“Economic Development Primer” was presented by Cheryl Morphew, Economic Development Consultant for the City of Crawfordsville and Montgomery County, at February 4 Lunch with the League. Morphew noted “not one-size fits all” definitions of Economic Development and suggested three:
• Creation of jobs and wealth to improve the economic well-being of a community,
• Programs and policies directed at improving the local community, and
• Economic development as facilitation of long-term investment that leads to community prosperity.
There are base industries vs service industries. Base industries are those that produce, export, and sell their goods outside of a community, thus bringing in new dollars which in turn increases the total dollars that circulate within a community. Pace Dairy Food, LSC Communications and Nucor would be examples. Service industries are those business that sell goods which circulate existing dollars in the community. This includes nearly all local retail and dining.
The three-legged stool concept of components of an Economic Development program include: Economic Development, Community Development, and Workforce Development. Focused activities of Crawfordsville/Montgomery County Economic Development Program include: Annual & Headquarter Visits; Industry, Retail and Residential Attraction, Talent Attraction—readiness & development; Placemaking, Promotion, and Inventory Development—business & residential.
Indiana Economic Development Commission provides leads by property types and by industry type: food, call center/office, agriculture, manufacturing of auto/aerospace, general, warehouse, chemical, plastics, metals, and other. Of 56 leads received in 2018, 15 were a good enough fit to be pursued.
Site selection process is really site elimination. Six sample steps in site selection include: define search region, public data screening, RFI/RFP screening, property visits, negotiations and finally location selection.
Three primary tools for local incentives include: real property tax abatement, personal property tax abatement and tax increment finance (TIF). Other tools may include industrial revenue bonds.
Tax abatement is designed to attract businesses by cutting taxes by a diminishing amount each year from 100 percent in year one down to 5 percent in year ten.
A local incentive-tax abatement sample was suggested. The current situation would be 51+ acres, agricultural use, South Union Tax District, 2017 estimated assessed value $102,100, 2017 /pay 2018 with estimated taxes of $1,934.
An economic development project of an insulation manufacturing firm proposes a 400,000 square foot facility and the creation of 60 jobs at an average wage of $21/hour. Cost of the building is $100 million and machinery and equipment will be an additional $50 million. Estimate taxes with ten-year real property tax abatement would be $8.6 million and estimated taxes with 10-year Personal Property Tax Abatement would be $1.2 million. Estimated total taxes with abatement over a 10-year period would be $9.8 million.
Following her presentation, Morphew stayed to answer questions and comments by many of those in attendance. This was truly an informative and encouraging presentation!
The LWV, open to men as well as women, is a nonpartisan, multi-issue political organization which encourages informed and active participation in government. For information about the League, visit the website: www.lwvmontco.org or send a message to: LWV, PO Box 101, Crawfordsville, IN 47933.