Wednesday, November 25, 2015


Giant warehouse won't keep this town from going broke

Middletown cut by Moody's, which threatens to cut again

Giant warehouse won't keep this town from going broke

(AP Photo/Paul Sakuma, File)
(AP Photo/Paul Sakuma, File) AP

Moody's Investors Service has cut its credit rating for general-obligation debt issued by Middletown, Delaware's fourth-largest town with nearly 20,000 people, to A2 from A1, and is threatening to cut it again, due to Middletowns's "challenged financial position" -- despite the fact the town is home to a brand new warehouse employing 850 fulltime workers and more than 1,000 temporary workers, among other development the town elders have drawn to the former farm-country center in recent years.

Middletown owes $43 million to investors, including $21 million in debt rated by Moody's. Analyst Vanessa Youngs wrote that Middletown is squeezed between "significant population growth" and a "limited tax base," and suffers from high debt levels relative to the population. Middletown gave Amazon a $1 million tax rebate, and the state of Delaware (which charges no sales tax, a nice advantage for retailers) gave $7 million+ in state grants, to attract the $90 million distribution center in competition with rival states like New Jersey last year.

"Financial operations will remain pressured in the near term," as Middletown spends more on needed capital projects, Young added. The town needs to boost taxes or fees, and set aside more money for rising expenses -- or its ratings will be cut again. Lower ratings raise doubts among investors as to whether a town pay its debts; that drives up borrowing costs because investors will demand more interest in exchange for buying Middletown's riskier bonds.

Middletown's spokesperson didn't return a call seeking an explanation for the town's failure to turn its business growth into stable town finances.

We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.
Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy: comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

Read 0 comments
comments powered by Disqus
About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph at or 215 854 5194.

Joseph DiStefano
Also on
letter icon Newsletter