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What’s New

Prosperity Partnership, North East England counterpart sign cooperative agreement

From Delaware Business Now

The Delaware Prosperity Partnership and the North East Local Enterprise Partnership (LEP), a public, private and education sector partnership in North East England, UK, signed a cooperative agreement to support joint business development.

LEP works in partnership with the business community to grow the economy and create more and better jobs in the region. DPP is Delaware’s economic development agency.

Specifically, the two organizations will work together to support mutually beneficial international expansion for firms that work in:

  • Bioscience/Life Science and Wind Supply Chain
  • Advanced Engineering and FinTech
  • Innovation and Skills

North East England is one of nine official regions of England, which includes Northumberland, County Durham and Tyne and Wear. The North East LEP is responsible for promoting and developing economic growth in the local authority areas of County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.

Representing Delaware was Kurt Foreman, CEO of DPP and Rod Ward, CEO of CSC, a provider of business, legal, tax, and digital brand services. Ward is Co-Chair of the DPP Board of Directors.

Representing the UK was Andrew Hodgson, North East LEP Chair, and Helen Golightly, North East LEP Chief Executive.

Both economic development organizations will promote their partner area as a location for local firms looking for international business expansion opportunities. They will actively collaborate, support joint events, and encourage cross-education and training through the local universities, a release stated.

 

Read more:

https://delawarebusinessnow.com/2019/11/prosperity-partnership-north-east-england-counterpart-sign-cooperative-agreement/

Fairfield by Marriott coming to Middletown

From Delaware Business Now

LNW Hospitality and Axia Hotel Group have announced plans to build a Fairfield by Marriott Hotel in Middletown.

LNW announced on its website that the venture signed a franchise agreement with Marriott and is expected to break ground on a new Fairfield by Marriott in 2020, with an opening scheduled in 2021.

LNW Hospitality develops, owns, and manages hotel assets on the east coast, with three Marriott brands in its portfolio.

The company is best known for renovating and developing hotels on Jeykill Island on the coast of Georgia.

The blog post noted that parent company, Leon N. Weiner & Associates, Inc. has been in Delaware for more than 70 years. In Middletown itself, through its ownership of Middletown Trace Apartments and Fairfield Commons Apartments.

“We see tremendous opportunity in Middletown,” said Kevin Kelly, chairman of LNWA. “The town is thriving, Fairfield by Marriott is a great brand, and our partner, Axia, has a strong track record in town as well.”

Axia Hotel Group has been in the hotel business in Delaware since the 1960s and has developed eight hotels.

 

Read more:

https://delawarebusinessnow.com/2019/11/fairfield-by-marriott-coming-to-middletown/

Chief justice submits final budget request

From Delaware State News

DOVER — Chief Justice Leo Strine made his final scheduled appearance as the head of Delaware’s judiciary Monday. The chief justice, who plans to step down from the bench at the end of the month, presented his budget request to state officials, although he outlined it in writing earlier this month.

Budget hearings began early this year to allow Chief Justice Strine to stick to his planned departure date, with his post not set to be filled immediately.

These fall hearings represent the next step in the budget process, giving state departments a chance to present their spending requests for the fiscal year starting next July. From here, the governor works with the Office of Management and Budget to prepare his budget recommendations, which are officially unveiled and presented to lawmakers in January.

Although budget asks are submitted to OMB and the governor ahead of time, the presentations enable budget officials to get more information on certain things and hear from members of the public.

The chief justice’s letters, sent to OMB Director Mike Jackson Oct. 15, were an opportunity to deliver a final message, and the priorities as detailed in them should come as no surprise to anyone who has followed Chief Justice Strine’s tenure.

His asks in the letters are more general rather than specific dollar amounts, calling on the state to provide more legal support for the poor, fully fund a judicial technology fund, expand the court’s workforce, raise pay for state workers and partner with the private sector to fund new judicial facilities.

The total operating request is for $104.3 million. The judicial branch’s current year operating budget is $100.7 million.

 

Read more:

https://delawarestatenews.net/news/chief-justice-submits-final-budget-request/

Market Manipulation: The Good, the Bad, and the Ugly

While government incentives are typically touted as great tools for economic development and job creation, they tend to have a negative impact on the community.

Should government decide which businesses operate within a market?

Tax breaks for businesses eliminate revenue, while employment incentives create an additional burden on local services, schools, and health systems by bringing in more residents. The net loss to the community can be exacerbated by the taxpayer burden of monetary incentives.

In addition to offering little benefit to the local community, they don’t target what actually drives a business to select a location to establish or expand: talent, geographic location, and markets.

When Bloom Energy located in Delaware in exchange for subsidies amounting to hundreds of millions of dollars, the company promised thousands of jobs. Now, Bloom employs a fraction of what it promised and its officials do not expect the company “to be profitable for the foreseeable future.”

But Bloom isn’t the only example of wasted money from incentives to businesses. In 2010, Fisker was allotted more than $20 million in taxpayer dollars, but went bankrupt three years later and left the plant empty. The company continues to operate in California today because that is where the talent to develop Fisker electric cars resides.

Jeffrey Dorfman, a professor of economics at The University of Georgia and consultant on economic issues to a variety of corporations and local governments put it best:

“When politicians give away six-figure sums of taxpayer money to attract a new employer, don’t think of it as an investment in the local economy. It is better thought of as a vote-buying scheme funded not with campaign contributions but with taxpayer dollars.”

The new Delaware Prosperity Partnership (DPP) offers some hope, utilizing research and data analysis, as well as promotion of the state’s innovation, business, and economic development to encourage entrepreneurship in the First State. However, with the steady stream of bad business legislation out of Dover, it is unlikely that great companies will want to establish in Delaware, no matter the incentive.

To attract and retain businesses, we must improve our business climate, tax rates, regulations, and talent pool. It’s simple: great things require the right environment to grow.

Real Estate Transfer Tax: State’s Way of Transferring its Financial Burden

A 1% increase in Delaware’s real estate transfer tax in 2017 brought the rate to 4%, worrying realtors in the state. The increase placed a burden on both buyers and sellers, who equally split the tax at closing.

Sellers lost dually with this legislation, facing a harder sell and receiving less profit at closing by having to cover the other half of the transfer tax. Buyers lost too, now having to save thousands more to cover the tax alone. As if a down payment on a home wasn’t a big expense already.

So, who won with the 1% increase?

It should come as no surprise to most that Delaware State Government is the sole winner in the deal, with the extra revenue going directly into the General Fund. The measure was enacted to combat the 2017 budget shortfall, to the detriment of realtors and homebuyers.

Bruce Plummer, president of the Delaware Association of Realtors, said “We know for a fact that home ownership builds strong communities,” with “better school systems, better health, higher volunteerism rates and lower crime rates.”

The legislature disregarded Delawareans when making a decision that impacted their ability to move from renting to owning a home—a big step for many. Realtors, businesses, and communities all lost with legislation that halted more homeownership. Those looking to move to the state were given a reason to reconsider.

When it came to the concern over the increase, Plummer asserted, “We’re not just trying to protect the industry, we’re trying to protect the home owner and Delaware’s private property rights.”

So are we. The real issue boils down to when our legislators will fight for these protections as well.

Unfortunately, this is yet another example of the General Assembly putting itself above residents and businesses. Delaware cannot continue to push key industries aside in favor of funding its bloated spending.

JPMorgan Chase announces $4 million investment in collaborative effort to revitalize ‘left behind’ Wilmington neighborhoods

From Delaware Business Now

JPMorgan Chase & Co. announced a $4 million, three-year investment in Equitable Wilmington, a collaborative aimed at promoting growth in Wilmington’s West, East and Northeast neighborhoods.

The collaborative includes Cinnaire Lending Corporation, True Access Capital and NCALL Loan Fund and will use the funds to support affordable housing development, small businesses and community facilities while addressing social determinants of health—including access to healthy foods, and health care facilities—through partnerships with the healthcare sector.

“We’re very proud to make this investment in Wilmington, a community that’s so important to JPMorgan Chase,” said Tom Horne, JPMorgan Chase market director for Delaware. “This city has been making meaningful progress but we know there’s still a lot of work to be done. We want to show up in a big way to help address the challenges and we’re excited about the great work that this collaborative will do.”

“We have worked hard in Delaware to support new affordable housing and small business development, and these investments in Equitable Wilmington will build on progress we’re seeing across our city,” said Gov. John Carney. “This is the kind of collaboration that can create real positive change in Delaware communities, and I want to thank everyone involved for their commitment to the City of Wilmington.”

 

Read more:

https://delawarebusinessnow.com/2019/10/jpmorgan-chase-announces-4-million-investment-in-collaborative-effort-to-revitalize-left-behind-wilmington-neighborhoods/

21 Delaware employees made more than 200K last year — none were the governor

From the News Journal

Twenty-one people who work for Delaware state government made more than $200,000 in 2018, and at least 13 are on track to make a similar amount this year.

Mark Brainard, president of Delaware Technical Community College, tops the list, according to a database of state employee salaries provided by the state Office of Management and Budget.

Brainard, who topped last year’s list, earned $266,540 in 2018. He made a base salary of $245,000 along with $20,585 listed as “other” earnings, according to the state budget office data.

Delaware state employees can make “other” earnings in more than 140 ways, ranging from stipends, health care cost supplements, coaching a school sports teams or serving on the state police scuba diving unit.

Brainard could end up making an even bigger paycheck in 2019, since his salary has been bumped to $249,900 this year. He’s still making less than his predecessor Orlando George, who collected a nearly $371,000 in salary when he retired in 2014.

More than half of the employees who topped the list worked for the health and homeland security departments last year. That includes police, nurses, psychiatrists and forensic examiners. The list also includes a couple of New Castle County school superintendents.

 

Read more:

https://www.delawareonline.com/story/news/politics/2019/10/30/these-delaware-employees-made-more-than-200-k-last-year-none-were-governor/4020677002/

Pharma start-up gets state grant; plans call for hiring up to 49 biotech positions

From Delaware Business Now

Prelude Therapeutics, a privately-held, clinical-stage biopharmaceutical company, plans to add up to 49 biotech positions by 2022 and invest $5 million in expanded lab and office space in the Wilmington area.

Prelude conducts research focused on key drivers of cancer cell growth, survival, and resistance. The company has two clinical trials in progress, with more pre-clinical development candidates in the pipeline.

The company is outgrowing its current locations, split between the Delaware Innovation Space (located on the site of the former DuPont Experimental Station) in Wilmington and nearby overflow office space.

The Delaware Council on Development Finance (CDF) recently approved Prelude for a Performance Grant of $684,090 and a Capital Expenditure grant of $150,000 for a total of up to $834,090. Both would come from the Delaware Strategic Fund and both are contingent on Prelude meeting its hiring goals.

The Delaware Development Partnership assisted Prelude.

With the additional jobs, Prelude’s team will expand to a projected total of 81 employees by 2022. The new positions include professional scientists and skilled associates and will add approximately $5.5 million to its annual payroll.

Prelude began operations in 2016 with a handful of employees and has now grown to 32 people. The company has raised $95 million in funding for its work.

 

Read more:

https://delawarebusinessnow.com/2019/10/pharma-start-up-gets-state-grant-plans-call-for-hiring-up-to-49-biotech-positions/

Gov. Carney’s office won’t say whether Paradee sister did legal review for DE Turf bill

From the News Journal

Gov. John Carney’s office would not comment Monday whether Jacqueline Mette, deputy legal counsel to the governor and Sen. Trey Paradee’s sister, conducted the legal review for her brother’s controversial DE Turf hotel tax bill.

Mette serves on Carney’s four-person legal team that reviews all bills passed by the General Assembly before the governor considers them.

The hotel tax bill, should Kent County officials approve it, could benefit a proposed development championed by John Paradee, brother of Trey Paradee and Mette.

John Paradee also sits on the board of DE Turf, a private sports complex near Frederica that would receive all of the tax revenue, estimated to be about $1 million a year.

Trey Paradee, a Dover-area state senator, sponsored the bill, which was pushed through the Legislature during its final hours in June.

More than half of legislators who voted in favor of the bill and responded to Delaware Online/The News Journal said they would have reconsidered their yes vote had they known of the potential conflict. Many others said they would have pressed for more details.

 

Read more:

https://www.delawareonline.com/story/news/politics/2019/10/28/gov-carneys-office-wont-say-whether-paradee-sister-did-legal-review-de-turf-bill/2483634001/

Transparency and Accountability: the “Delaware Way” can do Better

Delaware state government tends to minimize or even diminish the role of the citizen in decision-making, to the detriment of its constituency. Without transparency and accountability to influence better decisions, our officials are free to pass legislation to their own benefit, instead of that of its people.

The transparency issue with Delaware state government has been clear each time a bill is held until the last minute, or rules are suspended to bring forward a bill that was not on the agenda. Information is frequently withheld from constituents and stakeholders.

When the rules were suspended at two thirty in the morning on the final day of session to pass a bill, or when an important bill gets redrafted the night before a vote and the related agencies do not even get a chance to read it, transparency and accountability are abandoned at the door.

Our elected officials essentially halt proper governance when they do not show up to a hearing on a controversial bill, when decoy amendments are released to distract or deter from a bill change, or when a mid-session caucus wastes hours of participant time. Our legislators aren’t always transparent with each other, hiding key information and conflicts of interest, making it difficult to be held accountable by their peers when the people can’t.

Voters need to speak out against legislation that is detrimental to their savings, communities, and businesses, but have to be abreast of upcoming bills to do so. Our legislators aren’t working for the people when the people have no idea what is going on.

In order to do better, our lawmakers must act better. As we approach the second half of the 150th General Assembly, it is important to advocate for change by advocating for transparency and accountability in our state government.