DuPont, UD, state officials to launch business incubator

DuPont Co. is teaming up with the University of Delaware and Gov. John Carney's administration to launch a business incubator near Wilmington that some hope could become ground zero for the state's new economic development paradigm.

Known as Delaware Innovation Space, the 100,000-square-foot hub for dozens of early-stage, science-based startups will be housed in Building 500 at DuPont's Experimental Station in Alapocas.

Management of the incubator space would be handled by a separate nonprofit governed by a six-member board of directors made up of representatives from all three partners. They expect the first tenants to move in this summer.

"This partnership between private business, academia and the state is precisely the recipe for economic growth that has proven successful in other regions across the country," said Bob Perkins, executive director of the Delaware Business Roundtable. "It's an enlightened approach that will create opportunities for an entrepreneurial ecosystem to grow and create the future jobs our state needs."

STORY: Executive pay, worker safety top items at last DuPont meeting

STORY: New program connects young adults without degrees to jobs

A group of 50 local chief executive officers, the business roundtable has been pushing for Delaware to focus moreof its economic development resources on creating fertile ground for entrepreneurs, involving the private sector in economic development decisions and easing bureaucracy that hampers new investment. Carney is weighing recommendations that call for him to hand over many of the state's economic development efforts to a similar public-private partnership.

All three partners in the Delaware Innovation Space will contribute startup funding and ongoing support to the roughly $25 million project, state officials said.

DuPont will pitch in $1.25 million in initial funding, real estate valued at $15 million and $2 million worth of lab equipment. UD will add $1.5 million over three years, grant-writing support and a steady stream of on-site workshops and seminars led by its faculty.

Carney, meanwhile, has promised to deliver a $5 million, three-year taxpayer grant, along with help in attracting companies to locate at the Delaware Innovation Space. The state grant is expected to be approved Monday by the Council on Development Finance, a public body that weighs in on whether the state's economic development office should give final approval to corporate incentive packages.

The council rarely, if ever, votes down a proposed grant or loan. Andy Lubin, who chairs the council, also acts as Carney's liaison to DuPont and previously served as UD's director of real estate.

Officials with DuPont, UD and the state declined to be interviewed Friday. Instead, they released a joint statement saying more information would be provided after Monday's 9 a.m. Council on Development Finance meeting at the Buena Vista Conference Center near New Castle.

The three partners are expected to hold a press conference late Monday where they will further flesh out the details of the project, sources said.

The deal comes as DuPont prepares to undergo a major transformation. The 215-year-old company that once built highways and schools in Delaware approved a $130 billion merger with rival Dow Chemical Co. last year that will create the world's largest chemical conglomerate.

Once Dow and DuPont consolidate, the newly merged company will split into three separate businesses. Two of those new companies — with focuses on agriculture and specialty products — will be based in Delaware. A third company in the material sciences industry will be based in Dow's hometown of Midland, Michigan.

DuPont CEO Ed Breen announced in January that the company is planning to spend $200 million on modernizing and upgrading the Experimental Station. The property, he said, will eventually house collaboration centers for DuPont customers and suppliers, along with third-party science companies.

A handful of other companies already occupy some space at the 150-acre facility. DuPont spinoff Chemours, the life sciences company Hygiena that purchased DuPont's food safety diagnostics business and Nemours Biomedical Research all lease space.

The 114-year-old Experimental Station is where some of DuPont's most famous products – Nylon, Kevlar, Tyvek and Neoprene – were discovered.

About 2,000 workers, including those in administrative and other functions, work on the site. However, the site was hit hard by layoffs. In January 2016, DuPont laid off about 200 highly paid scientists at the Experimental Station's Central Research and Development division. The layoffs were part of DuPont's effort to decrease expenses by slashing 1,700 positions in Delaware.

At the time, Doug Muzyka, senior vice president and chief science and technology officer at DuPont, said the layoffs were "the next step in the evolution of corporately funded R&D at DuPont."

"A project like this could be very useful and beneficial here in Delaware," said Michael Bowman, president of the Delaware Technology Park and a central figure in the state's bioscience industry.

"The state will get jobs out of the deal, UD gets an outlet for its research collaborations and spin-out businesses, while the future DowDuPont will get access to a first-hand view and access to the innovation being produced by tenants at this new incubator," he said. "Plus we, as a state, have a better chance of retaining some of the talent that's out there by giving them a place to build and grow their businesses."

The Delaware Innovation Space also comes at a time of transition for UD.

Under new President Dennis Assanis, the state's largest university has added a new 10,000-square-foot incubator at its Science,Technology and Advanced Research Campus in Newark. Now housing a dozen startups, the wet lab space is run by the Delaware Technology Park – a 26-year-old private-public partnership that has created more than 16,000 jobs.

UD also recently announced plans to build a 10-story office tower at the STAR Campus, a 272-acre property on the site of the former Chrysler assembly plant.

And the university soon will house the National Insitute for Innovation in Manufacturing Biopharmaceuticals, a $250 million federal project that will unite more than 150 universities, private companies and nonprofits from across the country. Those partners will collaborate to produce cutting-edge medicines based on organic material rather than synthetic chemicals.

All of those projects are designed to expand UD's ability to promote economic development, integrate academic research with commercial businesses and expose students to a wider range of real-world experiences with promising companies.

"These efforts are exactly what the state needs," Perkins said. "As a community, we have to take the assets we have and be sure we are properly utilizing them for future growth and job opportunities."

Contact business reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel.