Grants aimed to attract science and tech companies to state

Delaware has launched a pilot grant program designed to spur private sector-led projects to help the state attract and retain science and tech companies by expanding its inventory of ready-to-go lab space.

The state’s Council on Development Finance allocated up to $3 million from the Delaware Strategic Fund in December. Gov. John Carney committed to including additional funding from the FY22 budget during his Jan. 26 State of the State address.

Delaware Prosperity Partnership is ready to begin vetting companies to ensure they are at the right phase to qualify for the grant. Companies will need to be partnered with developers on a specific project to apply. The state will begin reviewing qualified applicants as soon as they have cleared the vetting process, said DPP Director of Innovation Ariel Gruswitz. Companies or developers interested in learning more or applying for the grant may contact Gruswitz at agruswitz@choosedelaware.com.

“We’re dealing with a two-pronged challenge,” Gruswitz said. “We have a shortage of ready-to-go lab space, which is a growing challenge that faces every state because of increased demand from bioscience companies. Secondly, many Delaware developers have not, to date, undertaken these types of projects due to the complexity and higher costs to increase lab space inventory.”

Some of the companies DPP wants to help do not have the cash flow to justify building out lab space and are more inclined to use their capital to get their products to market, Gruswitz added.

“We’re looking for companies that need support as they get their products ready to commercialize,” she said. “We want to improve the available inventory in the state and continue to support companies we’ve already invested in or that are interested in coming to Delaware with the types of high-paying jobs we see with these sorts of operations.”

In the long run, Gruswitz said, the need for the program should decrease as infrastructure increases and industry needs are better understood by the local commercial real estate market.

The CDF previously has supported efforts by the state to build out space for early-stage ventures, including two incubators with wet labs: Delaware Innovation Space and DTB@STAR, an affiliate of the Delaware Technology Park. In addition, Delaware is home to several large global leaders in research and development, with firms including Gore, FMC, DuPont, Chemours and Incyte.

The challenge is what happens to the successful startup when it grows and needs to expand out of the incubator or other early-stage space. This pilot program is an important next step in supporting startups as they continue to grow in Delaware.

The new program will offer grants to companies of up to 33 percent of the fit-out costs for lab space, with the developer agreeing to make good-faith efforts to fill the space with lab tenants if the original user grows out of it or has another reason for moving. In the event those efforts aren’t successful, the state will provide the building owner with a portion of the lost rent as a stopgap measure. This will ensure that the infrastructure remains intact as an asset in the state to support continued industry growth.

From 2018 to 2019, DPP assessed inventory and surveyed more than 60 Delaware organizations to gauge current and future lab-space needs. Roughly a dozen of the responding existing entities identified a need for at least 150,000 additional square feet of lab space over the next few years, Gruswitz said.