Castle hears concerns of Sussex business owners

by Michael Short on August 20, 2010

Congressman Michael Castle sees a bright future for the Coastal Sussex region. Speaking to a small business roundtable on Friday, Aug. 20, he said that when the economy begins to take off, “this area will become very hot, very fast. . . I believe the future is positive.

Castle spent much of the morning listening to several small business owners in the Coastal Sussex region. The roundtable in Lewes was meant to air concerns and brainstorm suggestions to help small business owners here and across the nation.

Castle began the session by reminding people that approximately 64 percent of all jobs are created by small businesses. He then listened to a shopping list of concerns and issues before leaving to cut the ribbon for a small business success story – the opening of Driftwood Cabinetry in Lewes.

Most of the concerns were expected, although a few were not. Participants spoke about government regulation and red tape, cautious consumers, difficulty getting credit, transportation, investment incentives, education, the uncertainty of federal tax codes and regulations and even whether young people are willing to work hard.

A few of the businesses, like JB Landscaping , the Cultured Pearl Restaurant and Dogfish Head Brewery, were doing well. Others were not and one owner said he had just filed for Chapter 11 four days before.

Ray Book, of Raymond F. Book III CPA, said his business will gross less than it did the year before.  “We hope we can keep everybody employed and wait for the turnaround.”

O’Neal Brothers in Laurel said they have gone from 14 employees to only eight. Christopher Weeks, a business development manager for Becker Morgan Group, said “our business is probably 40 percent off.”

Castle told the business people that he often hears about credit problems. “They go to banks they have dealt with for years and they get turned down,” he said. When he and Senator Thomas Carper met with banking officials, Castle said they were told by banks that the problem is “regulators” that are hampering banking.

Several people spoke in favor of investment incentives. Nick Benz, COO of Dogfish Head Brewery, said Delaware needs alternative energy incentives. He said Dogfish Head would be interested in investing in alternative energy, but has decided to pass because it could have a price tag of more than $4 million. The same project in California could be done for less than $1 million because of incentives, he said.  “Absent that incentive, we’re going to sit back and continue to pay for fossil fuels.”

Tom Colucci of CNC Solar said credit is vital to growing his business. He said the alternative energy industry is highly subsidized and that regulation comes with those subsidies. But he said that regulation can go too far. “I am constantly working with state and federal bureaucracies . . .It’s a big drag on the industry. It needs to be simpler.”
He added that in some cases, business owners will keep prices high because of the subsidies or tax credits they receive. “Government subsidies are like a drug.”

Castle said that  the federal government needs to make tax and regulatory policy more permanent and less likely to change with the political wind.  “I hear that the uncertainty of what comes out of Washington D.C. is really a problem.”

Castle said he has supported legislation to lower taxes, increase lending and reduce the regulatory burden on small businesses.

Benz was among those taking education to task, saying it needs to do a better job of preparing young people for the world. “They teach to take a test. That’s not preparing kids for anything except to take a  test.”

Several people supported improving roads or mass transit. Some said that is especially important because employees must come to the beach from elsewhere because they can’t afford housing in the coastal area. Ted Becker of Stewart-Becker Properties (Inn at Canal Square) said “an underlying issue is transportation.”

Susan Townley Wood of The Cultured Pearl said that underscores the importance of planning and argued that you can’t try to sell thousands of homes and then complain that the roads are inadequate. “We need to say what’s going to happen before the next big boom.”

Benz said that he has been forced to look for skilled employees from out of state because some young employees lack a strong work ethic. “The kids are just flat out lazy.”

Wood said that she thinks that situation has improved in the last two years because the economy went sour and “reality has set in” for youthful workers.

Weeks said “there are a lot of great, vibrant, intelligent kids on Delmarva . . . The problem is they go off to college and never come back.”

Sharon Gray of the Small Business Development Center urged businesses to develop a business plan and “to start thinking strategically.”

Despite the concerns, Castle said low taxes and high quality of life are strong reasons for optimism for the area’s future.

“I see a lot of entrepreneurial spirit,” said Colucci.

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