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In The News

New Castle County wants to buy Sheraton hotel, convert it to emergency homeless shelter

From Delaware Online

The New Castle County Council plans to discuss and vote on a plan to purchase the Sheraton hotel on Airport Road and convert it into an emergency homeless shelter.

The Sheraton Wilmington South, located just off Exit 5A on I-95, is up for auction beginning Monday, according to a web listing. Bidding starts at $5.5 million. The auction ends Wednesday.

The county wants to use funding from the more than $190 million it has in “reserve allocation” from the more than $322 million it received from the CARES Act during the coronavirus pandemic.

The county, according to an agenda posted for an upcoming meeting Tuesday night, plans to purchase the hotel and operate it as “emergency shelter and temporary housing for our most vulnerable residents, and others as deemed necessary by the Department of Community Services, during and in response to the COVID-19 pandemic.”

The hotel, which just underwent a $6.4 million renovation, has 192 rooms and the property is more than 6 acres. It has a long history in Delaware despite being in operation for less than 10 years. The hotel was originally built for $25 million by principle developer Joseph L. Capano Sr. as a Radisson Hotel in 2000, but it sat empty for years after it was found to have been built, in a floodplain, one-third larger than specified in its permits.

A court battle ensued, and the owners filed for bankruptcy in 2001.

Pennsylvania-based Hersha Hospitality Management purchased the building for $15 million and converted it to a Sheraton. It opened in 2011.

It was announced in September that the hotel was going to auction.

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Bayhealth proposes $19 million project that would add beds at Sussex Campus

From Delaware Business Now

Bayhealth, the state’s second-largest hospital system, recently presented a Certificate of Public Review to the Delaware Health Resources Board requesting approval to add additional inpatient beds, as well as a C-section suite at Bayhealth Hospital, Sussex Campus.

The estimate for the expansion is $19 million. The Sussex Campus had a price tag estimated at between $275 million to $300 million.

“After our move to the Sussex Campus in early 2019, we saw significant growth in admissions, observation cases, and the number of babies born,” said Bayhealth CEO Terry Murphy. “Sussex County is undergoing significant population growth, which we anticipate will further increase the need for services and we want to be prepared to meet that need.”

The proposal calls for additional medical/surgical beds to be located in 17,300 square feet of available space on the fifth floor of the building. Existing space will be converted into 24 acuity adaptable private patient beds. Acuity adaptable refers to the patient being able to stay in the unit between admission and discharge, an approach that can save money and improve care.

Five women’s services beds will be added to the third floor, which will require renovating existing administrative office space into private patient rooms. The C-section suite will be constructed nearby in 1,500 square feet of shelled space.

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2021 State Business Tax Climate Index

From the Tax Foundation

Delaware’s overall rank in the 2021 State Business Tax Climate Index was 13th nationally, but 50th for corporate taxes and 42nd for individual taxes.

The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.

Read the report

Decade-old land deal prompts political backlash, legal fight

From Delaware Online

In late 2008, with the real estate market in free fall, a land-hungry Delaware Department of Transportation purchased two parcels of rural flatland next to Route 1 south of Dover for nearly $2.8 million.

Ten years later, it sold the parcels for $270,000 to influential lawyer and developer John Paradee. It was a price the state says reflected a DelDOT decree that the land would never gain a direct commercial turn-on or turnoff from the adjacent highway – Delaware’s primary north-south artery.

Today, those deals and their multimillion-dollar price discrepancies are attracting controversy, manifested as political assaults on Delaware’s Democratic Party establishment just weeks before the November election.

The land sale also sits at the center of an ongoing lawsuit in Delaware’s business court over DelDOT’s potential granting of accesses from Route 1 to new commercial real estate projects in the Milford-to-Frederica corridor.

The suit is among the latest jockeying between developers seeking to win a race to riches in an area planned as the state’s next exurban hotbed, one whose growth may hinge on the success of the nearby taxpayer-subsidized youth sports complex, DE Turf.

At the center of it all is Paradee, who proclaims to be “widely recognized for his ability to secure approval for difficult or controversial projects.” In December 2018, he purchased the roughly 11 acres of DelDOT land with a team of investors. At 44%, Paradee’s stake is the largest in the partnership.

Combined with adjacent parcels, the land was intended to form the platform on which to build Asbury Square, a hotel, restaurant and retail development. It is one of three ambitiously proposed projects designed to capitalize on government’s push to encourage development in the corridor.

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True Access awarded $657,000 to launch Hispanic business loan program

From Delaware Business Now

True Access Capital, Wilmington (formerly First State Community Loan Fund) will expand its lending to minority-owned businesses, with an emphasis on Hispanic-owned businesses, with the help of a $657,000 award from the Community Development Financial Institution (CDFI) Fund.

The fund is a program of the U.S. Department of the Treasury intended to increase lending in low-income and economically distressed communities.

“Delaware’s Hispanic businesses are rapidly growing in number and in size, and this award from the US Treasury’s CDFI program to True Access Capital will help fuel the continued growth of Hispanic entrepreneurs in Delaware,” U.S. Sen. Chris Coons said of the award. “Where some lenders saw risk, CDFI programs show us there is still ‘Blue Ocean’ in communities that are mistakenly overlooked.”

The CDFI grant will expand True Access Capital’s reach to minority-owned businesses, for whom credit access is a significant hurdle.

“We know our way around this unlevel playing field, and we’ve long helped minority business owners navigate it,” said Vandell Hampton, Jr., True Access Capital CEO. “The demand for business financing and development for Hispanic businesses has exploded in recent years, and we know that Hispanic business owners face the same challenges in accessing capital that African American entrepreneurs face, so this expansion of reach is a natural direction for us.”

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Up to $136 million will support statewide programs addressing COVID-19 impacts

From Delaware State News

NEW CASTLE  – Up to $136 million from the New Castle County’s federal CARES Act allocation will support six state-wide programs targeting unemployment insurance, childcare, coronavirus testing and more, New Castle County Executive Matt Meyer announced this week.

This funding will supplement the $927 million of CARES Act funding the state received directly from the federal government.

Mr. Meyer and the state developed a three-step approach for the funding agreement.

They determined the total cost of all six statewide programs, then determined the percentage of the cost of those six statewide programs for the benefit of county residents and businesses, and finally, determined the cost share between the state and New Castle County.

“We always work collaboratively with our federal, state and municipal governments but particularly in times of crisis,” Mr. Meyer said in a prepared statement. “My thanks to County Council, to the Governor’s office and to Delaware’s Office of Management and Budget to reach this agreement to help keep our community healthy and sustain our economy during this crisis.”

Statewide programs that New Castle County CARES Act funding will support the Unemployment Insurance Trust Fund, the essential childcare program, statewide testing, statewide contact tracing, an enhanced rent and utility program and a hospitality emergency loan program.

Based on actual unemployment claims through mid-September and estimates through the rest of the year, the total statewide amount of COVID-19 unemployment claims paid for the forty-two-week period, March 15 to Dec. 30, will be $273 million. Approximately 55% of the statewide claims are from residents in New Castle County. A county contribution up to $67.5 million will be made.

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Bayhealth to build $35M ER center, hybrid office near Milton

From Delaware Business Times

MILTON — One year after withdrawing an application for a freestanding emergency department 2 miles east of Harbeson, Bayhealth will be moving forward with opening an emergency room and walk-in care center within the next two years.

The $35 million facility will bring primary care physicians, specialists, diagnostic services and emergency care to southern Delaware on 18 acres near the intersection of Lewes-Georgetown Highway (Route 9) and Hudson Road. Early plans show a building measuring between 30,000 to 40,000 square feet and Bayhealth officials anticipate creating between 50 and 75 jobs. The walk-in center and emergency department approved by the Delaware Health Resources Board is estimated at $10.2 million.

Bayhealth’s Milton facility represents the health care system’s growing reach in southern Delaware and the announcement more than a year after opening a new $315 million facility in Milford. Bayhealth also partnered up with Nemours Children’s Health System on a new facility there, and Nemours will open primary care and senior care in November.

“Sussex County is growing at an exponential rate. The area directly surrounding the location of our new center, along Hudson Road and Route 9, is growing especially fast,” Bayhealth President and CEO Terry Murphy told Delaware Business Times. “There are also very few health care providers located in close proximity to our new site. This new location will provide our southern Delaware community with much-needed health care services all located in one convenient center.”

The land around Route 9 has one of the fastest  growing populations in Delaware, increasing 21% from 35,295 residents in 2010 to 42,729 in 2019, according to a study done by the marketing firm Claritas Company. The 65 and older population is particularly booming, growing nearly 60% in the same span to 10,135 residents. In the next four years, the overall population is projected to grow 8.2%, including an 18% growth in senior residents.

Beebe Healthcare, based in Lewes, has also been striving to meet the surge in people in the last decade. This spring, Beebe opened a freestanding emergency department and a cancer center at the Beebe South Coastal Health Campus near Millville. Construction work is also underway at Beebe’s $124 million surgical hospital on Route 24 near Rehoboth Beach with a target opening in 2022. Recent plans for a Milton campus recently were withdrawn.

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As Delaware’s bioscience sector grows, space is in short supply

From Delaware Business Times

From the earliest scientific advancements made at DuPont more than two centuries ago to the brand-new cancer therapies being developed by Incyte, Delaware has a long history of laboratory-based research and development.

As the competition for those future-billion-dollar companies heats up, however, the First State is often at a disadvantage when it comes to retaining such startups. The state has fostered an environment of innovation, often connected through the University of Delaware, but it is now watching expanding companies seek out-of-state spaces to further their growth due to a lack of resources here.

According to a recent survey of 60 companies that utilize labs by the Delaware Prosperity Partnership (DPP), the state’s economic development agency, 12 anticipate needing more lab space within the next three years, totaling about 150,000 square feet. Only half of those companies said that they could accommodate that growth currently though, meaning tens of thousands of square feet of lab space need to be developed.

It’s not just about meeting the needs of Delaware’s current companies, however, but also attracting new prospects. DPP officials reported that over the past two and a half years, it has worked with 30 companies that were seeking lab space. It currently has 12 such companies in the pipeline, the majority of which need “graduated” lab space, or facilities containing more advanced features, measuring between 10,000 and 30,000 square feet. If able to be located, they could create upward of 400 well-paying jobs.

The challenge now is to continue to grow the innovative ecosystem for research in Delaware while also investing in new lab development to support their scaled growth. Neighboring competitors Maryland and Pennsylvania, which are home to hundreds of bioscience companies and have decades of financial backing and resources at their disposal, are ready and willing to poach those companies if progress isn’t made.

Bill Provine, president and CEO of the Delaware Innovation Space, a nonprofit incubator and accelerator that is home to 18 companies at the DuPont Experimental Station, agreed that more labs were needed in the state and that government aid may be needed to spur it.

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Policies will allow outdoor dining options in Rehoboth

From Delaware State News

REHOBOTH BEACH — As the weather starts to cool, Rehoboth Beach restaurants will be able to use outdoor space with heaters for dining options.

The Rehoboth commissioners approved a policy regarding the use of outdoor space Tuesday.

Restaurants must have a straight and continuous minimum of 5 feet of sidewalk in front of any outdoor seating that must be maintained at all times. Space allows pedestrians to move up and down the sidewalks without adjusting their path because of the outdoor seating.

The approved policy also requires that outdoor tables be set 8 feet apart from each other. A barrier is needed between the tables and the pedestrian path if a restaurant is serving alcohol. Commissioners also approved tents and canopies without sides to be used in outdoor dining areas.

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University of Delaware employees to take 5% pay cut for remainder of fiscal year

From Delaware Online

University of Delaware’s non-union employees will all take a 5% pay cut for the remainder of the fiscal year, the latest in a string of efforts to shore up the school’s projected $250 million financial deficit brought on by the COVID-19 pandemic.

The pay cut will come in the form of nine furloughed days: three days before Thanksgiving, three before Christmas, and three at employees’ discretion.

The salary reduction will be evenly spread through paychecks, starting Nov. 1 until the end of June 2021.

Two weeks ago, the university announced that it was facing a budget deficit of about $250 million, as significant revenue loss and increased expenses from the pandemic strained finances.

At the time, employees were offered a voluntary retirement option. Since then, 138 employees have expressed interest in early retirement, and will receive final approval tomorrow.

Over the summer, senior administrators at the university took a 10% pay cut. Thursday’s cut will be in addition to that.

Some units may face a salary reduction greater than 5%, the university said in a message to faculty and staff on Thursday. Future workforce reductions, restructuring and other cost-saving measures could be announced down the line.

The pay cut does not apply to student employees, postdoctoral fellows or anyone on an H-1B visa. The university continues to negotiate with faculty and other unions.

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