What’s New

Will Delaware’s certificate of need law fall in 2021?

From Delaware Business Times

DOVER – Opinions about Delaware’s requirements for certificates of need (CONs) for large medical expenses vary so much that at first glance some stakeholders don’t seem to be talking about the same issue.

Dr. Chris Casscells, policy director for the Caesar Rodney Institute, calls it “a blunt-force instrument that has been brutal to the price of health care in Delaware” and therefore should be eliminated.

“It never did its intended goal,” he said of the law.

Casscells wants the marketplace to judge, and noted that in the late 1990s, when the system was temporarily unfunded, multiple freestanding surgery centers were created.

Wayne A. Smith, CEO of the Delaware Healthcare Association (DHA), which represents hospitals and allied organizations, supports the intent of the regulatory process, but recommends operational changes involving quorums and staff experts.

And state Rep. Lyndon Yearick, a Kent County Republican, has changed his mind over the last five months to embrace the free market.

“If there’s a health care institution that’s willing to risk their capital and assets, I don’t know of any reasons why there should be any restrictions,” he said.

Certificates of need were put into the spotlight in 2019, when Bayhealth and Beebe Healthcare proposed emergency departments on U.S. Route 9 in Sussex County, within 10 miles of each other. The Delaware Health Resources Board, which hears applications for the projects and rules on their permissibility, denied Beebe’s application, while Bayhealth withdrew its application before a vote.

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U.S. Corrugated plans $80M Dover plant

From Delaware Business Times

DOVER — U.S. Corrugated plans to build an approximately $80 million corrugated cardboard box manufacturing plant near Dover while relocating its longstanding New Jersey operations to the First State.

With aims to break ground in November, the 497,000-square-foot “super plant” will be located on a 40-acre parcel between Camden and Dover, bordered by Route 15 and the POW/MIA Parkway. U.S. Corrugated founder and chairman of the board Dennis Mehiel envisions a facility featuring the latest in industry-leading technology.

It’s estimated that once U.S. Corrugated of Delaware is operational, it should bring around 150 jobs to the Dover area. Mehiel said that U.S. Corrugated will close its 35-year-old, full-line box plant in Newark, N.J., and plans to transfer operations to the new Dover plant by the end of 2021. Preliminary plans show the site at roughly 110 loading docks and potential to expand the building footprint somewhere down the line.

“We’ve had tremendous upgrades since we opened our New Jersey facility, and it’s been upgrading in leaps and bounds in the last 20 to 25 years,” Mehiel told the Delaware Business Times. “There’s substantial opportunity to grow in Dover to meet significant demands we will face in the next two to three years.”

Once the Dover manufacturing plant is fully operational, it would have the capacity to produce approximately 250% more boxes than the Newark facility and bring in $120 million in additional revenue per year, he said.

The project still has to clear the permitting process with state, county and city entities in the near future. Delaware Prosperity Partnership President and CEO Kurt Foreman noted that his office collaborates closely with Delaware and  Dover officials as well as the Kent Economic Partnership to help bring industrial and manufacturing operations to Central Delaware, and he is pleased to continue moving forward to potentially bring another company to the state’s capital. The DPP and its partners have been actively working with U.S. Corrugated of Delaware team since early 2020.

“We are excited to see the progress being made toward a possible facility in Dover, but several key steps remain to complete. DPP looks forward to sharing and celebrating the good news once everything is completed,” Foreman told DBT.

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State Labor Department announces extension of jobless benefits

From Delaware Business Now

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Goldman Sachs to expand consumer finance business to Wilmington’s Riverfront

From Delaware Online

Goldman Sachs’ expansion into retail lending is bringing a sliver of the investment bank’s operations into the credit card hot spot of Delaware.

Officials at the storied 150-year-old bank said they are securing a temporary lease for offices along the Wilmington Riverfront to house the company’s initial set of Delaware hires, estimated at 25 to 50 people.

The company plans to employ about 150 people in Wilmington at the end of next year, said Chantal Garcia, chief operating officer for Goldman Sachs’ Consumer Business.

Garcia declined to disclose the exact location of their initial office along the Riverfront, but noted it would be a small space. Later, the company will move to more expansive offices, she said.

“We have not yet determined … our long-term location, in part, because there are potential other businesses or partners within the firm that may be interested in co-locating with us,” Garcia said, noting that compliance operations might also expand into Delaware.

The news is certain to be welcomed by city and state officials, who have poured hundreds of millions of dollars over 25 years into a transformation of the Riverfront, once a declining industrial area.

While today it features modern offices, apartments and restaurants, the revitalization of the city’s overall core has been plagued in recent years by a roller coaster of restructuring within the financial services industry.

Last year, the British bank Barclays moved 500 Riverfront jobs to New Jersey.

In June, Delaware officials announced plans to give the bank $2.5 million in taxpayer grants to create another 300 jobs in Wilmington.

Garcia said Goldman Sachs last week began conversations with the state’s private economic development agency about potential incentives.

She said Goldman Sachs is committed to Delaware, whether or not it receives taxpayer grants. She noted the company already has extended offers to a portion of what will be its new Delaware workforce.

Goldman Sachs’ officials chose Delaware over locations in Texas, Utah and Illinois, Garcia said, because of the state’s substantial pool of finance workers, its relatively low cost of living and its proximity to the bank’s headquarters.

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Beebe drops plans for Milton campus

From Delaware Business Times

MILTON — Beebe Healthcare’s plans for a Milton campus were put on pause, as the development group tasked with constructing the building withdrew its application for the project last week.

Earlier this year, Phoenix RHCS Holdings announced a partnership with Beebe on a new campus, tentatively called the Jerry Ann McLamb Medical Pavilion, on 8 acres in downtown Milton. Early plans showed two 40,000-square-foot offices, one of which to be leased to Beebe and the other would have been used for complementary medical services.

In January, Beebe’s then-interim president and CEO Rick Schaffner told the Delaware State News that the Milton campus would provide primary care, walk-in care, as well as diagnostic imaging, laboratory services and rehabilitation services.

The office would have been Beebe’s most northern location, continuing a string of recent expansions through Sussex County. This spring, Beebe opened a freestanding emergency department and a cancer center at the Beebe South Coastal Health Campus. Construction work is underway at Beebe’s $124 million surgical hospital on Route 24 near Rehoboth Beach with a target opening in 2022.

The pavilion would have honored McLamb, a Milton native and a dedicated nurse that graduated from Beebe School of Nursing and spent most of her 50-year career at the southern Delaware health system. McLamb, who died in 2018, is the mother-in-law of Phoenix RHCS Holdings chief financial officer Chris Selzer.

The proposal would have also marked a first in Sussex for Phoenix RHCS Holdings, as it has previously developed medical offices in Southeastern Pennsylvania and New Castle County. Most notably, the company developed the Apex Medical Center with its memorable doctor’s bag sculpture in Christiana, according to a company representative.

All five parcels are owned by Lobolly, LLC,  the property management division of Draper Holdings, which owns the WBOC television station. Phoenix RHCS Holdings planned to buy the property from Lobolly, according to a Cape Gazette report, but the land has not changed hands as of Sept. 28.

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Pandemic forces small Delaware retailers to pivot to survive

From Delaware Business Times

Delaware’s downtown districts strived to rebrand themselves as the place for one-of-a-kind shopping and community experience, but the COVID-19 pandemic has forced dramatic change in the independent retail business model.

For decades, big box stores have been slowly taking market share from small businesses in designated commerce areas like Downtown Districts or Main Streets. Independent stores see less than a quarter of all retail shopping today compared to about half of sales in the 1980s, according to a study completed by the Institute for Local Self-Reliance. But gradually, Main Street Inc. programs and other grassroots efforts have led the way to preserve and revitalize historic commerce corridors.

Nationwide retail and restaurant spending totaled $526.1 billion in August, an increase of 0.6% from the previous month, according to the U.S. Department of Commerce. Spending has been steadily growing over the past four months, but that may falter now that extra federal unemployment benefits have lessened. Clothing and accessory sales skyrocketed 105% in June versus May, when shutdown orders were starting to lift, but now customers have tightened their purse strings again.

Through the pandemic, big-box stores stood to profit more than smaller, independent stores. Giants like Walmart and Target that offer groceries remained open for one-stop shopping in the early days of the crisis while Main Street businesses were not categorized as essential services.

“I hate to see a small business close,” said Jenn Marsh, the owner of Stubborn Soul Boutique in Middletown. “It’s a scary time for sure, and with the overhead with brick and mortar, sometimes I wonder if we would have made it this far. The challenge with Amazon and Walmart is that we’re not them, and we’ll never be them. We have to find another way.”

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University of Delaware announces layoffs, other measures as budget deficit grows

From Delaware Online

The University of Delaware said it is facing a budget deficit of about $250 million this year, as significant revenue loss and increased expenses from the COVID-19 pandemic strain the university’s finances.

On Thursday, the university announced another round of cost-saving measures that included layoffs, a voluntary retirement program and voluntary staff hour reductions.

There will also be unpaid leave and temporary reductions to retirement contributions.

Thursday’s round of cuts apply to university staff members only, not faculty members. UD administrators have begun talks with the faculty union. Those negotiations will be dependent on how many staff members choose to take the voluntary retirement or reduced hours, university spokesperson Andrea Boyle Tippett said.

Staff who choose the voluntary retirement option must notify the university by Oct. 5. The incentive payment would equal five months of base salary, plus payment for any unused vacation days.

“Given that we will have eliminated almost all discretionary expenses for this year, we have no choice but to turn to personnel actions,” Assanis said in a letter to faculty and staff on Thursday.

Campus departments are also being asked to scale back spending. Non-academic units are being asked to cut budgets by 25% to 35%, while academic units must cut by 15% in an effort to “preserve the academic core of the institution,” Boyle Tippett said.

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New project at former paint factory near Cheswold expected to bring 130 jobs

From Delaware Online

A 173,000-square-foot former paint manufacturing plant near Cheswold is seeing new life and new jobs thanks to a joint effort of the Kent Economic Partnership, the state and Kent County.

The building at 1886 Lynnbury Woods Road was purchased for $4.25 million, part of a total investment of $17.2 million to develop manufacturing and warehouse jobs at the site.

Nephi, Utah-based National Vinyl Products is an extruder of PVC fence and rail products sold across North America. This new state-of-the-art extrusion plant will employ 80 workers as equipment operators, quality control and plant/equipment maintenance personnel while allowing the company access to customers across the Eastern U.S.

USA Fulfillment Services, a Chestertown, Maryland-based logistics company, is leasing space at the building and will use it for warehousing. It will employ between 30 and 40 workers, bringing the total number of people working at the building to as many as 130.

Formerly occupied by PPG, the building has been vacant since 2019 when the company closed its paint factory there.

“This is a real win for Delaware and for Kent County,” Gov. John Carney said. “This brings back to the area many of what I call the ‘new old’ jobs that for years have helped Delaware families put food on the table, pay the mortgage and send their kids to college.”

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Stimulus checks, jobless benefits not reviving the hospitality sector

From Delaware Business Now

Recent releases from the office of the Delaware State Treasurer and the Delaware Department of Labor contain some eyepopping numbers.

So far, the combination of the stimulus checks and jobless benefits since the Covid-19 pandemic took hold in mid-March totals $1.7 billion or more than $1,700 for every man, woman, and child in the state.

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