Consolidation gives locals more economic development leverage - Indianapolis Business Journal

Changes were inevitable when the state Commerce Department became the Indiana Economic Development Corp. two years ago.

Among the most visible: consolidating Indiana"s 12 economic regions into six and combining duties so that the same person is responsible for retaining existing businesses and seeking new enterprises in each area.

Some critics viewed the moves as a way to reduce expenses. But officials say the changes have leveraged local and regional efforts-and expertise-and put them in more of a lead development role.

"When they first announced changes in field offices, I didn"t think it was a good idea," said Joy McCarthy-Sessing, president of Kosciusko County Development Inc. and a longtime economic development veteran. "Now, I believe [the field officers] have the ability to make certain decisions on their own and that they don"t have to call to the central office and get permission?"

IEDC still takes the lead on some projects, to be sure. The main office in Indianapolis handled most of the heavy lifting when it came to persuading Honda Motor Co. to build a $550 million plant in Decatur County, for example.

But when the land purchase it was working on didn"t come through, a local economic development organization stepped in and leveraged its option on a 450-acre site near Greensburg-putting together 800 acres and the opportunity for as many as 900 more to seal the deal.

"It is nice to have one contact, but it doesn"t always work out that way," said Vicki Kellerman, director of the Greensburg/Decatur County Economic Development Corp. and a longtime veteran of economic development in southeast Indiana.

When it comes online in 2008, the Honda plant will have 2,000 employees producing 200,000 four-cylinder vehicles a year. And then there is the potential for new businesses that will supply the plant, something the local organization is ready for, with 450 acres zoned and 160 acres awaiting zoning near the Honda site. Also in play with a private developer is 73 acres contiguous to the Honda site, Kellerman said.

On the other side of the state, Ron Arnold, executive director of the Daviess County Economic Development Corp., said the changes in the regions have been seamless.

"I"ve been happy with the results. I still work with the officers in Evansville and they have been accommodating," he said, even though they"re now also responsible for five counties that had been in other regions. "I can bring projects to them and they will work with clients and help them through the application process" for incentives or other inducements to expand or move to the southwestern Indiana county.

One of the stumbling blocks, however, has been development of WestGate at Crane Technology Park, a joint effort of Daviess, Martin and Greene counties. It was the first multi-county technology park to be certified by the state in 2006.

With the Naval Surface Warfare Center nearby, the tech park was seen as a key part of the federal government"s decision to keep the Crane operations going, saving thousands of high-paying scientific, engineering and computer programming jobs.

It has more than 300 acres and at least 100,000 square feet under construction, with several defense-related businesses and service operations having taken up residence or set to open throughout the year and into 2008, Arnold said.

Although the counties were on board for .the joint effort, there was not a state mechanism in place to streamline issues like taxes and incentives.

"Economic development projects, especially in rural areas, can be too large for one county to run on its own," he said. "Although great strides have been made, Indiana is still well behind economic development efforts. There are a lot of silos that were in place for years that don"t want to change. They are more resistant to more decision-making at the street level."

As a result of the southwestern Indiana experience and a strategic emphasis on regional economic development, the state in 2006 established the Regional Economic Development Partnership Program to boost competitiveness in job creation, work-force development and retention, entrepreneurship and access to capital and developing targeted industry clusters.

For example, the state has identified motorsports, advanced manufacturing, logistics, life sciences and agriculture among key industries that fit well in various regions in Indiana, said Chad Sweeney, executive vice president of the Indiana Economic Development Corp.

"The regional approach has been successful," with the number of deals increasing annually as regional economic developers work with state officials to become more proactive, he said.

Granted, financing in the form of incentives, tax deferrals and other inducements are a part of the process, he said, but the main drivers of development deals are location, quality of life and tax structure. The state"s Major Moves transportation plan, approved in 2006, also has enhanced economic prospects, Sweeney said.

However the state organizes its economic development personnel, policies and procedures, they are just tools in the box for Kosciusko County"s McCarthy-Sessing. But, she said, "there are never enough."

She points to programs like the state"s 21st Century Fund, which targets support to research and development projects, that could be better funded.