Why Should Delaware Care?
A taxpayer-funded grant has been approved to retain more than 200 well-paying jobs in the state. It is likely that wage taxes from those jobs will more than make up for the grant, however, at a time when state revenue is being questioned.
A state board approved a $1 million grant in taxpayer funds on Monday to retain about 200 high-paying administrative positions for Corteva AgriScience, a spin-off company from the former DowDuPont merger.
The decision over spending public funds to keep jobs that were likely to cover the assistance comes amid heightened scrutiny and concern over revenue in the state. Last week, Delaware’s independent financial advisers predicted that the state could see a reduction of $150 million in next year’s budget due primarily to drops in corporate income taxes on the back of federal tax reforms.
Corteva’s lease at the DuPont Chestnut Run campus west of Wilmington was set to expire at the end of the year, and the company had been exploring options for a new office when it settled on the Brandywine Building, a high-rise office building in downtown Wilmington owned by Buccini/Pollin Group.
Corteva, whose employees live around the region, had also reportedly been exploring office options in the Philadelphia suburbs.
The company will move all 205 employees to two floors in the Brandywine Building by early next year, spending about $4.3 million to lease and outfit the space. It has reportedly signed a 10-year lease with BPG.
The public funding for Corteva comes at a complicated time for the company though.
Borne out of Dow’s seed production and DuPont’s fertilizer work, today Corteva is a major producer of genetically modified (GMO) seeds, including the leading Pioneer brand for corn and soybeans. It was spun off as its own company in 2019.
While its headquarters was based near Wilmington during the DowDuPont era, it was moved to Indianapolis three years ago in order to be closer to its Midwest production hub.
Earlier this month, the company announced that will once again split, this time spinning off its seed business as a new company while herbicides and pesticides remain under the existing Corteva. Both companies will have an administrative presence in downtown Wilmington, said Rick Deadwyler, Corteva’s Eastern region government affairs director.
Only lingering ties to Delaware
While Corteva has more than 20,000 worldwide employees, however, there is little still tying Corteva to Delaware. It’s last DuPont-linked CEO, Jim Collins Jr., was ousted with investor pressure in 2021.
The company does not rank within Delaware’s Top 50 employers, according to Delaware Business Times’ records, nor does it have any major production sites here.
Aside from the Chestnut Run executive offices, Corteva maintains about 100 employees at research-and-development labs owned by FMC at the Stine-Haskell campus in Newark, officials said.
What it lacks in production sites or headcount though, it makes up for in well-compensated executives.
Eleven members of Corteva’s executive leadership team are based in Delaware along with divisions for accounting, auditing, legal, procurement, pension management, human resources, investor relations, tax compliance, and more, according to Taryn Albert, the company’s facilities services and real estate manager.
Of those employees, Delaware compensation reportedly totals more than $35 million annually, with the average salary of the retained jobs being $184,000 a year.
Without adding in tax deductions, that total compensation could bring in more than $2.3 million in income taxes alone for Delaware.
“Retaining Corteva’s 200-plus, high-paying jobs is important for the state’s sustained tax welfare and economic stability,” said Megan Kopistecki, senior manager of business development for the Delaware Prosperity Partnership, the state’s public-private economic development organization.
The move of those jobs to downtown Wilmington, where they would also be subject to the city’s 1.25% wage tax, is also a shot in the arm for city coffers. They add to about 800 jobs being brought into the city by pharmaceutical giant Incyte.
“As major employers like Corteva and Incyte center operations here in the city, it’s clear that Wilmington is a place where business and innovation can thrive,” Mayor John Carney said in a statement. “Corteva is an important component of Delaware’s economy and workforce. We’re proud to welcome them to our downtown community, and we’re committed to building on the momentum taking shape across the city.”
What taxpayers offered
On Monday, the Council on Development Finance, an appointed body that oversees the use of public funds to attract or retain jobs and commercial projects, approved a $500,000 grant to Corteva to retain its staff in the state for at least the next few years.
Employment grants through the Strategic Fund are reimbursable, requiring an employer to hold jobs in the state to continue receiving the total value of the public funding.
The company also was approved for a $500,000 goods and service grant, which serves as a reimbursable for renovation costs but also requires that an employer use Delaware contractors and companies when able. Companies have to submit invoices and documents proving they used Delaware companies, or at least made a good faith effort to do so, according to the Division of Small Business, which oversees the administration of Strategic Fund monies.
According to Corteva’s most recent quarterly report, the company held more than $2 billion in cash or equivalents as of June 30.
Correction: This story originally reported that Corteva’s spin-off company would focus on fertilizers and pesticides, but that is incorrect. It will focus on herbicides and pesticides. We regret the error.
