by James DeChene
This week DEFAC met, and forecast an additional $64 million in revenue for FY19, if the budget were to remain the same. While positive news, the forecast did not consider the contract negotiations with Department of Corrections on salary increases, nor did it factor in student enrollment numbers and new Medicaid rates, which won’t be released until later this fall. You may recall from last year that the student enrollment and Medicaid increases resulted in an additional $150 million the state budget writers needed to factor in, and represented about 40% of last year’s budget gap. Those numbers will be available for consideration at the upcoming December 18th meeting, which will also be the forecast Governor Carney will use when crafting his recommended budget.
Also this week, the board of the Prosperity Partnership, the P3 created to replace DEDO, met for the first time. The organization is officially up and running, and now comes the work of getting itself operational. The coming months will flesh out how the entity will operate. We will continue to update our members as more information is available.
by James DeChene
Since 2002 Delaware had been ranked #1 in The Institute for Legal Reform’s Harris Poll Lawsuit Climate Survey. This year’s survey finds Delaware dropping to #11.
According to the report, “Participants in the survey were comprised of a national sample of 1,321 in-house general counsel, senior litigators or attorneys, and other senior executives at companies with at least $100 million in annual revenue who indicated they: (1) are knowledgeable about litigation matters; and (2) have firsthand, recent litigation experience in each state they evaluate.”
While Delaware still scores high in key element categories of scientific and technical evidence, trial judges' competence, quality of appellate review, and enforcing meaningful venue requirements, it fell significantly in Treatment of Class Action Suits and Mass Consolidation Suits (from #1 to #26) and Trial Judges’ Impartiality (down to #15).
When I asked about specifics that were factors in Delaware’s drop, I was given a handful of recent court decisions and specific pieces of legislation passed by the General Assembly. From my perspective, no one decision or bill by itself precipitated the drop, instead the reasons for the decline seem to be a shift away from supporting what made Delaware a top corporate legal environment for so long. In fact, even though Delaware scored #1 in 2015, I was given warnings then about a potential slide in rankings if Delaware continued to focus on legislation and issued court decisions that were increasingly plaintiff friendly.
I’ve written about these issues before, and seemingly often, which include Delaware’s approach to abandoned property, the fee shifting debate that took place a few years ago resulting in the passage of SB75 that reversed the “loser pays” model of litigation, and the ATP Tours, Inc. v. Deutscher Tennis Bund decision that precipitated SB75.
In fact, over the last few years, Delaware’s cache has dropped when reviewed by other organizations as well. For example:
The fact remains that the constant drip of decisions and legislation designed to support plaintiffs over business has led directly to where Delaware is today: a world where South Dakota is ranked as having the top business legal climate, and where Delaware is on the decline according to recent national ratings.
One thing remains constant, however. If Delaware continues its current trend, our image will continue to suffer. Delaware relies on the billion dollars in revenue it receives each year from companies choosing to incorporate here. We should be doing what it takes to retain our corporate image if there is to be any realistic expectation of that being the case in the future.
This past spring, Governor John Carney and the Delaware legislature put in place two key foundations for economic development: Modernizing the Coastal Zone Act and the Delaware Prosperity Partnership, the new public/private nonprofit responsible for recruiting new employers to the state. In addition, the City of Wilmington is undergoing the creation of a master plan to help revitalize Delaware’s corporate hub. An example of such a transformation lies just 20 miles to its north.
On Monday, September 11, The Delaware State Chamber hosted a trip to the Philadelphia Navy Yard. The Urban Land Institute has hailed the venture as one of the “most successful” redevelopment projects in U.S. history. The Navy Yard is a 1,200-acre urban development, offering the Philadelphia region a mixed use and centrally-located waterfront business campus. The Navy Yard is home to more than 13,000 employees and 152 companies representing industrial, manufacturing, office and research, and development sectors. To date, the Navy Yard has developed 7.5 million square feet of real estate in a mix of historic buildings and new high-performance and LEED® certified construction. Since 2000, more than $1 billion has been invested to transform the site into a world class location for corporations like GlaxoSmithKline, Urban Outfitters and Tasty Baking Company.
The PIDC (formally known as the Philadelphia Industrial Development Corporation) is Philadelphia’s public-private non-profit economic development corporation founded jointly by the City of Philadelphia and the Greater Philadelphia Chamber of Commerce in 1958. The PIDC serves as master developer, and oversees all aspects of the Navy Yard’s management and development, including master planning, leasing, property management, infrastructure development, utility operation, and the structuring of development transactions. Reed Lyons, Vice President Navy Yard Development, led our tour and pointed out that the Navy Yard had no public infrastructure when the U.S. Navy handed the site to Philadelphia. The Navy Yard transformation started with little but a vision, and 20 years later that vision has become a success story.
Mike Vanderslice, Environmental Alliance, Inc. and Chairman of the DSCC Economic Development Committee, says, “From an economic development perspective, I appreciated what our friends at the Navy Yard had to offer for what's 'working' and lessons they've learned as they continue to develop the historic waterfront area. Being in the environmental consulting field, it was impressive to see how far they have taken this former heavy industrial, blighted area, and turned it around into a vibrant campus for businesses.”
Link to Urban Land Institute’s article on the Navy Yard:
Link to the Navy Yard:
by James DeChene
This week the State Chamber’s Transportation & Infrastructure Committee heard from representatives from DELDOT and Whitman, Requardt & Associates, updating the committee on the status of the 301 Project (on time and on budget so far), as well as a major renovation project for I-95 starting in 2020.
Save periodic repavings, the highway between the I-95 and 495 split to above the Brandywine Bridge has remained virtually untouched for the last 60 years. The 2020 renovation project for I-95 will include a major structural and paving upgrade that will also include rehabilitation work for over 19 bridges and exit ramps, and will include other traffic flow improvements in the surrounding areas.
Scheduled to take place over two years, this project will have a large impact on travelers both local and passing through Delaware. The purpose of the briefing was to alert the business community for potential planning purposes, including offsite or off-normal working hours for employees, as well as other logistics planning. More information will be forthcoming to the State Chamber membership, so stay tuned.
by James DeChene
BREAKING: Obama DOL's Overtime Rule Struck Down
A Texas federal judge on Thursday invalidated the Obama administration’s controversial rule expanding overtime protections to millions of white collar workers, saying the U.S. Department of Labor improperly used a salary-level test to determine which workers are exempt from overtime compensation.
In other news, the Adult Use Cannabis Taskforce meets for the first time next week in an effort to learn more about the possibilities and ramifications, positive and negative, of legalizing recreational marijuana. The State Chamber has a representative on this taskforce, and if you have questions, concerns, feedback on the issue, send it to me, and I will pass it along. The Chamber has expressed concerns related to labor law, including increased workplace-safety problems, higher worker-compensation costs, reduced productivity/attendance issues, and practical issues such as how to test for “under the influence” (or “impairment”).
An Executive Order by Governor Carney to create an offshore wind taskforce was signed this week. There will be a business representative (unnamed as of yet) on the taskforce, and the State Chamber will be monitoring its progress.
Next week is ChamberChase, the Chamber’s golf outing. Wednesday night before there will be a networking event at Lucky’s Alley & Eats. If you’re in Lewes, or nearby, come join us. We’re fun.
And from Forbes this week, “If you live in Delaware and you compare your current paycheck with one from a year ago, you might notice that you've made a couple of extra bucks. Over the past year, Delaware was the U.S. state that recorded the greatest growth in hourly earnings. According to the Bureau of Labor Statistics, people employed in private industry in Delaware saw their average hourly earnings increase 11.7 percent from $23.85 to $26.64 between July 2016 and July 2017.”
by Michael Smith
University of Delaware Director Strategic Initiatives/Partnerships, College of Health Sciences
Tuesday morning, August 22, we topped off the new Tower on the University of Delaware’s STAR Campus. Many in the business community are used to the groundbreaking and the ribbon cutting, but the top off is something that is extra meaningful for UD.
Historically, this started with the Scandinavian religious rite of placing a tree atop a new building to appease the tree-dwelling spirits displaced due to construction. Today, the top off symbolizes community, partnership, research, education and innovation. UD’s impact goes beyond the classroom and today this top off showcases our commitment to Delaware’s future and the impact the University of Delaware will have on economic development for the state of Delaware. This is a milestone moment for the community, University of Delaware and the state, as we continue to transform the former Chrysler Manufacturing plant into a new hub that mixes research, education and industry into the innovations of tomorrow.
The College of Health Sciences will occupy floors 2-7. Floors 8-10 will be spec space for outside companies. There will also be ground floor space available for amenity businesses. The college space will include a 300-person auditorium for events and classes, demonstration kitchen, child nutrition lab, and sleep lab. It will also house augmented reality and simulation space, innovation and maker space, research space, conference rooms and office space. The Tower will create a unique environment for the collision and collaboration of industry and partnering organizations that will drive economic development for the state of Delaware.
The Tower will open August of 2018. Come see it for yourself. As we inspire, impact and innovate, we need you to partner, dream and collaborate with us to drive STAR Campus, UD and the state of Delaware forward. The sky is the limit!
by James DeChene
A mostly quiet August is upon us so far, and this week, the excitement came at the beginning when Gov. Carney signed HB 226, establishing a Public Private Partnership focusing on economic development and bringing/retaining jobs in Delaware. As many of you know, this was a top priority for the State Chamber, and we are pleased to have the bill become law, but now the real work begins.
Murmurings over next year’s budget, and an almost certain shortfall, are making their way through the state. Expected increases in school enrollments and Medicaid expenses (combined last year to be $150 million) are driving what could be another $300 million budget gap. How this hole will be filled is unclear as of now, but the hope is to have discussions prior to the start of legislative session to work out possible solutions.
The Adult Use Cannabis Taskforce meets for the first time on September 6. I’m interested in any feedback from the business community on what legalizing recreational marijuana would mean for your business operations. Feel free to email me at: email@example.com
On August 1, 2017, The Mill and Innovincent presented the first Millenial Summit (#MillSummit), a full-day event held at the Chase Center on the Riverfront. Over 250 attendees, representing a variety of industries and passions, came together to network, learn from topic experts and explore the diverse community that Wilmington has to offer. The Delaware State Chamber of Commerce was pleased to have its Delaware Young Professionals Network involved with the event's planning committee.
The event kicked off with Sara Fischer, Axios media reporter, who took the audience through the data and trends of technology use among millennials. A panel on crafting one's personal brand followed, with Governor Carney giving closing remarks for the morning session. The keynote address was given by Ambassador Vlora Citaku, Ambassador of the Republic of Kosovo to the U.S. Her compelling journey from refugee to ambassador made for an inspiring speech, and a dynamic Q&A session with the audience.
Multiple breakout sessions and panels were held throughout the day. DSCC's Events Manager and Program & Communications Specialist, Kelly Wetzel, served as a panelist on leadership through nonprofit and community involvement; and James DeChene, Senior VP Government Affairs, moderated an afternoon discussion with some of the youngest elected officials in Delaware about political and legislative engagement. To see the day's full lineup of panels and speakers, visit millsumit.com.
by James DeChene
Today, Wednesday, August 2, 2017, Governor Carney signed into law HB190, legislation modernizing Delaware’s Coastal Zone Act. The Delaware State Chamber of Commerce would like to thank Governor Carney, legislation prime sponsors Representatives Osienski, Heffernan and Gray, and Senators Townsend and Pettyjohn, along with the 52 members of the General Assembly who voted for the bill, for their efforts in passing such important legislation.
The State Chamber of Commerce would also like to thank our members who took the time to weigh in with their support for the legislation, and for recognizing the positive impact it will have on Delaware’s economy.
“I appreciate the efforts of our partners in the business and labor community coming together to help get this bill across the finish line,” said Rich Heffron, President of the Delaware Chamber of Commerce. “These types of partnerships will be key to securing Delaware’s long-term economic future.”
by James DeChene
Two articles were printed highlighting two sides of the same coin on Delaware’s budget and economy. The first states that while Delaware’s unemployment rate is holding steady at 4.7%, we are struggling compared to the rest of the nation. Not only that, but our job creation pace slowing, with a sluggish growth rate of less than .1%.
The other story was of the purchase of the Hercules building in Wilmington for a third of its mortgage note, at $22.3 million (the note was $65 million). That was for a building with a roughly 50% occupancy level. This adds to the growing pool of available, and unused, office space in Wilmington. This paints a fairly bleak picture of Delaware’s overall recovery and what the budget will look like next year.
Work on the public private partnership (P3), also known as the Delaware Prosperity Partnership (DPP), to reorganize DEDO continues, with next steps including the Governor naming board members. The hope is to have the organization up and running by the end of the year.
The first Ecological Extinction Taskforce met this week. Attendees heard a presentation from UD professor Dr. Doug Tallamy on the reduction of a number of Delaware species. The next meeting is August 7.
James DeChene is the Chamber's Senior Vice President of Government Affairs.