DBE meeting its commitments to Dewey
With the grand opening of Hyatt Place Hotel in Dewey Beach last September -the first-ever Hyatt brand in Delaware - along with the construction and sale of phase 1 oceanside condominiums atop the new hotel, it is worthwhile to review the array of economic, employment and cultural benefits being realized by the Lighthouse Cove (formerly Ruddertowne) resort project, owned by Dewey Beach Enterprises Inc.
Let’s begin with jobs. More than 200 full time and seasonal construction jobs were generated during phase 1 of the project. With construction unemployment still exceedingly high throughout the region, jobs for working families should never again be held hostage to out-of-state special interest groups, like Citizens to Preserve Dewey, determined to obstruct economic progress in Dewey Beach and Delaware.
Even during this winter, the new Hyatt Place Hotel has 26 new full-time and part-time employees, with a total of 47 employees projected at the height of the coming summer season. The highly renowned Que Pasa and Lighthouse restaurants at Lighthouse Cove generate more than 80 shoulder season and summer jobs. Every job in Delaware matters; no job should be ridiculed or forfeited.
DBE’s economic projections - made available in unprecedented fashion to the public since 2010 - are being validated at every stage of this redevelopment project. For the phase 1 construction, DBE paid the Town of Dewey Beach $480,000 for the building permit for the Hyatt Hotel - an extraordinary permit fee for a town of such small size. Future building permits for phase II of the resort project will generate comparable new building permit revenue.
The Town of Dewey Beach and Sussex County are both reaping a windfall from transfer taxes related to the sale of the penthouse condominium units. Eight of the phase 1 condominiums have already pre-sold for more than $600,000 each for a two-bedroom, two-bath unit - establishing a new price threshold for resort property in Dewey Beach - which will likely cascade to residential properties of all types throughout the town over the coming months and years. As President Kennedy stated, "A rising tide lifts all boats."
An initial two-year sales projection translates to $320,000 or more in new transfer tax revenue, shared equally between the Town of Dewey Beach and Sussex County. Over time, with complete project build-out, total transfer taxes are estimated at $1,920,000. Moreover, these revenues will re-occur each time any condominium unit is resold.
Transfer taxes are just the beginning of new revenue to town, county and state coffers related to the Lighthouse Cove project. In addition to expanded town business license fees and parking revenue, the condominiums are subject to the town's rental accommodations tax, with revenues to the town projected in excess of $200,000 annually upon project completion. Condo owners must also purchase a town business license if they wish to rent their unit. The recurring revenue to the town is projected at $312,000 annually, drawn from accommodations taxes, business licenses, and parking revenue.
Construction and permanent jobs at Lighthouse Cove generate federal and state income taxes, along with the income taxes payable to the State of Delaware realized from the rental of the condominium units. Further, the project will generate millions of dollars in property taxes paid to Sussex County over the coming decade.
The new Hyatt Place Hotel is subject to the state's eight percent lodging tax. These revenues are allocated to the state’s general fund, tourism initiatives, and beach replenishment projects, all of which directly and indirectly benefit Dewey Beach and all of the resort towns along the Delaware coastline.
DBE is further bringing the town’s comprehensive plan to reality, having committed to numerous amenities long-sought by the town. These include, but are not limited to, an expanded public bayside beach, public restrooms, and future recreational access baywalk, sunset gazebo and conference center.
The Lighthouse Cove resort project is meeting every commitment it promised: significant new revenue streams to the Town of Dewey Beach, Sussex County, and the State of Delaware without seeking any public financing or special tax benefits; newly created construction, seasonal and full-time employment opportunities; expanding Dewey Beach’s shoulder season to benefit residents and businesses alike; and helping to irrevocably promote Dewey Beach as a family-friendly destination. Every municipality in Delaware should be so fortunate.
Thank you DBE, and all Dewey businesses, for what you do to support our town.
J. V. "Zeke" Przygocki
Former Dewey Beach commissioner and resident for 13 years