
I suspect that an energy project will emerge at the Delaware City Refining Co. site, given Delaware's lack of in-state generating capacity.
The sprawling 5,000-acre refinery site has the potential to house solar and hydrogen projects, along with a combined cycle natural gas-fired plant. A mini nuclear reactor is also a possibility.
The above scenarios will touch off a fierce debate that will be needed in plotting a long-term future for the refinery site.
The property assessment issue is a code red issue, especially in the case of New Castle County, where gains in the value of office and other business properties trailed the growth in residential property values. At the same time, valuable properties such as the massive Amazon site near Newport got a big tax break.
One example of what we are seeing is downtown Wilmington, where the value of some office high-rises has fallen dramatically. In at least one case, the value of an office high rise fell below the size of its mortgage.
The result was higher taxes on many properties, exacerbated by legislation that allowed school districts to raise property taxes by 10% when reassessing values. At the same time, early signs of gentrification and newcomers willing to pay higher home prices boosted assessed values in Wilmington.
Related issues may have taken place with some of the aging, high-maintenance properties in "Chateau County" that did not appreciate as rapidly as smaller homes.
It leaves legislators and counties with tough choices in an upcoming special session. Meaningful reforms will take longer, and neither the business nor the homeowner communities will be happy with the outcome.
There will be considerable noise about Tyler Technologies, the organization that handled the reassessment.
While the process was by no means perfect, reassessment did shed light on the long-running problem of financing public schools.
That issue had largely been swept under the rug, thanks to the state's generous but outdated student funding formula..
After all, it was a lawsuit and the lack of county and state action over the decades that led to a settlement with the three counties over the fairness of the system. The result was a reassessment that brought us to this place. - Doug Rainey, chief content officer.


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