State panel awards $9.6 million to DuPont

Matt Bittle
Posted 3/8/16

NEW CASTLE — A state committee elected to award $9.6 million to DuPont Monday, part of the efforts to keep planned DuPont spinoff companies in Delaware, officials said.

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State panel awards $9.6 million to DuPont


NEW CASTLE — A state committee elected to award $9.6 million to DuPont Monday, part of the efforts to keep planned DuPont spinoff companies in Delaware, officials said.

The Council on Development Finance voted unanimously to approve the amount requested by the company to help cover costs of capital projects and salaries.

DuPont will receive $6 million in matching funds for construction and a $3.6 million grant to keep jobs.

DuPont, which began in Delaware more than 200 years ago, announced in December plans to merge with Dow Chemical and form three spinoff companies centered on agriculture, specialty products and material sciences.

Delaware officials were concerned that the state could lose thousands of jobs and millions of dollars in revenue. They planned new incentives and tax changes as a way to keep the local footprint strong.

Delaware was able to successfully woo the agriculture spinoff, meaning it will house both the agriculture and specialty companies, a major victory for the First State.

Grants and supporting funds were also promised and the approval Monday indicates the state is following through on its promises, a spokeswoman for Gov. Jack Markell said.

“We believe the structure that we’ve announced here will allow the intended companies to establish a very strong foundation for the future, certainly around sustainable growth, both short- and long-term, which in turn creates long-term opportunities for our global employee base and certainly for the global community here in Delaware,” DuPont Executive Vice President James Collins said at the meeting.

“Now, the decision to locate the agricultural company headquarters in Wilmington was made following a pretty competitive process among the other cities and states that were mentioned pretty prominently. It was a constructive process and it was certainly a very collaborative process that we ran with the state.”

Monday’s meeting lasted less than half an hour with Delaware Economic Development Office Director Bernice Whaley and Mr. Collins laying out the details of the request and answering some brief questions from council members.

In response to a query from Rep. Bryon Short, D-Arden, officials said the money will provide a sizable return on investment for Delaware. At least $20 million in income tax alone will be paid to the state over the next three years, according to DEDO, with the award saving 1,700 jobs.

DuPont will also spend up to $200 million to refurbish buildings and potentially build new structures for its headquarters.

Mr. Collins said the money will “bring to life the vision that we have for these intended companies to be highly focused, stronger and certainly more competitive, more resilient and better equipped to deliver the growth and long-term sustainable value,” and Sen. Nicole Poore, a New Castle Democrat and committee member, opined that it could help “stop the bleeding.”

Afterward, Rep. Short said he is not enamored with giving breaks to large companies but believes it is sometimes necessary in the current economic climate.

“For me, it’s really a numbers issues. We’re creating a grant for 9 million, we’re getting at a base back $20 million, and then there’s substantial growth from that,” he said. “Is it a situation that I want our state to be in? No, I don’t want that back-and-forth, and states are going to have to figure that out over time. But until we create a different system, we need to look for opportunities for new growth in our state and protect the jobs that we have.”

The Dow-DuPont merger is expected to be finalized during the second half of 2016. Creating the three individual companies will take about 18 to 24 months, Mr. Collins said.

The grant is contingent on Dow and DuPont merging. Bloomberg reported Sunday German chemical company BASF was considering bidding for DuPont.

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