New Castle County Executive Thomas P. Gordon announced on Monday that the county will tap $3 million from a park fund to help create the Delaware Board of Trade as a Wilmington-based stock exchange.
Gordon said a majority of New Castle County Council members now support the plan, which involves the board of trade paying interest on a secured loan.
The board is expected to create about 100 jobs similar to those in the state’s banking industry, as well as hundreds more indirectly through needed goods and services, a county reléase stated.
Wilmington has been mentioned as the site of the exchange.
The board of trade would create equity markets for small and mid-sized companies. A group that included the retired chairman of the New York Stock Exchange proposed the exchange.
The group turned to the county after not getting support from the state.
Board officials have applied for required federal approvals. County support already has helped secure funding from a national bank and is expected to trigger private investments, Gordon said.
The county also approved the use of bonds that are backed by private investors rather than the county.
The county moved $3 million of the Garstin Trust – set up in the 1970s to benefit county parks – from stocks and mutual funds to purchase a secured note providing investment for the board with 6 percent interest for five years.
“Yearly interest payments of $180,000 will continue to be used exclusively for our county parks,” Gordon said.
The investment guarantee is the county’s exclusive lien on the license of software to be used running the Delaware Board of Trade, valued by an outside economist more than $3 million, he said.
On Tuesday night, New Castle County Council passed a resolution opposing the plan, but Gordon reached out Wednesday, meeting members and providing more information about the plan.
Although use of the fund legally rests at the sole discretion of the county executive, Gordon said he was encouraged by council members’ willingness to reconsider and, with a fuller briefing, reach a consensus in support. He also praised efforts of the county Office of Economic Development led by Marcus Henry to provide council members legal and financial documents that helped allay their concerns.
The Delaware Board of Trade will create a needed mechanism for small- and medium-cap companies that currently have no such real-time venue to raise capital and trade shares.
The ability to create such a stock exchange was established through the American Jobs Act of 2013, passed by Congress with provisions sponsored by Delaware Sen. Tom Carper and Rep. John Carney.
A key figure in early efforts to secure the exchange was David Grimaldi, the county’s former chief administrative officer and former investment banker. He was dismissed from his post.
