Why Should Delaware Care?
One of Delaware’s largest companies has sold its offices less than two years after moving to Wilmington, abandoning a project that looked to reenergize the city’s downtown and was heavily backed by taxpayer dollars. After negotiations, almost 80% of the original grant will be returned to the state and used for a new fund to support other businesses.
Months after local pharmaceutical giant Incyte abandoned plans to move its headquarters to Wilmington, state officials reallocated millions of grant dollars from the project to a new initiative to support small businesses.
The change in direction — from supporting one of the largest commercial projects in recent years to starting an expanded grant program for small businesses — is in line with Gov. Matt Meyer’s approach to economic development.
State leaders recently struck a deal to shrink Incyte’s taxpayer-funded relocation grant to $2.8 million, down from $14.7 million. Those funds will function as a job creation grant for the more than 200 employees moving into the building.
Delaware’s Small Business Director CJ Bell called the negotiations to amend the deal “smooth.”
As part of its restructuring of Incyte’s grant, the state reallocated $4.5 million to an economic development initiative to revive business districts around the state. The rest of the money will return to the state’s Strategic Fund, which supports business expansion in Delaware.
“This was an opportune time to take advantage of Incyte and their good collaboration with us,” Bell said.
What happened to Incyte project?
For more than a decade, Incyte has maintained its corporate headquarters just outside Wilmington’s city limits in the Alapocas community.
Buoyed largely by sales of successful cancer drugs, the company in recent years had attempted to grow the existing campus, but faced resistance from neighbors.
In light of the opposition, state and city officials began to collaborate then on a pitch to persuade the company’s leaders to instead expand downtown.
The efforts proved successful when Incyte announced in the spring of 2024 that it had purchased the pair of Bracebridge office buildings — which once served as a home for the credit card giant MBNA — for its global headquarters.
The nearly $50 million purchase was seen as a significant win for the city because the largely empty buildings had long weighed on the city’s office market.
Following the purchase, Delaware state officials awarded Incyte with nearly $15 million to help it pay for the move into Wilmington. During a meeting of the state committee that approves such subsidies, Kurt Foreman, then the head of Delaware’s public-private economic development, said the deal could lead to the creation of 866 new jobs in Wilmington’s downtown core.
Months after the state’s grant approval, Wilmington officials quietly awarded Incyte another $10 million for the expansion.
During the remainder of 2024 and through 2025, Incyte spent nearly $29 million on a renovation of its new properties, according to a company earnings report.
Then, at the start of last winter, the work appeared to cease.
The stoppage came just months after Incyte had selected Bill Meury, a pharmaceutical executive with ties to Boston-area startups, as its new CEO, replacing longtime leader Hervé Hoppenot, who signed off on the deal with Delaware leaders. Weeks after assuming the helm, Meury stated the company would take “a fresh look” at its business, including its capital allocation, according to a report from Reuters.
By February, Incyte publicly announced its scaled-back expansion plans through a series of media interviews in which officials said the company would sell the Bracebridge buildings to BPG, then lease back some of the space.
No new dollars will be flowing to BPG as part of their now-reduced investment into the Braceridge complex, Bell told Spotlight Delaware.
City officials also clawed back some grant money from the company.
As part of an amended agreement with the city, Incyte returned $5 million, but it may retain the other $5 million if the company employs an annual average of 200 full-time employees at Bracebridge for a decade, a city spokesperson said.
New grant program
Meanwhile, the state is using $4.5 million in reallocated grant money to create the Delaware Commercial Corridor Initiative, a program to support brick-and-mortar businesses — or what Bell calls the “missing middle.”
The program will operate as an expansion of the long-running Downtown Development Districts program, which grants taxpayer-backed funds to businesses in a handful of historic central business districts across the state to improve and sustain the commercial areas.
To be eligible, a recipient must be located adjacent to an established Downtown Development District or in a commercially developed corridor that is zoned for commercial or business use and located in a Level 1 or Level 2 Investment Area under the State’s 2025 Strategies for State Policies and Spending. That way applicants cannot double-dip into existing grant programs, officials said.
Businesses may apply for funding for interior renovations, exterior and facade improvements, equipment purchases and code compliance upgrades, b building purchases and rent expenses are not eligible.
The new program will outsource the decision-making to a bank or financial institution in each county. Grants will cover 10% to 25% of a project’s cost, up to $25,000 per business, with the remaining project financing provided through private lending institutions.
Bell expects the first round of funds to go out to lenders by the end of September, after what he hopes will be a competitive bidding process.
