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An Economic Force

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Joe DiPinto, WIlmington’s director of economic development, says about 60 percent of state tax revenues are generated by Wilmington and New Castle County. Photo by Tom NutterJoseph DiPinto pulls out a large aerial image of Wilmington. The map shows the confluence of the three waterways that flow by and through the city.

“The Swedes settled here because the lay of the land offered them shelter,” DiPinto says, pointing to a spot on the Christina River.

But it also offered something else the settlers would need to make a success of their venture in the New World: power. Water powered the mills that supported local agriculture, thus driving the economy of the city and state.

From those early flour mills to the gunpowder mills of DuPont Co. to, ultimately, a financial service industry that is tops in the country, Wilmington has always been about power. DiPinto, Wilmington’s director of economic development, sums it up.

“Without Wilmington, Delaware would be far more pastoral than it is today and would have been completely overcome by Philadelphia and Pennsylvania by now.”

Instead, Wilmington’s economy rivals its far bigger neighbor, and it drives the economy of all Delaware. It is a remarkable story.

The seeds of local industry were planted when those flour mills were established on Brandywine Creek. With the dawning of the Industrial Age, the Brandywine, along with the Christina River and the far larger Delaware, drove factories and served as conduits for shipping goods into and out of the state. Shipbuilding on the Christina, begun in the 19th century, and armaments manufacture during World War II developed a force of skilled workers for development of the automotive and chemical industries.

“The wealth that Wilmington generated led to the development of U.S. 13 and the construction of schools throughout Delaware, which knitted the state together, with Wilmington as its head,” DiPinto says. “Today about 60 percent of state tax revenues are generated by Wilmington and New Castle County.”

By law Wilmington is prohibited from geographical expansion, which means that growth goes upward, not outward. Enter the Wilmington skyline and the city’s post-industrial revolution: finance.

“The growth of the bank card business [in the 1980s] sent banks looking for a central location where they could be serviced by the legal community,” DiPinto says.

Wilmington’s location on the Northeast corridor was perfect. “Within a 120-mile radius of the city, we are surrounded by a population of some 35 million,” says Alan Levin, director of the Delaware Economic Development Office. “We have all the benefits of location without the onerous taxation of other areas.”

Assistant Secretary of State Rick Geisenberger points out that Wilmington is the only Amtrak stop in Delaware, which—with Vice President Joe Biden’s well known support—has raised its profile among those who have commuted through. “What has filled those office buildings are the law firms that have migrated here to assist the business needs of some of the top Fortune 500 companies that have now incorporated here,” Geisenberger says.
 

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An overt effort to capture the banking industry occurred through the Financial Center Development Act of 1981, which drew Chase Manhattan Bank out of New York and into Wilmington. Other large banks and credit card companies quickly followed, and the city soon became the center of the nation’s bankcard business.

With 60 percent of Fortune 500 companies headquartered in Wilmington, the city’s post-industrial revolution may be considered complete.

“We’re here because Delaware is the corporation capital of the world,” says Alan Stachura, senior manager for government relations for CT Corporation, the largest and oldest registration agent in the country. Nearly 33 percent of its operations for the entire country are centered in Wilmington.

Stachura cites three reasons for the concentration: “There is a great pool of people to draw from in Wilmington, as well as surrounding communities. Most major law firms are within walking distance of us and are central to our business. Finally, we’re part of the community here, with our own building and a presence that dates back to 1984.”

Wilmington’s value as a financial and corporate center cannot be underestimated. “The direct revenue benefits to the state exceed $775 million annually,” says Geisenberger. “That represents about 22 percent of our total revenue.”

The key to Wilmington’s and the state’s prosperity has become sustainability. And no single example of Wilmington’s commitment to sustained development is better than the city’s evolving Riverfront.

DiPinto recalls being dispatched to investigate downtown San Antonio’s Riverwalk, a model for re-making the city as a live-work-play community. Wilmington created its own version. “Riverfront is a big investment for the city,” DiPinto says. “It generates tremendous visitor interest and is a clear indicator of the change going on in the city.”

Wilmington’s importance to the state does not go unnoticed. In 1963 the Delaware League of Local Governments formed to confront issues that affected the state’s municipalities in common and to lobby on those issues to both Dover and Washington, D.C. From the start, the league viewed Wilmington as critically important.

“There was a time in this state that if you needed anything, you had to travel to Wilmington to get it,” says George Wright, a former mayor of Smyrna and the league’s executive director. “We know that as Wilmington goes, so goes the state.”

The league assisted Wilmington in obtaining important state funding for the Riverfront project. “Mayor Baker’s leadership has turned things around,” Wright says.

Baker’s third term is evidence of his commitment to making Wilmington, in his words, “a world-class city.” The city may be closer than it thinks.

DiPinto recently he attended a presentation by a corporate entity looking to move here. “They pulled out this display of a map that depicted a trouser belt extending from Washington, D.C., to New York,” DiPinto says. “And the buckle of the belt was drawn right over Wilmington.”

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