New private-public approach paying off in Delaware job wins
WILMINGTON – In the last three years, a rush of projects has located in Delaware, ranging from one of Amazon’s largest fulfillment centers to a $91 million corrugated box manufacturing plant, and also expanded here, including a growing consumer lending company and an international chemical company.
What all of them had in common was the involvement of the Delaware Prosperity Partnership (DPP), the public-private partnership that took over the state’s major economic development efforts under the Carney administration.
The DPP, led by its low-key president and CEO, Kurt Foreman, has managed to invigorate the state’s competitive profile, scoring prominent projects, winning industry accolades and earning the buy-in of private-sector leaders around the state.
Last year, despite the COVID-19 pandemic canceling trade shows and conferences that are often economic development agencies’ best chances to meet with influential site selectors, the DPP had its best year to date, securing 10 projects worth $428.7 million that will create more than 1,650 jobs. In less than three years of active work, the organization has secured 30 projects worth more than $733 million that created or retained more than 4,200 jobs.
It’s been able to find that success while relying less on economic incentives that administrations of the past have offered. Through its first three years, state projects have received more than $30 million in grants backed by taxpayers, about half of which have been assisted by the DPP in their projects. That three-year total is about 20% less than what the state doled out in incentives in 2017 alone though, when it offered $10 million to JPMorgan Chase and $9.6 million to DuPont.
DPP is also finding support from the private sector, which splits the cost of the operation with the state government. Currently fundraising for its second three-year phase with a goal of $3.9 million in member dues, ranging from $2,500 to $100,000, DPP has raised $3 million from more members than its inaugural phase.
That success has led a rising profile for the nonprofit organization overseen by an 18-member board of industry leaders and lawmakers, chaired by Gov. John Carney and Rod Ward, the CEO of the leading business services firm CSC, both of whom were integral to DPP’s founding.
From DEDO to DPP
When then-U.S. Rep. Carney made his second run at the governorship in 2016, the First State was in a very different time.
The administration of then-Gov. Jack Markell was ending after an incredibly difficult eight years punctuated by large job losses from legacy businesses like DuPont, Chemours, Evraz Steel, and AstraZeneca in the wake of the Great Recession. Longtime economic drivers like the Chrysler and General Motors automotive plants in Newark and Newport had also long since closed.
Delaware, which depended on a state agency, the Delaware Economic Development Office, to handle job creation and retention efforts, was seeing uneven results. Several high-profile efforts failed to yield hoped-for results, including Fisker Automotive, The Data Center and Bloom Energy, and the state would run into a nearly $400 million budget deficit in 2017.
The confluence of those factors led the Delaware Business Roundtable, a collection of dozens of Delaware’s CEOs and top executives, to commission a study of what the state could do to correct course. The 2016 Growth Agenda encouraged “a reset of economic development,” and among its many suggestions was to turn over the job creation and retention efforts to a public-private partnership (P3) that could focus on an innovation-based economy that grew future companies.
“I’ve always felt, as a kind of pro-business Democrat working with businesses on business climate, on attraction and retention, and on a science and technology base, that this new model of a public-private partnership was a really good recommendation,” Carney said last month. “It certainly has met, and probably exceeded, my expectations on a number of fronts.”
As state finance secretary and deputy chief of staff to former Gov. Tom Carper, who secured the U.S. headquarters of AstraZeneca in 1999, and lieutenant governor under Gov. Ruth Ann Minner, Carney said that he got to know the private-sector employers of the state.
“[DPP] was more just building a sense of credibility and solidarity with a sector of our state that is incredibly important. They create and sustain the jobs that make our state run,” Carney said.
Ward noted that the public-private model had been tried by about a dozen states, including Florida and North Carolina, before the Roundtable suggested it. The P3 model could amplify the voices of state’s mid-sized companies like his own CSC and WSFS Bank as the First State saw the decline of previous mega-employers like DuPont, MBNA, and Wilmington Trust. They also sought to include organizations that often fall outside of traditional employer examples like law firms and health care, with Richards, Layton & Finger, ChristianaCare and Bayhealth all contributing to the effort.
“When you look at a P3, the private sector has to play an active role,” Ward said. “I think it was important to those initial investors to say, ‘OK, we’re 40 to 45 companies all willing to try this and support this.’”
With Carney ushering the change through in 2017 with the support of the General Assembly, the first step was finding the right leader.
Foreman as DPP foreman
Unlike many economic developers who fall into the industry by chance, Foreman said that he sought it out in college, where a professor was a former economic development chief for Allentown, Pa. His mentor connected him with a job as a researcher for Fairfax County, Va.’s economic development office.
As the child of an Army chaplain, Foreman is used to moving frequently – he’s moved 28 times in his lifetime. Before landing in Delaware, he spent 14 years running economic development efforts in the Greater Oklahoma City area and in Northern Louisiana.
His time in different regions around the country broadened his perspective for how to position his charge to compete effectively. The South, with its history of plentiful resources and low-cost, non-union labor, often bid aggressively for projects. The Midwest, which is split between the northern and southern Midwest, has had to evolve from its agrarian roots as well, pivoting into manufacturing, aerospace and energy production.
Foreman was leading the Greater Oklahoma City Chamber of Commerce, where he secured the transfer of aerospace giant Boeing’s Aircraft Modernization & Sustainment headquarters, bringing 800 jobs, when he applied for the role of DPP president and CEO.
“I gravitate toward the chance to build something. I’m not the guy that’s going to drive the same bus for 20 years and be content,” he said.
Foreman and Carney said they were equally impressed with each other the first time they talked. Foreman was intrigued by Carney’s goals and commitment to seeing them through, while Carney said that he enjoyed Foreman’s collegial approach.
“Kurt doesn’t have a big ego. He’s very willing to work with our partners in the local chambers and he doesn’t try to elbow them out of the way or take credit,” the governor said, noting it fit Delaware’s collaborative culture.
“To me, success is measured by the numbers: how many new jobs, how many retained jobs, etc.,” Carney said. “Kurt doesn’t get too carried away by all that. He understands that it’s a day-to-day, compete-to-win kind of thing and if you continue to till the soil and cultivate the ground people will see the light.”
DPP depends on a variety of traditional avenues for prospect leads, including news reports, site selectors, industry connections and more.
Foreman said that some of his favorite projects began when a local business owner reported to them that they heard a company was looking, noting that the New Castle project for pet food manufacturer JustFoodForDogs began in just that way.
“I’d love everyone in Delaware to be a salesperson for Delaware in one way or another, because we’re all experts. You may not feel like you’re an expert, but when you sit next to someone on an airplane, talk to them about where you’re from and you tell them it’s either a great place or a terrible place that carries a lot of weight,” he explained. “Why wouldn’t they believe you? You’re from there.”
Most of the work is more marketing than anything else, as DPP tries to sell the state as a good place for those looking to relocate. The 12-person team produces press releases, studies, and reports that highlight the strengths of the state and seek coverage from regional and national publications.
When a prospect or a site selector does express interest, the DPP team works to provide answers to questions about sites, workforce, taxes, regulation and more. Often the team will find solutions to a client’s request that they didn’t expect.
Foreman recalled that when Delmarva Corrugated Packaging was searching for a site in Delaware, it preferred New Castle County. Seeking rail access, a tax-break-applicable Opportunity Zone, and a sizable parcel though, DPP suggested 12 sites statewide that fit their needs – 11 of which were in Kent and Sussex counties. Ultimately, the company landed in the Dover area.
For those companies on the fence about a Delaware project, Foreman said that the P3 model’s access to private-sector leaders can prove invaluable. They will often ask a company leader or HR representative to speak with a prospect about their experience in the state, helping to provide that extra assurance for an investment.
“We don’t need everyone to choose us, we just need certain people or a certain cross section of people to choose us,” Foreman explained.
Averaging 10 projects landed a year takes a bigger pipeline of prospects to be wooing. As of February, DPP was in active conversation with 62 companies, more than half of which were from out of state.
“They’re really high-quality projects, not just tire-kickers,” Foreman said. “They’re really looking and we’re getting attention.”
Following the plan set out by the Roundtable to reset Delaware’s strategy, DPP isn’t swinging for grand slam projects from Fortune 500 companies, but instead looking for mid-tier and smaller tier companies that could grow into, or be acquired by, bigger companies.
“One of our most exciting projects is a very large life science opportunity that would be, if we win it, one of the largest investments made in Delaware in decades, and it’s a company that wouldn’t be a household name,” Foreman said.
The desire to land corporate headquarter projects that marked Delaware administrations dating back decades, including AstraZeneca, Incyte, Chemours and Corteva, is not something that drives Foreman, who argues that companies today are easily acquired and jobs transferred.
“People are still, I think, under that old rubric that you want the headquarters because those jobs pay a lot, but that can change very quickly,” he said, noting that today a headquarters could be home to just two dozen executives, while production facilities elsewhere employ thousands.
DPP has frequently assisted and landed smaller projects employing dozens of employees, including hemp processor AgroRefiner and pet food manufacturer JustFoodForDogs in New Castle, ad agency Carvertise in Wilmington and manufacturer Shoreline Vinyl in Cheswold.
“Sometimes a small project can make a real difference. It might only be 60 jobs, but that’s actually the trigger for a whole bunch of other things to happen,” Foreman said.
Future is bright
With several high-profile wins already, Foreman remains bullish on a handful of different sectors for Delaware’s future from financial services to the sciences, manufacturing to distribution and logistics, pointing to significant wins in each of them in the past few years.
“I’m a naturally optimistic person, but I truly think that Delaware’s next few years look very bright,” he added.
Like a manufacturing line that has established its process and found its success, Ward said that DPP’s task now was to continue to execute and find the small tweaks that can improve outcomes.
“DPP is the folks who tell that Delaware story outside of the state, so that just takes time and consistency,” he said. “That’s really the challenge.”
The governor agreed with his colleagues’ assessments, adding that he believed Delaware has a bright future in advanced manufacturing, financial services and the sciences, among other sectors. He added that the success in those efforts will be easier to achieve with all of the partners involved.
“Just having these business leaders around the table, driving our efforts and focus, whether it’s on attraction or retention or whether it’s on workforce development, is just incredibly important,” Carney said.