CDF doles out $4.5M in taxpayer-backed grants to five companies, including Pepsi

The Council on Development Finance (CDF) has approved nearly $4.5 million in taxpayer-backed grants, including nearly $2.9 million to Pepsi to “Pepsify” a 359,000-square-foot warehouse in Claymont.

CDF is an advisor to the Delaware Economic Development Authority (DEDA). It is responsible for conducting public hearings before DEDA issues any bonds or provides other financing support to projects. Other applicants who received approval on Dec. 9 from CDF were:

• $1 million for a site-readiness grant to a Felton-based LLC led by custom homebuilder Jeff Garrison to support its efforts to develop a business park at the site of the former Felton Drive-In with 150,000+ square feet of commercial manufacturing and flex space
• $334,578 to SATYS Aftermarket Delaware, which plans to add 40 jobs in Delaware after it takes over the ILG Paint Hangar facilities in New Castle to provide paint services to the business jets market.
• $252,100 to Encompass Elements, a Lansdale, PA, marketing company that plans to consolidate its two warehouses into its existing New Castle location and add 53 jobs in Delaware over three years.

In addition, CDF approved a request from Newark-based Aqua Science, a women-owned business led by Iwona Evans, that asked CDF for a $50,000 grant to help it take off from a longer development runway.

“I was particularly happy to see the site readiness grant for the Felton project and the Aqua Science bridge grant,” said Kurt Foreman, president and CEO of the Delaware Prosperity Partnership, which was created to be the state’s economic development agency. “We are all building a toolkit that helps develop ways to encourage growth. In the case of the site-readiness grants, the state has done 23 of those over the past three years, helping all three counties capitalize on growth opportunities.”

Foreman said interest in Delaware has picked up in the past 3-4 months, and the economic development agency now has 54 projects representing $4B in potential investment — an all-time high.

In most cases, CDF made capital expenditure (Capex) grants representing 3 percent of the planned capital expenditures and Jobs Performance Grants that are performance-based funding for employee relocation and retention.

PepsiCo Beverage Sales

Details about the warehouse plan were first reported on Delaware Live. PepsiCo Beverage Sales, the wholly-owned subsidiary of PepsiCo Inc., plans to expand its warehousing operations in Delaware to serve customers in the Northeast United States. It has outgrown its current facility on Governor Printz Boulevard. The new warehouse will be across Philadelphia Pike from the new train station in Claymont as part of the multi-use First State Crossing development at the site of the former Evraz Claymont Steel plant.

The $2,887,000 in grant financing includes a Capex grant of $1.86M (representing 3 percent of the $62 million in capital expenditures). It also includes a $1,027,000 performance/retention grant tied to retaining all 216 existing Delaware-based employees and moving them to the new warehouse at 4145 Philadelphia Pike next year and adding 77 net new jobs from its existing Pennsylvania and New Jersey locations for a total of 293 jobs by 2027.

Asked whether PepsiCo needed the grant financing, Foreman said, “It’s not about need. If it is about need, it’s probably not a good investment. It’s about incentivizing where the jobs and investment will happen. In the case of Pepsi, the question was how do we put Delaware at the top of their list of three potential states.”

Felton Drive-In LLC

In its application, Garrison and his partners estimated that their new Felton Crossing business park could ultimately employ up to 500 people.

Kent County officials in May approved the construction of six buildings on eight acres of land at the closed-down Diamond State Drive-In. Garrison expects to request additional approvals for buildings on another 18 acres he recently acquired.

The developers expect to build one 60,000-square-foot warehouse, with the rest under 10,000 square feet. That would indicate they could offer up to 14 buildings, given that Felton Crossing is expected to offer 200,000 square feet of manufacturing or distribution space.

Satys Aftermarket Delaware

Satys will invest nearly $1.3 million in facility improvements and equipment to establish an aircraft paint facility and training hub in a vacant hangar at Wilmington Airport – ILG that had previously been occupied by Dassault and used in a similar capacity.

The facility will serve the business jet market in the eastern United States and Canada.

Satys is a French industrial group with operations in 13 countries worldwide. It has operated in the United States since 2017, working with Boeing and Dassault, among others.

Satys’s operations at ILG will bring more than $500,000 annually in lease revenue to the Delaware River and Bay Authority (DRBA), which operates the airport. This revenue will support ILG operations and capital improvements as required by Federal Aviation Administration regulations. In addition, Satys’s location at ILG will expand the fuel service and maintenance work markets for local fixed-base operators in those fields, according to a DPP release.

In its application, Satys said it will bring 40 full-time jobs to Delaware, including 10 who will be relocated from its other U.S. location.

Satys received Jobs Performance Grant of up to $296,262 and a Capital Expenditure Grant of up to $38,316 from the Delaware Strategic Fund. Distribution of these grant monies is dependent on the company meeting commitments as outlined to the CDF.

“Satys is a global leader in aeronautics painting and surface treatment, and the DRBA is pleased to welcome them to Wilmington Airport,” said DRBA Executive Director Thomas J. Cook.

Encompass Elements

Encompass Elements, a Pennsylvania-based marketing-fulfillment company, will use its $252,100 grant to consolidate operations in Delaware, bringing 22 jobs from Lansdale over the next six months and creating 31 new positions over three years.

A Certified Women’s Business Enterprise, the company asked CDF to support its $3.2 million relocation and expansion at 1500 Johnson Way, which currently employs 21 warehouse employees. DPP collaborated with Encompass Elements for several years as the company explored its options. On Monday, DPP supported the company’s request for a Jobs Performance Grant of up to $188,000 and a Capital Expenditure (Capex) Grant of up to $64,100 from the Delaware Strategic Fund.

Encompass manufactures marketing collateral and provides direct mail, product sampling, over-the-counter fulfillment, and other services to pharmaceutical, retail, insurance, and direct mail clients.

Jobs new to Delaware will include lettershop and print machine operators and managers; customer service representatives; executive, management, and administrative professionals; and marketing fulfillment and warehouse associates, according to DPP.

“We expect to move over the next six months, pending the grant request outcome,” CFO Gene Pfeiffer told Delaware Live on Dec. 4. The company’s 152,000-square-foot New Castle facility is double its Pennsylvania location, with room for future expansion.

Aqua Science

The company, founded in 2020 by Iwona Evans, develops and manufactures custom reagents, including its core technology, bioluminescent reagents, which are used to test the toxicity of water.

RELATED: ​​Aqua Science Owner Iwona Evans survived a career pivot and pandemic launch

Its $50,000 grant is a part of the Delaware Technical Innovation Program, which offers transition grants for companies that have completed Phase I and applied for Phase II of the federal Small Business Innovation Research or Small Business Technology Transfer (SBIR/STTR) programs as they work to bring new products to market.