[caption id="attachment_235044" align="aligncenter" width="1200"] Major industrial developments, like Duck Creek Business Campus near Smyrna, could benefit from an increase in the maximum grant allowed under the Site Readiness Fund. | DBT PHOTO BY KATIE TABELING[/caption]
BEAR – Two years after the launch of the Site Readiness Fund to support the development of speculative commercial projects around the state, Delaware’s public-private economic development organization wants to raise the limit on that aid.In 2021, Gov. John Carney’s administration pushed the state legislature to create a fund for grants, loans or other economic assistance to businesses or public entities that invest in constructing, renovating, or improving infrastructure for sites that would attract job-creating projects. The goal is to get sites ready for development within six months to a year.Since its launch, the fund has supported 19 projects with $18.8 million in grants, ranging from smaller mixed-use projects to very large industrial parks to life science research campuses. In total, the projects cover 1,500 acres in the state and would produce an estimated investment of $500 million, if fully completed.Developers have two years after signing the grant agreement to complete the work and draw the reimbursed grant funding.Now the Delaware Prosperity Partnership, which leads the state’s economic development work, is proposing to create five different grant tiers aimed at developments of differing size from 10 acres to more than 150. They sought to reduce the Level I maximum planning grant by 50% to $50,000 for the smallest parcels and retain the full $100,000 payment for the largest ones.They also wanted to increase the maximum Level II site work grant to $2.5 million for the largest properties with a $750,000 cap for the smallest ones. Currently, the maximum Level II grant allowed for a project of any size is $1 million.
[caption id="attachment_235043" align="alignright" width="300"] Kurt Foreman, president and CEO of the Delaware Prosperity Partnership, said his organization was concerned with keeping options open for employers. | DBT PHOTO BY JACOB OWENS[/caption]
“The dollars just don't go very far if the site is a large site. It works easily on a small site, but on a larger site there's a lot more that has to be done typically,” Kurt Foreman, president and CEO of the DPP, told the state’s Council on Development Finance, which oversees the fund, on Monday. “We want to make sure that we've got the next wave of projects.”The Site Readiness proposal from DPP comes at a time when financing costs for construction are at recent highs, and some of the largest e-commerce users like Amazon have scaled back their networks. The global warehousing market is still expected to grow by a compounded annual growth rate of about 5% though.“I think it's worth considering because there are some larger sites that haven't gotten very far because the needs are much larger than the money that they could and we could put forward so far,” Foreman said.DPP is in favor of retaining current requirements that developers provide at least a 1-1 match of approved grant funds and a minimum site size of 10 acres.The changes to the lower limits of the Level I grant funding drew the most scrutiny by the CDF on Monday, with several members saying they were in favor of retaining a $100,000 maximum for planning phases of even the smallest projects.“I don't see any value in disincentivizing small developments by cutting that Level I grant,” said Jack Riddle, president of Community Bank, noting that he’s seen small projects rack up large site planning bills in recent years.The CDF also questioned whether prior grant recipients would be eligible to come back for a second grant if new maximums were allowed, and Foreman said that he would support allowing past recipients to apply for the difference between their first grant and a potential maximum second.Fred Sears III, the chairman of the CDF, said he disagreed.“If they're into this project, they're going to have to find a way to finish the project rather than come back to us for a second dip,” said Sears, who concurred with board member Nancy Cook.The CDF voted to table the proposal until at least January, when they can review project updates for all of the 19 projects approved to date.
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