Wednesday, July 29, 2015

Wilmington in decline, says Wall Street

Corporate center's poverty spreads, tax base 'weakening': Moody's keeps "negative outlook"

Wilmington in decline, says Wall Street

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Wilmington, Delaware, which is roughly the same size as rundown Camden, N.J., further up the Delaware River, remains "America's Corporate Capital," with a white-collar downtown office center that's a banking, legal and corporate headquarters and the titular home of more than half the Fortune 500, thanks to business-friendly courts, low corporate fees and a long history of activist business leadership and accomodating politicians.

But Moody's Investors Service says Wilmington's city-government fiscal outlook remains "negative," as Delaware's largest community looks to refinance $37 million of its $285 million  public debt.

In his report, analyst Dan Seymour praised the city's "conservative and forward-looking" financial management under new mayor Dennis P. Williams, and the "substantial corporate and commercial presence" by DuPont, Bank of America, JPMorgan Chase, Capital One and other corporations whose buildings tower over the partly-renovated Market St. retail and theater district and the Christina riverfront.

But the "high poverty rate" in the city's predominantly slum neighborhoods (scarred by an aggressive drug trade and regular shootings), along with "high fixed costs, a heavy pension burden, economically sensitive revenues, and weakening wealth levels," plus heavy debt from past borrowing, makes it more likely Moody's will cut the city's Aa2 bond rating, boosting future borrowing costs, Seymour warned. He affirmed Wilmington's "Negative Outlook" from Moody's.

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About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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