Redevelopment of Concrete Jungle around Lafayette Square? And an aside on Community Revitalization and Enhancement Districts (CRED)

The Indy Star’s columnist Erika Smith reports on a $2.7M investment over 3 years that the City-County Council just approved for the Lafayette Square area (West 38th Street):

I’ve always found this area (Lafayette Sq in Indy) fascinating in kind of an urban-wasteland sort of way. It will be interesting to see what they are able to do with this CRED investment. With that much already built environment, it will be a tall order for redevelopment. I like the idea of taking up a lot of the unused concrete and putting in grass and trees.

Incidentally this effort follows a kickoff last year to a major rebranding effort for the whole Lafayette Square area that includes gateway sculptures, sidewalk connectors, wayfinding markers, and bus shelters. The architectural firm Schmidt and Associates (which has also done some impressive work in Bloomington, and is responsible for the amazing Mass Ave redevelopment in Indy) is the lead designer. The Indy Star published a picture of one of the gateway markers: Lafayette Square area: Passport to the world.

Fiscal Aside:

The money will come from a mix of local funds, grants, and private investments, and will be funneled through the Local Initiatives Support Corporation. $800K will be provided through revenues raised from the Lafayette Square Community Revitalization and Enhancement District (“CRED”), which captures some state income tax, county option income tax (COIT) and sales tax generated in the district. CREDs are sort of like TIF districts (except that the revenue source is income and sales tax, rather than property tax), and are available for investment in downtown areas and investment in areas that have been severely impacted by an economic downturn or loss of a major employer. Qualified investments in CREDs also entitle the investor to a 25% tax credit (if approved by the Indiana Economic Development Corporation and if the investment is not simply moving operations from a different part of the state).

The first CRED was actually established in Bloomington, in order to redevelop the site vacated by Thomson Consumer Electronics. Now, there are around 9 CREDs around the state, including a second CRED in downtown Bloomington.

References: 

Here are a couple of other interesting references on CREDs:

City of Bloomington Economic Development Commission Meeting Today

Today, the City of Bloomington Economic Development Commission (EDC) will be meeting at noon (2015-01-23 at 12:00PM) in the Hooker Conference Room in City Hall. There are 3 substantive issues that will be covered in the meeting — issues that might be characterized as the good and the ugly in economic development. Unfortunately I don’t have a lot of time to write about this in much detail before the meeting, but will update the public afterwards.

1. Big-O properties (principal Mary Friedman, Bloomington) is requesting a 3-year tax abatement for a mixed-use project at 338 S Walnut Street. I have written about this project extensively before here (City Tax Abatement Request for Mixed Use Building 338 S Walnut St). They are coming back before the EDC because they are requesting to change the plan a bit — to reduce the amount of retail square footage on the ground floor from 2500sf to 1663sf to make room for bicycle storage (in order to make the bedroom to bicycle storage ratio 1:1). This abatement request will need to be approved by the City Council.

2. Cook Pharmica is requesting a 10-year personal property tax abatement for a significant expansion to their vial and syringe-filling business unit. They are proposing to invest $25M in new equipment, which will result in the creation of 70 new jobs, with $3.2M in new payroll. All wages would (and would be required to) be compliant with the City’s Living Wage Ordinance. The jobs would be created between 2015 and 2020. Cook Pharmica is also investing several million in the building to accommodate this expansion; however, they are only requesting the tax abatement on the personal property improvements (the equipment), not the real estate improvements.

The abatement is requested as a 70% abatement over 10 years. The 70% figure was chosen because Cook Pharmica could alternatively take advantage of an automatic 10-year Urban Enterprise Zone tax abatement, which also results in a net 70% savings on the personal property taxes resulting from their new investment, but distributes the remaining 30% to the Bloomington Urban Enterprise Association, the City’s Redevelopment Commission, and the Indiana Economic Development Corporation. Structuring their request as a 70% abatement on personal property tax instead keeps the 30% as being distributed to the taxing units serving the property (i.e., City of Bloomington, Monroe County, MCCSC, Monroe County Public Library, etc.). This abatement would need to be approved by the City Council.

3. Between 1986 and 2012, the City issued business loans through the Bloomington Investment and Incentive Fund (BIIF). There are 5 outstanding BIIF loans, of which 4 are current. The remaining loan was made to XfiniGen — a company that proposed to build the “next generation lithium batteries for large scale energy storage applications”, and proposed bringing 107 jobs to Bloomington. The company folded, and has left $37,464.07 in principal outstanding. Their last payment was in November 2013. The City is proposing that this remaining debt be written off, as there is little to no chance of collection. The memo in the packet about this situation provides some more detail about the company and the City’s attempts to collect the debt.

The full packet can be found here: Bloomington EDC Packet 2015-01-23

Request for Qualifications (RFQ) for Westside Economic Development Area Placemaking and Aesthetics Released

Happy New Year, IN-53 MoCoGov readers!

This past December 17th, the Monroe County Redevelopment Commission released a Request for Qualifications (RFQ) in order to identify a consultant who can assist us in placemaking and aesthetic improvements for the Westside Economic Development Area.

The introduction for the RFQ reads as follows:

The Monroe County Redevelopment Commission is seeking the services of qualified firms to provide assistance for placemaking, including aesthetic and functional upgrading/improvement of gateways, of the Westside Economic Development Area (WEDA).

Since its establishment in 1993, the Monroe County Westside Economic Development Area (WEDA)—also known as the Westside TIF or the Richland TIF—has been the site of significant economic development for the unincorporated area of the county, and serves as the site for many of Monroe County’s largest employers, including Cook, Baxter Pharmaceuticals, TASUS, Printpack, and Ivy Tech Community College. With the addition of several public amenities, including Will Detmer Park, the Indiana Center for the Life Sciences, the Northwest YMCA, and the Karst Greenway (a multiuse trail running through the area), the WEDA is also seeing and will continue to see a significant number of visitors (community residents) beyond the employees of the businesses in the WEDA.

The following map illustrates the boundaries of the WEDA:

WEDA

The vision for this project is to give the WEDA a sense of place and a distinctive aesthetic treatment that will further its strengths as a local center of employment and mark it as an attractive, desirable place for residents, visitors, and prospective businesses.

I have advocated for this effort for a long time, and have written about the Westside Economic Development Area here and here, and thank the Monroe County Redevelopment Commission for supporting this effort.

The full RFQ is available here: WEDA RFQ 2014-12-23

Responses are due at or before 3PM, January 30, 2015. Here is hoping for some good responses!

Unemployment Numbers for October 2014 Within Normal Fluctuation – And Better than Previous Years

Last June I took the Herald Times to task for writing an alarmist (and incorrect) story about a supposed unusual jump in unemployment in Monroe County: The June Doldrums for Monroe County Employment.

Today, the HT has a much more accurate and better-written article on the October 2014 unemployment numbers, that is still somewhat ominously-headlined: Monroe County Jobless Rates on Rise.

As I have said before, I really think they should include some visual data to put the numbers into better context.  As the following graph makes clear, the October uptick in unemployment for Monroe County is well within the typical seasonal pattern (the specific months of fall unemployment increase vary from year to year slightly) — and more importantly, all of 2014 is much better employment-wise than it has been for the past four years!

Monroe County Unemployment Rate 2010-2014 (October)
Monroe County Unemployment Rate 2010-2014 (October)

Trails and Economic Development Area Aesthetics on Redevelopment Commission Agenda Tonight

Karst Farm GreenwayThere are two items on tonight’s agenda for the Monroe County Redevelopment Commission (RDC) that are very important to me and the issues that I ran for public office on.

Placemaking for the Westside Economic Development Area

The first is a Request for Proposals (RFP) for a consultant to design aesthetic improvements to the County’s three economic development areas: Westside Economic Development Area, Bloomington Township State Road 46 Economic Development Area, and the Fullerton Pike Economic Development Area. I have written may times about these areas; this previous blog post has maps and links to several reports. According to the RFP, the project may include “items such as gateways, landscaping, decorative signage, art and wayfinding to delineate and personalize our economic development areas.”

These activities and elements are sometimes referred to as “placemaking” — transforming and reimaginging nondescript public spaces and giving them a real sense of place and identity. This certainly does include the elements in the RFP — signage, landscaping, etc. — but also needs to include an overarching concept…a name, an identity that hopefully accentuates the virtues of the space and its people, honors the history of the space, and envisions and enacts its future.

I’ve been particularly interested in placemaking for the Westside Economic Development Area. This area has been a real economic engine for Monroe County, and includes such businesses as Cook, Baxter, Grocery Supply.

Here is a letter I wrote early this year advocating for a focus on placemaking for the Westside:

“Since its establishment in 1993, the Monroe County Westside Economic Development Area (WEDA)—also known as the Westside TIF or the Richland TIF—has been an engine of economic development for the unincorporated area of the county, and serves as the site for many of Monroe County’s largest employers, including Cook, Baxter, Printpack, and Ivy Tech Community College. With the addition of several public amenities, including Will Detmer Park, the Northwest YMCA, and the in-progress Karst Greenway, the WEDA is also seeing and will continue to see a significant number of visitors (community residents) beyond the employees of the businesses in the WEDA.”

“Unfortunately, as successful as it is, the WEDA also falls short of its full potential as Monroe County’s employment and economic development hub. The area has no sense of identity or place. It is little known by residents who aren’t employees of one of the businesses therein. It has no well-defined boundaries (except on paper), and the primary entrance points on Curry Pike and Vernal Pike are at best unattractive and at worst somewhat blighted. For these reasons, marketing the area to prospective employers can be challenging – and even residents who are entering the area to visit the YMCA or other amenities are often confused, thinking that they couldn’t possibly be going to the right place.”

“However, a small amount of effort into giving the WEDA a distinctive identity and a distinctive, more attractive common visual appearance will pay dividends.

1.The area should have a distinctive name – one that honors our community’s heritage.

2.The area should have well-defined and visible boundaries and signage, particularly along common gateway areas.

3.The area should have a distinctive and attractive landscaping scheme, and common signage that
identifies the area.”

“An area with a distinctive identity and sense of place is easier to market to prospective employers. It connotes prosperity, attention, and care. Most importantly, though, it is more attractive and inviting to residents and visitors. While the economic development tools are in place to continue to sustain and enhance the success of the Monroe County WEDA, we can do much better for employees, employers, visitors, and residents.

Capital Equipment for Maintenance of the Trails

The Monroe County Parks and Recreation Department will also be presenting their request for $87,575 to the RDC to purchase capital equipment (truck with snow plow and spreader, mower, and trail-friendly maintenance vehicle) to support the maintenance of the county active transportation network, including the newly constructed Karst Farm Greenway. Parks and Recreation is proposing a total budget of $152,190 to maintain the trail network for 2015; this includes the $87,575 in one-time capital equipment. Presumably the Parks department will approach the County Council and request an additional appropriation for the other expenses — personnel, fuel, supplies, etc. early in 2015. The full proposed budget for supporting the active transportation network for 2015 can be found here: Parks Trails Management Proposal.

Since most of the County’s active transportation network is in or adjacent to the Westside Economic Development Area and serves the WEDA, the RDC is allowed to purchase capital equipment to serve the WEDA. However, it cannot pay for ongoing maintenance expenses.

I will be there tonight to support both requests of the RDC.

The full agenda is available here: RDC Agenda-11-19-14. The meeting is scheduled for 4:30PM today in the Nat U Hill Room of the Monroe County Courthouse.

City Tax Abatement Request for Mixed Use Building 338 S Walnut St

I was recently appointed to the City of Bloomington’s Economic Development Commission (EDC), as a County Council nominee, and just received word that we will be considering a tax abatement request for a mixed-use development at 338 S Walnut St downtown. One of the primary roles of the EDC is to evaluate and make recommendations on requests for tax abatements. The EDC is purely advisory; the City Council has the ultimate authority to approve tax abatements in the City of Bloomington.

Monroe County also has an Economic Development Commission, which makes recommendations on tax abatements in the unincorporated part of the county. This will be my first time considering a tax abatement on a project with a residential component; County projects have all been for employment-generating facilities (manufacturing and logistical facilities), at least during the time I’ve served on the Council.

The photo below shows the currently vacant lot currently on 338 S Walnut, along with a bit of the two adjoining properties — 340 S Walnut to the south (owned by the same owners as 338 S Walnut) and the old Costume Delights to the north.

338 S Walnut St
338 S Walnut St

Interestingly, 338 S Walnut St used to be the home of Monroe County Health Department’s Futures Family Planning Clinic; the clinic has since moved into the basement of the Monroe County Health Building. The building has already been demolished, and the lot is currently vacant.

Former County Futures Family Planning Clininc
Former County Futures Family Planning Clinic

The following is an architectural rendering for the planned project provided as part of the tax abatement application. The building is expected to be mixed-use, residential and commercial, and provide a total of 14,400 square feet. It will also include some on-street landscaping.

Renderings - 338 S. Walnut St._Page_3
Renderings – 338 S. Walnut St._Page_3

The owners anticipate investing around $2M in the property, and are asking for a 3-year phase-in of the property taxes associated with the new assessed value. This means that the new assessed value would be 100% abated the first year, 66% the second year, 33% the third year, and subsequent years would be taxed at the full value.

The property currently generates around $4000/year of property tax. At full value, the new project will generated around $40K/year of property tax, so even after the first year of the abatement, the new project will be generating 3 times as much property tax as it is currently.

The following abatement schedule (from the EDC packet) shows the estimated taxes with and without the abatement:

338 S Walnut Proposed Abatement Schedule
338 S Walnut Proposed Abatement Schedule

The EDC meeting to evaluate this application is on November 21, 2014 at noon. I’m not yet sure when this application will appear on the City Council agenda.

Is a Commuter Tax Fair? Comments on Tully’s Column and Application to Monroe County

Matthew Tully wrote a very thoughtful column in last Thursday’s Indy Star (Tully: Commuter tax is fair, like it or not) on the idea of a commuter tax, and in particular the unfairness of Indiana’s current system of taxation, in which the residents of Marion County/Indianapolis provide and subsidize the jobs and infrastructure that benefit the residents of surrounding counties whose residents commute into Marion County to work.

This is a topic that comes up from time to time, and various proposals are periodically floated to make the system more fair to counties (like Marion) that are net employment counties — counties into which large numbers of residents of other counties commute for work.  Indiana’s system of income taxation has all income tax collections going to the county in which an individual resides, regardless of where she or he works. There are fewer net employment counties (generally, but not always, urban counties) than suburban counties, and thus a more fair system of taxation has proved thus far to be politically unpalatable.

Tully makes the case (and I agree with him) that some sort of modification of this system — for example, in which a small percentage of the income tax collected from an employee would go to the county where the job is — would be more fair, and in fact, would benefit everyone by ensuring that the employing county would have the resources to maintain the infrastructure that benefits both the employer and the employee.

So how would a commuter tax — or at least some sort of income tax revenue sharing between employer counties and the counties in which employees live — look in Monroe County? The StatsIndiana site provides a nice tool with which to analyze commuting patterns — the Annual Commuting Trends Profile — using Indiana Department of Revenue data analyzed by the Indiana Business Research Center (IBRC).

The data from Indiana tax returns for 2012 (the latest year for which data is available)  shows that Monroe County is clearly a net importer of labor from other counties (and states). 15,613 workers live in other counties or states but work in Monroe County. Only 5,683 workers live in Monroe County but work outside of the county, meaning that almost 10,000 net workers commute into Monroe County for work.

The following chart illustrates the top five counties sending workers into Monroe County.

Commuters Into Monroe County (2012)
Commuters Into Monroe County (2012)

Another similar chart illustrates the top five counties receiving workers from Monroe County (“out of state” counts as a county, for this analysis).

Commuters Out of Monroe County (2012)
Commuters Out of Monroe County (2012)

So while Monroe County employers clearly provides jobs — and local government provides the infrastructure and services required to support these jobs — local government in Monroe County does not receive any revenue associated with these jobs filled by commuters from other counties. No property tax, no income tax.

Unfortunately this data set only includes the number employees commuting in or out of Monroe County, not their income. It would be useful to have this information to determine whether or not a revenue-sharing arrangement would be beneficial to Monroe County. For example, 1076 employees commute to Marion County from Monroe County. While this number is much smaller than the number of employees commuting overall into Monroe County, one might surmise that the incomes of employees commuting to Marion County from Monroe County would be substantially higher than average. We would have to know the incomes of the employees commuting into versus out of Monroe County to know whether a commuter tax or revenue sharing arrangement would be beneficial. However, regardless of how beneficial it is, it is clearly a fairer system to apportion the revenues in some way between the county in which an employee lives versus where she works.

I’ve been playing around with some sort of metric that would measure the commuting patterns as a percentage of the overall economy of a county — that is, a good measure of whether a county is a net employer-county — and would allow good comparisons between counties for analysis of tax fairness.

My first attempt is the following: net in- versus out-commuters as a percentage of the total number of residents of a county who work (known as the implied resident work force). The following chart shows what this calculation would look like for a couple of Indiana counties that Monroe County is frequently benchmarked against:

Screenshot 2014-07-27 20.13.49

 

Clearly this metric does distinguish net employer counties like Marion — and Monroe and Tippecanoe and Vanderburgh– from suburban “bedroom” counties, like Hamilton and Hendricks and from rural counties like Greene. There are a couple of anomalies that show up. Despite including the second-largest municipality in Indiana, Allen County’s net in-commuting is a relatively small percentage of its work force. Martin County is also an anomaly, due to the large number of people who commute to the Crane Naval Surface Warfare Center from surrounding counties.

I hope that the discussion will continue during the upcoming General Assembly session, and I would expect this topic to receive some significant discussion by the newly-created blue ribbon commission on taxation. It is in everyone’s interest to promote economic development by ensuring that local governments can continue to provide the infrastructure and services to create and sustain good jobs.