Author: Delaware Prosperity Partnership

These Sites No Longer Make Goods. Now They’ll Get Them to You Faster.

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These Sites No Longer Make Goods. Now They’ll Get Them to You Faster.

18 SEPTEMBER, 2018

As the United States economy continues its shift away from manufacturing, locations that once housed industries such as automobiles or chemicals are being remade as distribution hubs for the millions of items bought by consumers online.

Developers are trying to meet growing demand by modifying industrial buildings to meet the requirements of the logistics business or, more likely, demolishing them to make way for facilities built for the distribution industry. These sites offer many benefits ideal for distribution, including easy access to highways, ports and rail links and a proximity to major markets.

“Logistics and fulfillment is really the segment of the industrial world that has backfilled the void that manufacturing has left in terms of employment and economic activity,” said Thomas J. Hanna, president of Harvey Hanna & Associates, which plans to tear down a former General Motors assembly plant at Newport, Del., to create a three-million-square-foot complex for distribution companies.

Plans are in place to redevelop other former manufacturing sites across the nation, including a former plastics factory in Piscataway, N.J., and an old Ford plant in Lorain, Ohio.

E-commerce is driving strong growth in demand for industrial sites, according to a report from Newmark Knight Frank, a global commercial real estate company. “As consumers across economic and demographic spectrums continue to demand more rapid product delivery, developers have had to innovate their product and offer more highly efficient space in the largest urban markets,” the report said.

In coming weeks, crews in Delaware will begin to raze G.M.’s giant Boxwood Road factory, which was built in 1945 and once employed as many as 8,000 people but has been empty since the automaker’s bankruptcy in 2009. A $250 million project will replace it with four dividable buildings designed for the logistics industry, including a 40-foot-high ceiling and 600 feet between truck entry and exit points.

Fisker Automotive had planned to revive the plant by making luxury cars there before it went bankrupt in 2013, and demolition was not the first option for Mr. Hanna, a Newport native with ties to the 142-acre site. His father worked there as a plant engineer, and his uncle, who is now his business partner, had summer jobs mowing lawns as a teenager.

Mr. Hanna wanted to reconfigure the factory for today’s manufacturers, but after a year of trying, he was unable to generate enough interest. He concluded that the costs of manufacturing in the United States, especially the Northeast, were too high to find enough tenants to fill the plant’s 1.1 million square feet.

“Manufacturing is not entirely dead, but it’s nowhere near as robust as it once was in terms of our economy,” Mr. Hanna said during a tour of the building.

Despite a rebound from the depth of the recession, the United States has lost about 640,000 manufacturing jobs over the last decade, with data showing 12.7 million in August, according to the Bureau of Labor Statistics.

Within an eight-hour drive of some 50 million inhabitants in the Northeast and Mid-Atlantic, and close to highways, rail and the soon-to-be upgraded Port of Wilmington, the site is well situated for the logistics industry.

“This plant has sat dormant for almost a decade, and it is time for it to be put back into a higher and better use,” Mr. Hanna said.

Developers of older industrial sites face risks, including the cost of demolition or refurbishment, environmental cleanup and the need to retain a local work force that can transfer its skills to logistics, said Robert J. Vodinelic, the national practice leader for industrial and logistics real estate at Newmark Knight Frank.

But many are willing to take them on because of the strong demand from the logistics industry, Mr. Vodinelic said.

“If they are able to buy these properties for a fraction of the replacement cost, then they can make the numbers work,” he said. “Even with the huge cost of building a manufacturing facility, new construction may end up being the best route.”

Older sites such as Boxwood Road are desirable because newly developed land is more likely to be farther from major consumer markets, Mr. Vodinelic said.

“In many markets, there is a lack of adequate development sites that have the proximity to employment base and highway access that a lot of these former manufacturing plants have,” he said.

The large size of older manufacturing sites also draws logistics companies, which now demand 600,000 to one million square feet, about twice the area they typically occupied 10 years ago, Mr. Vodinelic said.

In Piscataway, the Rockefeller Group, a commercial real estate developer, is remaking a 228-acre site once occupied by a Dow Chemical plastics factory, and building five structures totaling 2.1 million square feet primarily for the distribution industry.

The site, close to New York, the New Jersey Turnpike and Interstate 287, offers a rare opportunity, said Brandi Hanback, executive vice president for industrial development at Rockefeller. “It’s very unusual that a site of that size is available in New Jersey,” she said.

The first tenant, Best Buy, has set up a distribution center there, and interest from other companies has been strong enough to accelerate the construction schedule to three years from five, Ms. Hanback said.

In addition to the scarcity of land in northern and central New Jersey, she attributed the demand to the proximity of ports and the availability of labor for logistics companies.

“It’s a good microcosm of what’s happening in the industrial real estate market in general and especially in these gateway markets like northern New Jersey,” she said.

In Lorain, the site of the former Ford plant, which closed in 2006, is being used by distribution companies including Trademark Global and Comprehensive Logistics. Trademark Global receives, packs and ships consumer goods for internet retailers, and Comprehensive Logistics is a third-party provider for a Ford truck plant in Avon, Ohio.

The Industrial Realty Group, which specializes in the adaptive reuse of commercial real estate, demolished part of the 3.8-million-square-foot plant and improved facilities for future tenants in the remaining structure.

In Pontiac, Mich., Industrial Realty converted a former G.M. plant into a center for industrial and logistics companies including Fanuc America, a Japanese robotics company that uses 400,000 square feet of former office space for light assembly, warehousing and distribution.

In reusing such sites, logistics companies are positioning themselves geographically to serve a surging demand for same-day delivery of online purchases.

“Logistics is the fastest-growing segment within the real estate industry,” Mr. Hanna said. “Everyone is trying to figure out how to get their product to the consumer the fastest.”

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The Future of Transportation in the First State

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The future of transportation in the First State

28 AUGUST, 2018

How we’ll roll: Trains, Planes and Driverless Cars

Transportation planners and experts are careful about predicting how Delawareans will get around in 30 years, but they’re more certain about how they won’t. Many argue that building more roads, highways and parking lots is a trend in need of reversal.

“Building new roads is not where the country is,” said Jennifer Cohan, secretary of the Delaware Department of Transportation. “We are not building our way out of traffic congestion.”

“If everyone continues to drive their own car, we’ll have problems,” said Bill Swiatek, a principal planner at the Wilmington Area Planning Council, or WILMAPCO, a planning group that coordinates transportation spending. “We have to convince people that roads are finite resources.”

But the gulf between what planners say the state needs and what residents want is wider than ever.

Instead of choosing transit-accessible Wilmington, about half of household growth until 2040 will take place in suburbs along the I-95 corridor, WILMAPCO predicts.

As a result, WILMAPCO projects that 61 percent of transportation spending on new projects in New Castle County over the next two decades will go to eight major roadways south of U.S. 40.

Non-road projects, such as the extension of commuter rail in Maryland from Perryville to Elkton, and major work on a trail linking Wilmington to New Castle, are in the works as well, but most funding will continue to pay for road improvements and construction.

Meanwhile, transit ridership is declining. Delawareans are buying more cars than ever, and Census data shows that more people are choosing to drive alone. Even carpooling has seen major declines since the 1980s.

Whether and how Delaware can reverse this cycle of sprawl and infrastructure spending will be a central question for its business community. Though businesses tend to be agnostic on the question of how people get around, ensuring access to workers, goods and markets is essential, said Kurt Foreman, executive director of the Delaware Prosperity Partnership.

Major questions remain on how to pay for it all. Delaware’s trust fund is projected to grow at an annualized rate of 1.4 percent through 2023. If people buy fewer high-mileage cars, the state will stumble toward a crisis. Another approach, paying by the mile, is unpopular for now but seeing a concerted push from policy experts.

Here is a look at some of the transportation projects and trends coming to Delaware and what they could mean for the state in the years, and even decades, to come.

Infill and redevelopment

As a home to one of the first north-south roads through the Thirteen Colonies, and Native American trails before that, Claymont has long been tied to its infrastructure, said Brett Saddler, a resident who leads a public-private nonprofit called the Claymont Renaissance Development Corp.

Today, that means a connection to mass transit, but the current rail station is “nothing more than a glorified bus shelter,” Saddler said.

In 2013, the closure of Claymont Steel hit the community hard, but the 425-acre site presented an opportunity. A new station is slated to open by the end of 2020. The station serves about 1,200 weekday commuters.

Nearby businesses stand to benefit, too.

“Tri-State Mall is licking their chops,” he said.

What’s happening in Claymont is a good example of what planners call “infill” development, which targets vacant or under-used land within existing communities. It takes advantage of existing infrastructure and avoids sprawl, but it’s often more expensive than building on a blank slate.

In other words, it’s an uphill battle. While greenfield development happens naturally in some places, infill often requires government help.

“I have no doubt that if we and the community did not lobby for the investment, we wouldn’t be looking at what’s potentially going to happen there now,” Saddler said.

Road diets and bottom-up outreach

On DelDOT’s long-range planning website, called “Innovation in Motion,” the department compares two roads: A typical four-lane city street and the road of the future, a two-lane road with dedicated bus and bicycling lanes. Owner-occupied cars are still on the stage of these future roads, but they’re moved to a supporting role.

For an example of how these transformations, often called “road diets,” look, consider Newark’s experience with Cleveland Avenue, a busy four-lane road lined with car dealerships.

A 2001 attempt to put Cleveland on a diet went nowhere, as businesses along the 1.1-mile project route objected to slimming the road to two lanes. So the plan was put on the shelf.

Then it was dusted off in 2015, when the city and state, spurred by accident data showing that Cleveland was a particularly dangerous stretch of road, took another shot at the project. This time, they recruited businesses and other interests in the area to a task force, allowing them to join the process.

During one site visit, Acting City Manager Tom Coleman remembers watching families push strollers across four lanes of traffic.

“I thought, ‘If we don’t do something, someone’s going to get killed out here,’” he said.

After this summer’s project, Cleveland Avenue will be two lanes in each direction, with a center turn lane where needed. There are also bike lanes in each direction and pedestrian “refuge islands” in the middle to make it easier to cross on foot.

Road diets will likely be a bigger part of Delaware’s transportation network over the coming decades, according to Coleman. His advice is to engage a wide mix of interests early on.

“I think you’re going to have trouble with a top-down approach to implementing these just because [removing driving lanes] can be so counterintuitive,” he said.

Making transit ‘sexy’

An estimated 17 percent of people in the area depend on transit, but many view it with skepticism, said Dave Gula, a principal planner at WILMAPCO.

But if the future is going to become more transit-oriented, planners say bus travel will have to appeal to people who don’t have to take it.

“What you’re seeing us focus on now is trying to make transit sexy,” said Cohan, the DelDOT leader. That means adding amenities like free wireless internet and phone-charging stations.

Delaware bus riders can now track the location of their bus in real-time and pay via mobile app for summer beach buses. Adults older than 65 were the top downloaders for the beach bus app, Cohan said.

Allowing older adults to remain independent even if they can’t drive — along with young people who prefer not to —is an important part of transit’s role, said Heather Dunigan, also a principal planner at WILMAPCO.

But the viability of transit is limited by sprawl; the farther buses have to travel, the longer routes become, and the more transfers are necessary.

“The disconnect between land-use planning and transportation infrastructure has been part of the uphill battle,” Cohan said. “Of course, more development is great, but if transportation infrastructure doesn’t keep pace, you end up with a situation like you see at the beach.”

Getting dense

In 1920, three out of every four New Castle County residents lived in Wilmington. Today, about one in eight do. As the car made it possible to live farther afield, infrastructure spending struggled to catch up.

“A lot of New Castle County was built in a way that will never pay for itself,” Coleman said. Expanding roads simply leads to more demand for housing, more drivers and eventually more demand for roads.

A 2014 WILMAPCO survey found that 71 percent of respondents thought development should occur in existing towns and growth areas, while only 29 percent thought it should happen where developers choose.

But restrictions on property rights are a tough sell in America. Foreman noted that the term “sprawl” has negative connotations that presuppose “there’s something wrong with people developing their land where they’d like to.”

That said, Foreman said the transition toward denser spaces won’t need to be led by regulators. Instead, as people demand different places, developers will respond.

“They’re thinking about the quality of place now, and what value proposition that a resident of their community gets, whether it’s a riverfront or a ballpark or a walking trail,” he said.

A self-driven future

Generally, experts talk about self-driving or autonomous vehicles on a continuum, with Level 0 being entirely driver-controlled and Level 5 being entirely automated, with no steering wheel, pedals or breaks. Vehicles from Levels 1 through 4 have varying levels of automation, but a driver needs to take the wheel in certain situations.

Level 2 vehicles, which can brake, steer and accelerate on their own but need a driver, are already on the road. How long before we see a Level 5 vehicle — and the full promise of driverless vehicles — is not yet clear, said Ken Grant, public and government affairs manager for AAA Mid-Atlantic.

“I think it’s coming faster than most people would expect,” he said. “Does that mean next year? No. Within 10 years? Maybe. Within 20 years? Probably.”

Imagine a car that is competent enough to drive itself, but still needs a human driver to step in every once in a while. Expecting drivers to react quickly, especially when a car can drive itself most of the time, may be too much to expect.

“That’s kind of dicey,” Grant said of these Level 3 and 4 vehicles. “That’s one area of transition that’s going to be tricky.”

For this reason, some automakers, including Ford, have said they intend to skip over this level.

Technology, though, tends to change more quickly than behavior. It’s one thing to pick up an iPhone and another to change how you get to work every day. Even when self-driving cars are common, will ride-sharing follow suit?

DelDOT has asked the University of Delaware to investigate the state’s readiness for autonomous vehicles. The university’s April 2017 report is largely positive, suggesting the state already has an extensive telecom network and is planning new efforts to prepare the state for driverless vehicles.

Still, long-distance commutes are likely to increase, triggering more sprawl and environmental degradation, said Philip Barnes, a co-author of the report and an associate policy scientist in UD’s Institute for Public Administration.

“The real, real question here is how’re we going to pay for all this,” he said. “This is not going to be cheap.”

Paying by the mile

As drivers move to more fuel-efficient vehicles, hybrids and electrics, they save gas money but cut down on the Delaware’s 23-cents-a-gallon gas tax.

Delaware is one of many states part of a “huge policy discussion around implementation of mileage-based user fee,” said Barnes of UD.

Grant, with AAA, is a part of DelDOT’s trial run to charge residents based on how many miles they drive instead of how much gas they use. At the end of the month, the device tells him how many miles in each state he drove and receives an informational “bill” (the pilot is not actually collecting money) that deducts the gas taxes he paid.

“It doesn’t say exactly how many trips I’ve taken to Dunkin Donuts, which I’m glad of because my wife doesn’t get to see that,” Grant said, joking.

A 2018 WILMAPCO survey found that 74 percent of residents of Cecil and New Castle counties did not support paying by the mile.

Cohan said there are two major misunderstandings about a mileage-based fee. First, people think their location is being tracked in real time, though the state merely collects information once a month. Second, people think the tax will be in addition to the gas tax, rather than instead of it.

Robert Perkins, a Wilmington business executive who leads the Delaware Business Roundtable, said it’s too early to tell whether the mileage-based tax is the right answer.

“I think most people believe the gas tax is an equitable way to fund transportation, but it’s very wise for the state to look at other ways to pay for infrastructure needs,” he said.

Barnes thinks most people will support a mileage-based fee if it’s explained clearly to them, but there is always a Plan B.

“When our potholes don’t get filled, when bridges crumble,” he said, people will take notice.

That said, predictions about new taxes or automated vehicles should be taken with skepticism, Barnes said. “It’s crystal ball gazing and anyone who says they know for certain is not being honest with themselves.”

Regardless of whether drivers can be persuaded to adopt new ways of getting around, Foreman, the business leader, said there will be opportunities.

“What I like about Delaware is that we’re small enough that I don’t think the solutions will daunt us,” he said. “Our small scale gives us connectedness and an ability to dialogue that bodes well for our future.”

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Top Trending: INC 5000 List Includes 12 Delaware Companies

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Top Trending: INC 5000 List Includes 12 Delaware Companies

23 AUGUST, 2018

A dozen companies in Delaware made the annual INC 5000 list of the nation’s fastest growing small companies.

The closely watched list ranks companies based on their three-year sales performance. The list was expanded to 5,000 companies from 500 several years ago by the small business magazine and website.

HomeStar Remodeling, Wilmington, topped the list at No. 53. The company posted $5.3 million in annual sales was the top-ranked construction company on the entire INC 5000 and was listed as the fastest growing company in the Philadelphia region.

According to INC, companies must be U.S.-based, privately held, for-profit, and independent – not subsidiaries or divisions of other companies — as of December 31, 2017.

The list features a high turnover of companies in Delaware and elsewhere year to year. Many fast-growing companies are acquired by competitors and a few move on to become publicly traded corporations.

Other small companies ranked by growth were:

  • 418: TECSPLUS, Newark, Information technology, $3.3 million.
  • 583: Empire Flippers, Wilmington, sales of online enterprises, $16.5 million.
  • 604: Extreme Scale Solutions, Newark, information technology, $16.5 million.
  • 864: Shipsound, Wilmington, online retail, $4.2 million.
  • 2, 060: Placers, Newark, human resources, Newark, $9.3 million.
  • 2,325: Tangentia, Wilmington, information technology, $2.1 million.
  • 2,363: Careerminds, Wilmington, outplacement and related services, $2 million.
  • 2,697: Chesapeake Plumbing and Heating, Frankford, construction,$26.1 million.
  • 4,127: Karins and Associates, Newark, engineering services, $6.4 million.
  • 4,217: The Siegfried Group, Wilmington, accounting $177 million.
  • 4,863: Biomedical Research Laboratories, Wilmington, Food and Beverage $4.9 million.

Click here to explore the 2018 list.

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Christiana Care Listed by U.S. News as ‘Best Hospital’

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Christiana Care listed by U.S. News as ‘Best Hospital’

16 AUGUST, 2018

For the third year in a row, Christiana Care Health System has been rated a Best Hospital by U.S. News & World Report.

Out of more than 4,500 hospitals in the U.S., New Castle-based Christiana Care was one of only 29 to achieve the highest ratings in every common condition or procedure.

Christiana Care was also recognized as the best hospital in Delaware and was ranked No. 3 among the 90-plus hospitals in the Philadelphia region, a release stated.

“At Christiana Care, we serve together to make a positive impact on the health of our community,” said Janice E. Nevin, Christiana Care president CEO. “That impact starts with the high-quality, safe care that we provide in our hospitals. This recognition by U.S. News & World Report affirms that we’re exceptional today—and we remain committed to do all that we can to be even better tomorrow.”

The conditions and procedures ranked are:

  • Colon cancer surgery
  • Lung cancer surgery
  • Chronic obstructive pulmonary disease
  • Heart failure
  • Heart bypass surgery
  • Aortic valve surgery
  • Abdominal aortic aneurysm repair
  • Knee replacement
  • Hip replacement

These procedures and surgeries represent a high level of achievement across the board and is a testament to our organization’s culture,” said Ken L. Silverstein, chief clinical officer and executive vice president at Christiana Care.

“We know that in order to deliver the very best care, doctors, nurses and other health care professionals need to be able to experience joy in their work,” he said. “We focus on supporting and partnering with our caregivers to create that positive experience.”

U.S. News & World Report measures procedure and condition ratings based on three elements: structures, the resources devoted to patient care; process, whether the practices that help patients are woven into hospital routine; and outcomes, the results of care as measured by five years of claims data and other sources.

It ranks hospitals in nine conditions and procedures as either high performing, average or below average. The procedures and conditions measured were selected based on patient volumes, the availability of comparison data and the presence of risk or complexity.

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Every Delawarean Deserves Access to High-Speed Internet

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Every Delawarean deserves access to high-speed internet

9 AUGUST, 2018

Applying for a job, or recruiting talented employees for your business. Taking a college course. Reading a book. Helping your kids with math homework.

More and more, these are tasks that Delawareans are completing online — to further their education, acquire new skills, and compete in an economy that is evolving every day.

My most important job as governor is to make sure that Delaware has a strong, growing, and competitive economy. That’s why it’s so important for us to expand access to high-speed broadband service across our state — especially in areas where service is spotty or unavailable today.

Over the next two years, working with partners in the private sector, we plan to eliminate broadband deserts and ensure that every Delaware citizen and business has access to high-speed broadband service.

Delaware has consistently been recognized for having among the fastest internet speeds in the country. Ensuring reliable access to the internet for even more Delawareans will help prepare our young people for the economy of the future, and it will help our existing workforce do their jobs even better.

Recently, during a tour of Delaware Electric Cooperative in Greenwood, we saw how important broadband access is to the delivery of electricity across Kent and Sussex counties.

One night at 11 p.m., Josh Wharton, a Delaware Electric Cooperative operations supervisor, received a call about a fire on another company’s power line. The company asked Josh to redirect power to 5,000 customers before their service was impacted. From his home in Gumboro, Josh used an iPad to keep the lights on for 5,000 Delawareans.

How was that possible? A high-speed, remote internet connection.

Businesses need to reach their customers, and so they set up shop in locations that enable them to communicate efficiently. High-speed broadband is critical for companies of all sizes, and it’s why we’re working to ensure businesses have access to quality internet service statewide.

We also heard from R.C. and Brent Willin of Willin Farms on how their fifth-generation family farm uses the internet to make adjustments to planting, monitor equipment, and manage business operations.

We want all of Delaware’s farms to have access to this type of technology. Expanding access to high-speed broadband is essential for Delaware’s agriculture sector to remain competitive.

Here’s how we plan to expand high-speed broadband access in Delaware: In August, we will release a request for proposals (RFP) to improve broadband availability in rural areas throughout Delaware by creating opportunity for the private sector to develop and offer that service wirelessly.

Through this RFP and subsequent partnerships, the State will enable wireless service to homes and businesses where broadband service is not readily available, particularly in rural Kent and Sussex counties.

Delaware will find ways to lower the cost of internet service for lower income families. If we want all Delaware families to have a shot at success, they need to be able to apply for a job and complete homework assignments – tasks that become incredibly complicated without access to the internet.

We’ll make it more attractive for private sector internet service providers to bring wireless coverage to Delaware by subsidizing capital costs through a rural broadband grant program, making it possible for providers to invest and develop in rural areas.

This is about increasing opportunity for all Delawareans — and making sure that no one in our state is left behind because they don’t have adequate access to technology.

We are building on earlier work across our state that has achieved results. Delaware has worked diligently to expand broadband access across the state for several years.

Delaware Chief Information Officer James Collins has worked with school district leaders to upgrade digital infrastructure and dramatically increase internet speeds in 48 schools statewide — many in areas that are under-served.

As part of an initiative through the Delaware Department of Technology and Information, a company called Bloosurf launched a pilot project in the City of Seaford, which offered free internet service to customers within 8 miles of wireless access points throughout the city.

That helped Delawareans like Kim Hopkins, a Seaford teacher, who previously had trouble grading papers, preparing lesson plans, and helping her children with their homework because of a slow, spotty internet connection.

The State of Delaware made an initial public investment in increasing our digital infrastructure, which has led to over $30 million in private investment. As a result, we have 700 miles of fiber broadband lines bringing high-speed internet to homes, businesses, and schools statewide.

Delaware’s broadband “backbone” features high capacity fiber-optic lines that run the length of the state from Wilmington to Georgetown, and from Seaford to Lewes, improving internet reliability for consumers and increasing internet access speeds by as much as 10 times since 2009.

Thanks in large part to these efforts, Delaware continuously ranks at, or near, the top of broadband speed rankings across the nation. Yet, we still face the same challenges as many other states when it comes to access and affordability, especially in our rural areas where broadband deserts still exist.

Over the next two years, we will directly confront this issue, eliminate those deserts, and make high-speed internet a reality for all Delawareans. That will help all Delawareans connect and compete in a new economy, and improve economic opportunity across our state.

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Ashland Moving Corporate Headquarters to Delaware by 2020

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Ashland moving corporate headquarters to Delaware by 2020

3 AUGUST, 2018

Ashland Inc.’s announcement that it is moving its headquarters and less than 100 jobs to Delaware marks an investment in a state where the company has had a convoluted and, at times, controversial history.

The new headquarters will be located at 500 Hercules Road in Brandywine Springs, where the company already has an office campus with about 235 workers. The move is expected to happen by Jan. 1 2020.

“Ashland has a long history of innovation and success, including right here in Delaware,” Gov. John Carney said via email. “We’re thrilled they have selected Delaware for their corporate headquarters. This is additional proof that Delaware remains a great place for companies of any size to put down roots, grow, and create jobs.”

The move to Delaware will follow a corporate downsizing at the 94-year-old company that recently fell out of the Fortune 500.

Ashland says it will be “significantly downsizing” its current headquarters in Covington, Kentucky, in advance of the relocation with some of the 48 jobs there being eliminated and others being moved to its facility in Dublin, Ohio.

The remainder will be brought to Delaware, along with employees from its offices in Lexington, Kentucky. About 58 people work at that office, although some of those jobs also will be eliminated or relocated to Dublin, while other employees will be asked to work remotely.

The downsizing is part of a plan Ashland CEO William Wulfsohn announced in May to cut $120 million in expenses. Workers at the two Kentucky offices affected by the move were told of the downsizing on Tuesday.

Ashland saw its stock price jump to a 10-year high of $85.60 per share after the announcement, which coincided with a third-quarter earnings report that showed sales up 12 percent and a $66 million positive swing in net revenue compared to last year.

Founded in Kentucky 94 years ago, Ashland first became a household name here when the company purchased former Hercules Inc. for $3.3 billion in 2008.

Hercules was broken out of the DuPont Co. and once employed 1,800 people at the global headquarters it built in downtown Wilmington. But the company began to falter in the early 2000s after a series of questionable business decisions, leading to its eventual sale.

Ashland later moved its new acquisition out of the city, leaving 125,600 square feet of space vacant in Wilmington’s Hercules Plaza.

Despite the move, Delaware agreed in 2012 to provide Ashland with $10 million worth of taxpayer grants in exchange for the company’s promise to add 300 jobs in five years, bringing its total local workforce to more than 800. The deal was one of the largest economic development incentive packages approved under former Gov. Jack Markell.

But just two years later, Ashland sold its Delaware-based water technologies business to a private investment firm, which renamed the new standalone company Solenis. That business is now headquartered at the 21st Century Plaza in Brandywine Hundred.

The remaining company failed to reach its hiring goal and in 2015 was forced to repay nearly $335,000 of the state grant money it had received up to that point.

The same year, the now-defunct Delaware Economic Development Office helped Solenis win a $1.1 million taxpayer grant to help the company add 122 additional jobs by 2017 – a deal that would have brought its total Delaware workforce to 336. The company exceeded that goal by 31 jobs, state officials said Thursday.

No financial incentives have been offered to Ashland in connection with its impending move to New Castle County, according to the Delaware Prosperity Partnership.

The DPP was created by the General Assembly last summer when DEDO was dissolved and its responsibilities split between the new public-private partnership and the Division of Small Business.

Ashland’s impending relocation marks the first major accomplishment for the new organization since its new CEO Kurt Foreman took the helm in April.

“There wasn’t a lot of selling involved because they already were familiar with Delaware,” Foreman said. “It was more about being ready with the information they were looking for to help them make their decision.”

While Foreman said he is happy to have helped Ashland, he stressed that attracting new companies will not be the sole focus of the partnership.

“We want that to be only one part of our strategy,” he said. “There is nothing better than for those companies we want to bring here to see existing companies in the state grow and thrive. That’s a big part of where our focus is.”

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Rural Lower Delaware Promised High-Speed Internet by 2020

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Rural lower Delaware promised high-speed internet by 2020

27 JULY, 2018

The Carney administration is taking a major step forward in a longstanding push to extend high-speed internet access to rural communities in downstate Delaware.

The governor on Tuesday announced he is issuing a call for help from any service provider willing to assist in closing the gap by 2020 — an effort backed by $1.3 million in taxpayer assistance.

“My most important job as governor is to make sure that Delaware has a strong, growing and competitive economy,” Gov. John Carney said. “Working with the private sector over the next two years, we expect to eliminate broadband deserts and ensure that every Delaware citizen and business has access to high-speed broadband service.”

Delaware has consistently been ranked as having some of the fastest internet speeds in the nation so as long as users live in New Castle County or major populations centers in Kent and Sussex.

Rural areas of the state, particularly below the Chesapeake and Delaware Canal, have been largely left out of the broadband revolution, due to the high cost of extending fiber optic cable and wireless services to relatively small numbers of customers.

That means residential customers in areas like Greenwood and Dagsboro struggle to binge watch the hottest series on Netflix, Hulu or Amazon.

But it also has serious consequences when it comes to economic development, health care and education.

“It’s hard to imagine any child doing their homework these days without a fast and reliable internet connection,” said James Collins, who runs the state Department of Technology and Information.

One solution to Sussex County’s limited number of family doctors and specialists has been to expand telemedicine, which allows doctors to treat patients remotely through streaming video connections. But the lack of broadband in rural communities means those who could most benefit from telemedicine cannot benefit.

Farmers like R.C. Willin increasingly rely on the internet to guide their tractors, monitor their yield and gauge soil conditions in the field. The 1,400-acre Willin Farms outside Seaford currently uses a Maryland internet provider to upload that data to the cloud and share the information across devices.

“Maryland is way ahead of Delaware,” he said. “It would cost me about $56,000 just to have Comcast bring its internet from my brother’s house down the street to here and then we would be spending $4,000 to $5,000 a month just to get the pipeline we need to use all of our internet-enabled equipment.”

The lack of high-speed connections also is hampering Kent and Sussex counties’ ability to attract new businesses, Collins said.

Carney chose to make his announcement in Seaford, a once thriving town that has struggled to attract major employers since DuPont Co.’s former nylon plant was sold to Invista in 2003. The facility that once provided high-paying jobs to nearly 5,000 workers today employs about 100.

The governor recently signed a bill that many say hampered Seaford’s efforts to attract new companies by limiting the role of organized labor.

But he praised the town’s work with Bloosurf, a Salisbury, Maryland-based company that is providing wireless broadband service to about three dozen customers throughout the town thanks to a state pilot program.

Kim Hopkins, who teaches nursing at Delaware Technical Community College and serves on the Seaford school board, said joining the pilot program made a big difference in her quality of life.

“Before there would be times when I had to grade papers at 2 a.m. and the internet would be so spotty that I would have to go to my mom’s house to finish,” she said. “Now I can grade papers, my one son can watch his Youtube videos, the older boys can play Nintendo while my husband is doing assignments for his school work. It’s a beautiful thing.”

The state is now hoping to use taxpayer dollars as an incentive to encourage other companies to provide similar services.

“The issue is the populations of these rural areas are not dense enough with potential subscribers to offset the capital costs involved for most of these for-profit companies,” Collins said. “Our goal is to provide some financial assistance to make that work more attractive.”

Most of the groundwork has already been accomplished. Under former Gov. Jack Markell, the state provided $1.5 million to a company now called Crown Castle to extend a backbone of fiber optic cable from Wilmington to Georgetown and then from Lewes to Seaford.

That allowed the state to add high-speed internet at 48 public schools and numerous public libraries. The Delaware Electric Cooperative has used that backbone to connect 26 substations across Kent and Sussex.

Now the state is planning to use more than $2 million to subsidize the efforts of private companies to further extend that reach from those lines to neighborhoods, businesses and individual homes.

The rural broadband grant program will rely on about $720,000 in fees previously collected from telecommunication companies and another $1.3 million in taxpayer dollars recently allocated by the General Assembly.

Those funds are in addition to the $1.2 million that Sussex County Council recently earmarked for expanding broadband access, including money to help offset the rental costs on state-owned towers.

“It’s taken a lot of partnerships and collaborations to get us to this point,” Collins said. “And today’s announcement will take us a long way to finally reaching our goal.”

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New Businesses, Expanding Arts: the Milton Renaissance

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New businesses, expanding arts: the Milton renaissance

25 JULY, 2018

During the economic downturn of the late 2000s, Milton had fallen on hard times.

There were empty storefronts, and the mood surrounding the town was down, said Ted Kanakos, mayor of Milton since 2016 and a resident in Sussex County for the last 20 years.

But there has been an uptick in the town since then.

“Milton is definitely in a renaissance,” he said.

Artisanal businesses have emerged, food trucks are a regular sight downtown and town festivals are commonplace.

In town, 73 out of the 74 storefronts have businesses in them, Kanakos said, and the mood surrounding the town has greatly improved with subdivisions being built and people moving in.

“The interesting thing about the economics of a town, a few years ago when the downturn of 2007 was really bad, the economy was bad, we were building almost no houses in our town,” Kanakos said. “Today, each year we set a record for building more houses, and when you have roofs, you have businesses. You can’t have businesses without people living in town.”

When the economy started to improve after 2010, people were more willing to take a risk on a business venture.

During the recession, when a business failed, stores would sit vacant for up to a year, Kanakos said.

“Now, if they don’t make it, that store is re-rented immediately, so there are a lot of people that want to be in business in our town,” he said.

But before the uptick, organizations such as the Milton Community Foundation had to help support businesses and art in the town.

Milton Community Foundation was a large part of the Horseshoe Crab Festival when it first started 15 years ago, said Steve Crawford, president of the Milton Community Foundation.

“We helped generate interest in town businesses through promoting festivals like the Horseshoe Crab Festival,” he said.

When he first moved to Milton in 2012, it felt vacant, he said. But since then, that has changed.

“I think we are small still, and is difficult to say directly that we helped bring businesses in, but we supported the community during the downturn and helped them that way,” Crawford said.

One business that has had success in Milton since opening is Suburban Farmhouse, a coffee shop and bakery on Federal Street.

The store opened in 2017, and when she first talked about opening it, people gave co-owner Kristen Latham a weird look.

“It has been an amazing outpouring of support since then,” she said. “We love this business, we love this town, we love this town’s people. They have rallied together and made us into such a success in such a short amount of time. I wouldn’t want us to be anywhere else.”

The store may add a new location in the future or expand, but right now, Latham is satisfied with where they are.

Milton is home, she said.

“A Milton local will come and they will bring their friend from Long Neck and their friend from Georgetown and Rehoboth, and they are all here,” said Jodi Sickles, co-owner of the Suburban Farmhouse. “We know everybody’s name and what they drink and I know what they want to eat.”

Milton — and their store — has turned into a destination for many people, Latham said, because they want to experience small-town charm.

They were destined to be there, she added, and the entire experience has been “serendipitous.”

“Milton is the place to go,” Latham said. “Milton is the place to be, and I think we have been saying that for the last few years and now it’s happening.”

In recent years, Milton, much like the small town of Berlin, Maryland, has been awarded with many recognitions as community with charm.

One business that has been in Milton since 2002 and stuck with the town through the economic downturn is Dogfish Head.

The beer trailblazers have their main brewery and cannery in the town, but it is very important that they support not just the town of Milton but the entire coastal Delaware region, said Mark Carter, off-centered event planning and benevolencing director.

“We are growing, obviously Delaware is growing, the town of Milton is going, Sussex County beach life, the whole area, is growing, and we bring a lot of folks into the community, not just Milton but all the neighborhoods and towns we are connected to,” he said. “So we bring 100,000 visitors in a year, those visitors, hopefully, traffic, not just by vehicle but by foot as well, into Milton.”

Dogfish will encourage people to venture into Milton to experience the town and see the historical society and possibly catch a play at the Milton theater. (Milton Mayor Kanakos said they have over 300 productions per year there.)

Dogfish Head also sponsor nonprofits such as the Milton Theater or Milton Community Foundation to make the town in which they are located more beautiful and more attractive to visitors.

“One of the things, I think, from day one Dogfish Head has always been about not just ‘Hey, we’re Dogfish, and we make beer,’ ” Carter said. “It’s ‘Hey, we’re Dogfish, and we are proud to be in coastal Delaware.’ “

Having a strong town council and a strong town manager that are actively invested in the town has helped tremendously, Kanakos said.

The people on the town council are at the top of their professions, he added, ensuring only the best of the best will be there helping out Milton.

Kristy Rogers, who became the town manager in early 2017, has also been an excellent asset to the town, Kanakos said, because of her ability to negotiate contracts with other agencies that will benefit the town.

Their representatives in the Delaware General Assembly, Sen. Ernie Lopez and Rep. Steve Smyk, also help the town out, ensuring their needs are met by the General Assembly to ensure they are competitive with other towns, Kanakos said.

Above all, though, since taking over as mayor two years ago, Kanakos is just happy with the way his town has grown and the responses to it.

“This is the leading edge,” he said. “Just a little town like this.”

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Agribusiness from Europe Establishes U.S. Headquarters in Delaware

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Agribusiness from Europe Establishes U.S. Headquarters in Delaware

16 JULY, 2018

When it came time for Belchim Crop Protection to decide on the home for its United States headquarters, the European company looked at the Research Triangle in North Carolina. It looked in Kansas City and it looked in Dallas.

So, naturally the agribusiness has set up HQ in a business park on Centerville Road where Prices Corner meets Greenville.

Now, the company with a growing portfolio of insecticides, herbicides, fungicides and other biological products is poised to take a larger market share in the U.S.

Last year, Belchim, which reported $600 million in sales in 2017, acquired Prescott, Arizona-based Engage Agro USA, laying the groundwork for major U.S. expansion.

The U.S. arm of Belchim plans $50 million in growth over the next three years. U.S. general manager Tom Wood said the growth will be aimed at expanding from niche fruit and vegetable crops into large row crops like corn.

Most of Belchim’s U.S. customers are on the west coast. The expansion into row crops will open up east coast markets like Delaware, where corn and soy crops are aplenty. Wood said Belchim is going to bring a unique herbicide to the U.S. market that is not there today.

Setting up in Delaware, of course, puts Belchim in the backyard of DuPont, which will live in on Delaware with its Corteva Acgriscience spinoff. Chemical giant FMC also makes Philadelphia its home. Belchim and FMC worked together in 2013, when Belchim granted FMC exclusive rights to develop, register, manufacture and sell Belchim’s proprietary fungicide valifenalate, in North America, Latin America and elsewhere.

Belchim later bought back FMC’s stake in the company after FMC acquired Cheminova.

“It’s a David and Goliath story,” Wood said. “We’re up against giants.

“Our strategy is not to go head-to-head with the basics like Corteva and not to go head-to-head in national distribution… Our strategy is to provide something for those types of companies from a life cycle management perspective. We fill the gaps particularly on weeds that escape their products.

“So it’s something they can add to their portfolio that is cost effective for them, for the grower and allows us to participate in market and take a market share without threatening the giants in any way.”

Belchim currently has just 12 employees in the U.S., up from seven at the beginning of the year. Some of those are out in the field working in regional sales positions across the country.

Four employees work full-time out of Delaware. Wood, a Chester native, said Belchim could have around a dozen or so employees in Delaware in two years.

“We will bring a unique herbicide to the U.S. market that is not there today,” he said. “So it will be a new innovation that the growers will appreciate. They’re already using it in mint crops as an emergency use approved by the EPA. It just gets the really tough weeds that no one else can get and it works well with every major herbicide out in the market.

“A lot of companies will enter the United States and come in with a, ‘Me, too.’ We will have something new that hasn’t been seen in the United States for years or they’ve never seen before.

“Once people start seeing our portfolio, they invite us back.”

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Feds Say no Further Review Necessary for Port of Wilmington Takeover by Emirati Company

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Feds say no further review necessary for Port of Wilmington takeover by Emirati company

28 JUNE, 2018

The terms of the pending 50-year deal would see the state continue to own the land under the nearly 100-year-old Wilmington port while Gulftainer would take over operations of the facility, which sits at the confluence of the Christina and Delaware rivers. The federal sign-off means the final terms must now be ratified by the Diamond State Port Corp., the port’s quasi-public operating board. 

BACKGROUND

General Assembly endorses port privatization plan

Gulftainer chief promises jobs as board gives blessing to port privatization effort

“This is a significant step forward in finalizing our agreement with Gulftainer, which will protect and create good-paying, blue collar jobs at one of Delaware’s most important employment centers,” Carney said in a written statement. 

State officials say the deal could double the 5,700 port and maritime-related jobs in Delaware.

The General Assembly signed off on the deal earlier this year, leaving the Committee on Foreign Investment in the United States (CFIUS) as the only approval outside the port necessary, officials said. 

 

That committee is tasked with reviewing transactions that could result in control of a U.S. business by a foreign person in order to determine the effect of such transactions on national security. The panel is comprised of military, homeland security, federal law enforcement officials and others. 

Wilmington would be Gulftainer’s second U.S. port. The company, based in the United Arab Emirates, opened a container facility in Canaveral, Florida, in 2015. The company has ports in the UAE, Lebanon, Iraq, Saudi Arabia and Brazil and is a subsidiary of the Crescent Enterprises, a privately held UAE conglomerate. 

Earlier this week, Thomas P. Feddo, deputy assistant secretary of Investment Security for the Department of Treasury informed an attorney representing the state that the deal is not covered under the Defense Protection Act. That act gives the president authority to review certain transactions involving foreign entities. 

 

Secretary of State Jeffrey Bullock said having the dozens or so federal agencies review the deal and declare no further review is necessary is the “best response we could have received” and clears the way for finalization of the deal. 

The board already signed off on the basic terms of the agreement earlier this year. 

Gulftrainer CEO Peter Richards has said Gulftainer plans to pour $73 million into the existing port through the next decade to modernize operations. 

 

The deal also calls for the development of a new container facility on state-owned land that was home to DuPont Co.’s Edge Moor chemical production facility to be finished by the first of 2024. Richards called it a $400 million investment. The state bought the 114-acre property from Chemours for $10 million in 2016.  

This article was originally posted on the Delaware News Joural at: https://www.delawareonline.com/story/news/2018/06/28/feds-sign-off-port-wilmington-takeover/739984002/

 

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Uber for Packages: Delaware’s DeliveryCircle will Remain in State

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Uber for packages: Delaware’s DeliveryCircle will remain in state

20 JUNE, 2018

When it came time to search for funding, Delaware-based DeliveryCircle faced a dilemma: Let investors on the West Coast move their operation across the country or find money that would enable the delivery service company to stay where it’s rooted.

“I personally always wanted to stay in Delaware,” said CEO and founder Vijaya Rao. “I had been pushing back.”

DeliveryCircle works in a similar way as tech transportation companies such as Uber and Lyft, except it deals in packages instead of people. Drivers on the platform run the gamut from professional couriers, stay-at-home moms, seniors and part-time contractors.

The business that launched in February 2014 got the best of both worlds when it came to new financing. DeliveryCircle announced last week it had raised a “significant minority investment” from financial and strategic supply chain investors, led by Cambridge Capital, NFI and other strategic investors.

Now based at the Christiana Corporate Center after graduating from the incubator at New Castle County’s Emerging Enterprise Center, DeliveryCircle will continue its rapid expansion in the ever-growing delivery service space.

Rao said the strategic partnership is “not just somebody giving us a checkbook.” The supply chain investors, she said, will better position DeliveryCircle to continue to grow as “last mile delivery” from businesses to consumers becomes more critical, especially in same-day service, which DeliveryCircle now provides in 19 states and more than 5,000 zip codes.

For perspective, the startup opened service with five drivers and 20 zip codes. There are now more than 900 drivers – all are contractors – on the platform, Rao said.

The company has just eight employees but some funding will go toward hiring back office management and finance positions in Delaware, Rao said.

Staying in Delaware was more than just staying where the company has been rooted. The space between New York and D.C. has proved to be a good location so far.

“We have kind of saturated that belt,” Rao said. “Of course, there is still room to grow. For us it makes sense.”

The company has national aspirations, though.

Rao said the company has grown 300 percent year-over-year during the last three years.

DeliveryCircle’s software and mobile application enable clients to match package sizes with a pool of professional, safe drivers and a variety of vehicle types.

“It’s no longer a hypothesis of a model,” Rao said. “It’s very much a working model.”

Originally, Rao said DeliveryCircle focused on being a business-to-business company. But as activity in the retail space increased, the demand to adapt into a business-to-consumer model increased.

On its website, DeliveryCircle says it works with brands such as Zoe’s Kitchen, Honeybaked Ham, Philly Foodworks and other food companies. Rao said DeliveryCircle also has contracts signed with larger brands and retailers for delivery services.

Most of the small companies DeliveryCircle works with come from referrals, Rao said. The company has not spent any money on marketing.

Rao said money from last week’s Series A funding announcement will go to hiring more full-time employees, business development and the continued geographical growth.

Moving west, it appears, was inevitable anyway.

Contact reporter Jeff Neiburg at (302) 983-6772, jneiburg@delawareonline.com or on Twitter @Jeff_Neiburg.

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Kenny Family Shoprites Eye Dover Market

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Kenny family Shoprites eye Dover market

20 JUNE, 2018

The CEO of a group of a group of northern Delaware Shoprite stores says the company is eying locations in Dover.

“We are currently negotiating with Brixmor the owners of the closed Acme site and also with three other potential sites owners in Dover. Hopefully one of these potential four sites will come to a final lease agreement,” says Chris Kenny, president of Delaware Supermarkets.

The Dover market opened up with the closing of the Acme Market store in north Dover. Acme – a part of Albertson’s which also owns Safeway – has been closing low-performing stores as it copes with competition, employee culture and other issues. The company still operates a Safeway store in Dover.

At present, the top two players in the Central Delaware market are Redner’s and the Walmart Supercenter. Reading, PA-based Redner’s also operates smaller store formats, some with gas stations. Other chains have departed the Dover area over the years with no grocer gaining a dominant market share.

Delaware Supermarkets, owned by the Kenny family, grew steadily after opening its original store in the Stanton area in the mid-‘90s. Its stores typically feature larger square footages than other non-Walmart competitors.

The Shoprite operator ’s growth accelerated with the opening several years ago with a non-traditional location on the edge of the Wilmington Riverfront and by acquiring and expanding former Pathmark and Safeway locations on each end of the sprawling Bear-Glasgow area south of Newark.

Shoprite itself is also on a growth track, picking up market share when the A&P chain folded. This occurred even though rival Acme acquired former A&P Pathmarks in northern Delaware and elsewhere.

Other Shoprites are in the Brookside area of Newark and in north Wilmington.

A Christiana River bridge that will link the area around the Shoprite to the nearly fully redeveloped area of the Riverfront is now under construction.

The Wilmington store is part of this riverfront area that will become the home of the 76ers Fieldhouse and the NBA G League affiliate, the Bluecoats. In the works are apartments and other developments in the area.

In northern Delaware, Shoprite is battling with Acme-Safeway for market share with the Philadelphia mainstay acquiring two former Pathmark locations in Milltown and Newark.

Other opportunities could crop up in the future for Shoprite.

Albertson’s currently has Safeway and Acme locations that are in close proximity to one another in north Wilmington and Bear-Glasgow. That has led to speculation that other closings are in the cards. For example, Safeway and Acme locations in north Wilmington are within a stone’s throw of one-another along Naamans Road.

Delaware Supermarkets, meanwhile, has worked to maintain a local touch by highlighting Delmarva produce and food products from local companies. The company is also active in the community through a family foundation.

Shoprite is a northern New Jersey-based cooperative that supplies markets owned by the Kenny family and other operators. Shoprite is now the largest supermarket chain in a region that includes the Delaware Valley, according to Food Trade News.

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