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State considers new manufacturing grant program

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Hologic manufacturing Glagow Delaware MISI grant CDF DPP

A worker repairs a detector unit in a Hologic 3Dimensions unit at the Glasgow plant. A new proposal looks to establish a grant fund that would support manufacturing investment in the state. | DBT PHOTO BY JACOB OWENS

BEAR – The Council on Development Finance (CDF), the state’s job investment board, tabled a proposal Monday by the Delaware Prosperity Partnership (DPP) to carve out a new $5 million Facility Modernization Investment Support Initiative (MISI) within the taxpayer-backed Strategic Fund.

The special fund would be available for companies to upgrade existing manufacturing facilities within Delaware that might otherwise fall behind competitive sister facilities in other states or countries.

Calling the fund “preventative maintenance,” Kurt Foreman, president and CEO of the public-private organization that leads economic development efforts in the state, was seeking the $5 million figure to use as a pilot program for 2024.

As outlined by Foreman, MISI would encourage existing companies to “keep Delaware operations competitive for the near term and future by supporting key upgrades,” with the state providing 20% of a proposed project cost through reimbursable grants. The minimum grant would be $200,000 while the maximum would be $1 million. DPP estimated the $5 million would leverage private investment of at least $25 million.

“In the duck-duck-goose game, we don’t want to be the goose,” Foreman said during his presentation.

While CDF members generally expressed support of the concept of keeping Delaware facilities competitive with out-of-state operations, they raised questions about whether a separate MISI fund was necessary and, if so, how it would be used. It was noted that a dedicated MISI funding would tie up 20% of the total Strategic Fund budget that also funds job performance, capital improvement, workforce training, and lab space development grants.

Foreman explained that MISI was only intended for companies with manufacturing facilities in Delaware that “need critical equipment and facilities upgrades” that would allow them to maintain current product lines and be considered for new product introductions.

When asked about companies that might “do saber-rattling” about layoffs or shutdowns, Foreman replied that “MISI is intended to ensure we don’t get into that situation.”

He also said grants shouldn’t be given to facilities “already on a downward trajectory” and agreed there would have to be “claw back” provisions for the state to get funds back if the company closed the facility prematurely.

CDF Chair Fred Sears II expressed concern about the proactive nature of the MISI plan, which could involve searching for eligible companies to apply for grants, and at one point he commented that “MISI sounds like a sales tool.”

CDF member Kevin Kelly argued that the proposal as presented lacked detail and termed it “quite nebulous.” He added that it needed “more stringent qualifications. We need measuring sticks.”

Kelly’s colleague Jack Riddle asked why competitive plant upgrades proposals couldn’t be routinely considered for the Strategic Fund as a capital improvement grant, without establishing a new program carveout. Some other members echoed that thought.

Rather than vote on the MISI proposal at the meeting, Sears moved to table it until the next council meeting on Aug. 28, asking Foreman to come back with more detail.

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