by James DeChene
I’m still amazed at how Amazon decided to pack its virtual bags and abandon plans to build a headquarters in NYC. Not only does it showcase the hoops that businesses go through to relocate and bring jobs and development to a city or region, it’s staggering when you compare cost of living to other areas across the country.
Case in point comes from a WSJ opinion article (PDF version here) from a restauranteur who moved his business from California to Nashville. Comparing cost of living in Arlington (the site of the headquarters building Amazon will build) to NYC to Nashville shows that compared to living in Manhattan, a $150,000 salary there translates into a 51.8% increase in purchasing power in Arlington ($229K) and a whopping 171% increase in purchasing power in Tennessee, to the tune of almost $410,000.
All of this circles back to places like Delaware. We have a ton going for us—low cost of living, urban, suburban, rural and beach lifestyle choices, regionally located to all the places you want to visit but may not want to live, and access to a talented workforce that’s getting better by the day.
The story also reinforces messages that the State Chamber and other groups have been offering for years related to permits and places like Middletown that get that timing matters. As we’ve heard from site selectors, 6 months for permitting is the sweet spot to get noticed by companies looking to relocate. Efforts continue to track permit status, made easier by DELDOT and DNREC websites created to do just that, but more can and will be done to perfect the process.
Companies, and their C-suites, should be looking at what happened in NYC with Amazon, and should be making decisions based on how they’ll be received by local communities. The fact remains that Delaware is a bargain, and by continuing to make strides in making us more attractive, we’re in a better position to compete.
by James DeChene
This year’s “Rich States, Poor States” was released this week, and Delaware checks in at 28th for economic performance, and 36th for economic outlook. Performance is calculated by considering state GDP, non-ag employment numbers and domestic migration. No surprise that we come in high (19th) in migration as we are a retirement destination state due to low property taxes and great beaches. For economic outlook, there are 15 areas considered, some in which we score well—no sales tax, low property tax; and some not so well—marginal tax rates on both individual and corporate payers, and average workers compensation costs. These numbers are right around where we were last year: 37th in 2017 and 44th in 2016, but 27th in 2014.
In the broader picture, an interesting take away was how net migration will impact congressional seats in the 2020 census. According to Election Data Services, the following states are poised to gain seats:
· Texas will gain three, from 36 to 39;
· Florida will gain two, from 27 to 29;
· Arizona will gain one, from nine to 10;
· Colorado will gain one, from seven to eight;
· Montana will gain one, from at-large to two;
· North Carolina will gain one, from 13 to 14; and
· Oregon will gain one, from five to six.
These states are poised to lose seats:
· New York will lose two, from 27 to 25;
· Alabama will lose one, from seven to six;
· California will lose one or remain even, from 53 to 52 or no change;
· Michigan will lose one, from 14 to 13;
· Minnesota will lose one or remain even, from eight to seven or no change;
· Ohio will lose one, from 16 to 15;
· Pennsylvania will lose one, from 18 to 17;
· Rhode Island will lose one, from two to one; and
· West Virginia will lose one, from three to two.
The “Rich States, Poor States” report lays out these numbers as well, and ties in states' overall tax policy approaches to help explain the migration. If the trend continues, high tax states will continue to lose congressional seats. It will be interesting to see how that changes the makeup on Congress, and their approach to tax policy.
by James DeChene
Before we get to what happened in Dover this week, a reminder that our networking event at the Delaware National Guard Joint Force Headquarters is a week away. This is your chance to:
And now onto Dover. This week the JFC continued to hold meetings hearing budget requests from state agencies. I attended the Departments of Insurance, Labor, and Natural Resources and Environmental Control (DNREC) hearings, and each secretary gave a good overview of what their offices are doing and plans for next year. A few items of note included the work the State Chamber, and others like ABC, DCA, Labor and legislators, have done to address issues related to the Workplace Fraud Act and how work is performed on construction sites. That work continues, and I’m thankful that we’re reaching consensus on some big issues that will have a positive impact on the industry and its workers.
Of note from DNREC, Secretary Garvin made the announcement of a website launch in the coming month that will track permit applications made to the department. As you know, the State Chamber has been working with agencies like DELDOT and DNREC on streamlining their permitting processes to help development projects become 'shovel ready' faster. This tracking mechanism, apparently similar to what DELDOT has created, will show not only delays, or speed, from the DNREC side but also track if applications are missing data, causing a slowdown from the business side. More to come once the website goes live.
Hope to see you next week at the Guard event.
by James DeChene
This week’s focus in Dover was on two bills directed toward the 500 federal workers living in Delaware currently furloughed. The first bill, which passed both the House and Senate, allows these workers to petition the court to halt eviction and/or loss of insurance policies or automobiles due to non-payment for the duration of the federal shutdown and for a duration of 120 days after. It would also limit the amount loan holders could charge during this time period, capped at 6%, no matter the original loan terms. The second bill, which passed the House, but failed in the Senate, would provide furloughed workers the opportunity to apply for state backed, low interest loans.
Also this week the Governor announced his recommended budget. Of note to Chamber members was the outlining of how a newly created infrastructure fund ($10 million dollars) would be managed, allocating $15 million to colleges and universities toward economic development initiatives; adding $7 million additional funding in the Bond bill to UD, DSU and DelTech, allocated for deferred maintenance; and setting aside $12.5 million to Delaware’s Strategic Fund.
The General Assembly will be in recess throughout February as the Joint Finance Committee will meet to hold budget markup sessions. They will return March 5.
In a surprise announcement at the 20th Annual Marvin S. Gilman Superstars in Business Awards Luncheon, the Delaware State Chamber of Commerce awarded the esteemed Gilman Bowl to its namesake’s daughter Martha Gilman. The award, presented in conjunction with the Chamber’s Small Business Alliance, is kept secret until the event.
Martha has played a critical role in the activities of the Small Business Alliance, being a long-standing member of the Board of the Alliance and as a member of the State Chamber Board of Directors for over a decade. Since its inception in 1998, Martha has relentlessly committed to making the annual Superstars Luncheon a moral and financial success. Her tireless efforts in logistical planning and development/fundraising for the annual event continues year after year and is a testament to her parents’ admired example.
“One of the things I love most about this program and hold with me each year is the memory of seeing my mother’s pride when she would attend the luncheons. The Hotel du Pont was one of my father’s favorite Delaware landmarks, and so it is very special to our family to hold the awards luncheon in the Gold Ballroom. I’m honored to carry on their good work in this way, and even more so to bring my son, Brett, in as part of their legacy,” said Martha in a recent interview for the Chamber’s magazine, Delaware Business.
She and her father went into business together, founding Gilman Development Company, a land development and homebuilding firm. Additionally, she co-founded Cornell Management along with her father and brother, Peter. Cornell Management, in conjunction with Gilman Development, builds, owns and manages rental housing. Martha and Marvin were also instrumental in creating The Delaware Housing Partnership (DHP), which provides families with affordable and comfortable housing as homeowners or as renters. The Gilman family’s efforts have given approximately five hundred families in all three counties the ability to lead a better quality of life with homes in which to raise their families.
Leading the charge on Gilman Bowl nominations each year, it was a big but important task to make sure she would be surprised. A fake script was even crafted to keep her in the dark. It wasn't until a video she thought was about the 20th anniversary played that it became clear, with her son, Brett, and several colleagues making the announcement. Click here to watch the announcement; and click here to watch the Facebook Live video from the event. DSCC President Mike Quaranta was joined by Senator Chris Coons, along with Martha's family, to present the award.
The Gilman Bowl was established to recognize those who exhibit exceptional small business leadership. It is named in memory of Marvin S. Gilman, who served as an exemplary leader and a paragon of small business and philanthropy in Delaware. Martha has, and continues to, serve her community in various ways. Her involvement includes the 21st Century Childrens’ Fund, a nonprofit that gives grants to children in need so that they can participate in extracurricular and developmental activities that would otherwise have been beyond their financial reach; as well as the Delaware Community Fund, the Rotary Club of Wilmington and the Homebuilders Association of Delaware.
The program included keynote remarks from Scott Kammerer of SoDel Concepts.
"Building something from nothing isn't for everyone, but I wouldn't trade it for anything," said Kammerer in sharing the story behind SoDel's inception, challenges overcome, accomplishments made and the success yet to be had.
The event also honored eight outstanding companies as Superstars in Business and Award of Excellence winners. Winner videos and event information can be found at www.dscc.com/superstarsinbusiness.
by James DeChene
During the State Chamber hosted its Developing Delaware event in Dover this week, Governor Carney told over 250 attendees a story about being approached by a gentleman claiming to have a catchy new slogan to market Delaware (a la “Virginia is for Lovers or I love NY). After the reveal of “DelaWow”, and the laughter that accompanied it, Governor Carney went on to make the point that there are things happening in Delaware surrounding economic development that are working (more on that later).
The Developing Delaware event featured insights on Delaware by the numbers from TIP strategies outlining Delaware’s workforce makeup, the types of industries represented here, and other key factors that businesses looking to locate here take into consideration in their decision-making process. That was followed by a conversation with site selectors tasked with comparing states, metro areas and other locations for their clients looking to set up shop. Key were the insights on the need to be nimble, to approve projects quickly, and to have a pipeline of sites shovel-ready to market and attract companies to Delaware. For more information and a recap of the event, visit www.dscc.com/developingdelaware.
Also this week was the groundbreaking at DOT Foods for their new 150,000-square-foot redistribution center on Wrangle Hill Road and Red Lion Road. DOT Foods is the nation's largest redistributor of food products in the US with 3.5 million-square-feet of warehouse space, $7 billion in sales and 4,800 employees. They will be creating over 250 new job opportunities with an expected $6 million annual payroll.
See, Cerron Cade—I can write on positive news too.
by James DeChene
The CZA Regulatory Advisory Committee met earlier this week for the fifth time. During the meeting, reports were given from the various working groups focusing on individual components of the legislation’s requirements, including how to account for sea level rise, providing financial assurance, and how to monitor bulk product transfer. Of the reports, an agreement of sorts was reached on definitions related to bulk product transfer, while the other topics will be revisited in future meetings based on the amount of material needed to review. Regulations are to be finalized by 10/1/19, and with a little less than a year left, there remains quite a bit of work to be completed.
The State Chamber’s Healthcare & Employer Advocacy and Education Committees hosted a joint event focused on the legal and human resources issues of opioids, drugs and alcohol in the workplace. Attendees were presented with three case studies involving small, medium and large businesses, with a variety of circumstances surrounding employee behavior, benefits and worst-case scenarios.
Next week is the State Chamber’s “Developing Delaware” event taking place in Dover at the Modern Maturity center. Focused on how Delaware compares with surrounding states when reviewed by site selectors, looking at Delaware “By the Numbers” and hearing success stories from around the state, this is a great opportunity to learn about economic development activity happening in Delaware. With over 200 attendees already registered, it will be a great networking event, too. To register, visit: http://web.dscc.com/events/Developing-Delaware-Conversation-Collaboration-Innovation-2175/details
This week the State of Delaware signed an agreement with Gulftainer to run the Port of Wilmington. Under terms of the 50-year deal, Gulftainer has pledged to invest $600 million in upgrades and build a new container-handling terminal on the Delaware at Edgemoor. The deal also has the potential to double the number of jobs (currently around 5,700) in the coming years, providing a blue-collar job resurgence in an area in desperate need of those types of jobs.
Last night the State Chamber hosted its annual networking table top event at the Chase Center, in partnership with the Better Business Bureau of Delaware. Billed as the largest business to business networking event in the state, with over 100 exhibitors and over 600 attendees, the event was a successful matchup among Chamber members, highlighting the variety of businesses Delaware has to offer.
And finally, I would be remiss if I didn’t wish Rich Heffron a very happy birthday. Lucky for him it falls on a Friday this year, just in time for our Weekly Report to go out.
The Chamber would also like to wish James DeChene a happy birthday, as he and Rich were both born on September 21! Happy Birthday to them both!
by James DeChene
A number of good news items this week helps offset the crummy weather, including Ashland announcing they will be moving their headquarters from Kentucky to Delaware. Also in the news was a group, Capital Ideas, ranking Delaware first in innovation among the 50 states due to the high numbers of innovation patents awarded to Delaware businesses, at a rate of 20 utility patents per 1,000 people. It should come as no surprise that DuPont’s presence in Delaware is a leading reason for our ranking.
Good news this week if you live in Sussex County and you have a computer. Gov. John Carney on Tuesday announced a state initiative to partner with the private sector to bring broadband wireless Internet to underserved areas of rural Kent and Sussex counties.
News of developing the AstraZeneca site on Rt. 202 was welcomed this week. Featuring a mixed use of apartments, shops, restaurants, office space and a hotel, the project has the potential to breathe life back into the corridor, and coupled with the proposed development at 202 and Silverside Road, a lot of new opportunities for businesses to expand or relocate are on the horizon.
Lastly, it was announced that Damian DeStefano will be the new head of the Division of Small Business. You may remember Damian as Governor Markell’s economic development policy advisor. It will be good to work with him again in his new role.
by Mark DiMaio
The Chamber’s annual End-of-Session Legislative Brunch was held on June 7 at Dover Downs. The brunch marked the last official event for retiring Chamber President, Rich Heffron.
Attendees heard from Kurt Foreman, President & CEO of the Delaware Prosperity Partnership. Kurt discussed Delaware’s current economic situation as being “a glass half full.” Delaware has experienced moderate employment growth, with the construction sector leading the way and other employment sectors showing modest growth. Housing starts are the strongest they’ve been in several years and Delaware’s housing affordability is more positive than the US market overall. Mr. Foreman shared the Delaware Prosperity Partnership’s four main areas of focus:
James DeChene, the Chamber’s Sr. Vice President of Government Affairs, spoke about the “Tale of Two Budgets.” Last year Delaware faced a $400 million-dollar budget shortfall followed by a nearly $400 million-dollar budget surplus this year. The fundamental question here is how we can make the budget process easier, and more efficient and accurate. Boom and bust cycles may be natural, but helping to smooth the highs and lows will help put Delaware on more stable, certain financial footing. The Chamber strongly supports a bipartisan plan put forward by the Governor and State Treasurer to create a true “rainy day” fund to be used in lean budget times and added to in good economic times. This proposed plan requires a constitutional amendment, and requires passing changes to our tax structure and limits on spending. The constitutional amendment needs to be passed this year, as it takes two consecutive legislative sessions to become a part of Delaware Constitution.
Attendees also heard from Senate Pro Tempore David McBride and Speaker of the House Pete Schwartzkopf. Senator McBride highlighted the state’s budget and the fact that it would be completed well before the end of June. However, he wasn’t sure that the Senate would pass the minimum wage bill this year. He gave credit to the State Chamber for its role in the passage of the Coastal Zone Modernization Act last session. Representative Schwartzkopf spoke on the passage of legislation to bring $580 million dollars of private investment to the Port of Wilmington. He also pointed to the state budget’s restoration of the senior drug program, funding for special education and salary increases for teachers.
This year’s Small Business Guardian awards were presented to Senator Brian Pettyjohn and Representative Harvey Kenton.