Levin’s departure from the Delaware Economic Development Office not a surprise

News that Alan Levin will step down as head of the Delaware Economic Development Office did not come as a big surprise. Doug Rainey of the Delaware Business Daily weighs in.

Here is Doug Rainey’s commentary:

News that Alan Levin will step down as head of the Delaware Economic Development Office did not come as a big surprise. After all, during second terms cabinet members often depart as the governor’s final term winds down.

Levin sold the Happy Harry’s drug store chain to Walgreens several years ago after insurers dragged their feet on prescription payments and did not need to come to the office every day.

Many are surprised that Levin – a Republican in a Democratic administration who previously weighed the possibility of running for governor on the GOP ticket – stayed around as long as he did.

Levin will leave the post at the end of June to become a senior advisor to the SoDel Concepts restaurant group founded by his friend, the late Matt Haley.

The coastal Sussex restaurant group employs 500 and has plans to expand beyond the beach. Levin will aid the company in maintaining and building on Haley’s local and international charitable mission.

Good soldier at DEDO

Throughout his time at DEDO Levin remained a good soldier; even though he could not have been happy with the anti-business tendencies of some Democratic legislators in Dover and the powerful influence of organized labor.

His boss, Jack Markell, often had to thread the needle in dealing with a party that had shifted to the left while enjoying solid majorities in both houses.

As Markell’s final term winds down Levin is able to breathe a little easier. The Delaware unemployment rate has dripped well below 5 percent. Job growth figures, while subject to debate, are among the strongest in the region.

It’s a marked contrast to the dark days in 2009 when Markell took office and, in a widely praised decision, nominated Levin to serve as head of the Economic Development Office.

Markell and Levin were faced with the loss of a few thousand jobs when both auto plants closed their doors, as the industry departed the East Coast. A downdraft in oil prices and management miscues led to the closing of the 500-employee Valero refinery in Delaware City. Demolition was imminent.

Later on, AstraZeneca, facing the loss of patent protection from its blockbuster drugs, essentially eliminated research and development work in Delaware and announced plans to slash more than 1,000 jobs at its Wilmington headquarters.

The dream of a 5,000-employee pharma giant in Delaware had evaporated in the years since a generous financial package and road improvements brought the North American headquarters of the Anglo-Swedish company to the state. The reality became a couple of thousand jobs at a mid-sized pharmaceutical company in turnaround mode.

DEDO had taken a beating

DEDO itself had taken a beating from an earlier purge of veteran staffers during the final term of Gov. Ruth Ann Minner. The 2006 firings angered legislators and came at a bad time as the economy headed for a slowdown and near collapse in 2009. Much expertise and institutional memory was lost.

Levin brought in Whaley and another Happy Harry’s alumnus. All worked to turn things around at the agency.

One early victory came with the reopening of the refinery under the ownership of PBF Energy, a new company headed by wily refinery veteran Thomas O’Malley.

A state financial package helped seal the deal and saved upwards of a thousand jobs at the refinery, contractors and suppliers.

On the other hand, the effort to reopen the former GM Boxwood plant under the ownership of Fisker Automotive failed. The state kicked in $20 million and the Department of Energy came up with hundreds of millions of dollars in loans. It was all for naught as the hybrid auto producer ended up in bankruptcy court.

A lot of Monday morning quarterbacking of the actions of Markell, and to a lesser extent Levin, has taken place since that time. But many critics, some of whom endorsed the Fisker financial package, conveniently forget the desperate condition of the economy at that time.

Bloom Energy is another cautionary tale. While the plant in Newark is now turning out fuel cells in a corner of the former Chrysler site in Newark, employment is running below forecasts.

Delmarva Power ratepayers are also paying an extra $3 or more a month for electric power from Bloom fuel cells. Despite the fact that those costs were fully disclosed to legislators and the public, there continues to be widespread criticism of the added charges.

Even with these disappointments, Levin and Markell were able to score a number of victories that included the continued growth in the financial services sector.

JPMorgan Chase has added thousands of jobs in Delaware and bought the surplus south campus of AstraZeneca. JPMorgan staff are expected to move to that site later this year as other banks have also added jobs or maintained existing positions.

Over the past few years other companies across industries have expanded or relocated to the state, including: Amazon, Baltimore Aircoil, Atlantis Industries, Calpine, Johnson Controls, ILC Dover, Allen Harim, Kraft Foods, Miller Metal, Mountaire Farms, PTM Manufacturing, Purdue, Navient, Sallie Mae, and Testing Machines, Inc.

However, battle for jobs will continue, perhaps with less help from a General Assembly that seems more focused on social issues than on economic growth.

Not in my backyard forces are also an issue as demonstrated by the Data Centers dust-up in Newark and the expansion plans of poultry producer Allen Harim in Sussex.

The University of Delaware ended up terminating the lease on the $1.1 billion Newark project amid claims of belching smokestacks and other questionable claims from environmental activists working with neighbors.

We also have the issue of disappointing revenue estimates – it is clear that income tax revenues have yet to fully recover from the downturn.

The gloomy view of Tom Gordon

New Castle County Executive Tom Gordon, who has issued gloomy economic pronouncements in the past year or so, has launched a long-term economic development strategy. The county, often indifferent or hostile to economic development, is now working to retain or attract employers.

Gordon has championed a long-shot effort from longshoremen to expand the Port of Wilmington to the south, perhaps with a revitalized Boxwood plant churning out products for export. The strategy, which comes with no input from DEDO, is viewed in some quarters as a cornerstone of an upcoming gubernatorial campaign by the county executive.

Levin, who chairs the Diamond State Port Corp., the state entity that operates the Port of Wilmington, had earlier seen the collapse of an effort by the Markell administration to privatize the port.

Levin’s plan, which had, at best, lukewarm support in Dover or in the port community, reflected the limited resources available to the state in expanding one of the few sources of good blue collar jobs. The Gordon plan hints at Wall Street financing for its project, but details remain vague.

In the meantime, praise is pouring in for Levin and his efforts to aid the state’s economy. There is even talk of Levin running for governor, a remote possibility at best.

Whatever happens, business, government and nonprofit leaders will keep Levin’s phone number handy. The need is greater than ever for his unique blend of skills and experience.

 

 

Doug Rainey is the editor of the Delaware Business Daily. He has reported on Delaware business for 25 years. Email Doug at drainey@delawarebusinessdaily.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .  Follow Doug on twitter: https://twitter.com/DougRaineyDE.

 

Alan Levin visited the First studios this week to look back at his time in office, the good and the bad, and what’s next for him after he leaves, you can watch the interview below.