Government and Economic Development and Technology

Tech-park program tightens guidelines: Daniels administration hopes grants spur more innovation

July 25, 2005

In Shelbyville, home of the state's third certified technology park, economic development officials are excited. They just broke ground on a promising new park business:

A Santa Fe Steakhouse.

Since 2003, the state has approved $1.2 million for Shelbyville to help develop its technology park-one of 17 now scattered across Indiana, each meant to modernize the state through the attraction and development of high-tech companies.

In total, the state has approved $9 million in grants since the certified technology park program launched two years ago, spreading the largess to all corners of the state.

Under the administration of Republican Gov. Mitch Daniels, the program lives on, but the focus will narrow.

Daniels' new Indianapolis Economic Development Corp. is preparing to award another $9 million over two years, but with an eye toward maximizing bang for the buck.

"Right now, we've got a number of tech parks where we've made awards, and there simply is not anything happening in those parks," said IEDC Vice President Nathan Feldman. "What we don't want to have happen is designate a tech park, grant funds and have no job opportunities transpire."

The program needs the sharper focus, many economic development leaders agree. They say some communities applied for and received grants with little chance for success.

"We've got communities that are sticking a sign in a cornfield and calling it a technology park," said Brooke Tuttle, president of the Columbus Economic Development Board. "There's no way those communities can sustain that kind of technology. Once it got started, everybody wanted one."

A case in point may be the Shelbyville park, which has garnered 13 percent of the grant money. It's yet to attract a high-tech startup, acknowledged Tom DeBaun, director of the Shelbyville Plan Commission.

"But there are several that have expressed interest and are in the works," he said.

The park is anchored by the cancer care and obstetrics/gynecology extension of the town's Major Hospital. The park also boasts an Indiana Wesleyan University campus, a local accounting firm and an Indiana WorkOne Center, better known to most as the unemployment office.

Established during the Democrats' O'Bannon-Kernan era, Indiana's certified technology park program offers cities and towns two primary benefits.

First, it allows them to capture a portion of the payroll taxes paid by any new employees who work within a park's boundaries. Governments can raise up to $5 million per park that way, then plow the proceeds back into economic development.

Second, the parks are eligible to apply for state grant money. Anderson, which received its tech park designation in June 2003, has garnered the most grant money, $1.9 million. West Lafayette has garnered second-most, $1.88 million.

But as time went on, the original $9 million began running out. And the grant awards dropped to several hundred thousand dollars per park.

The money is usually used to pay for infrastructure or facility construction and improvements. But the most successful parks, such as West Lafayette's, already have much of that network in place. For them, technology park certification and any related grant money are a helpful windfall.

The state's tightened tech-park guidelines bore fruit for the first time July 20, when IEDC announced the town of Jeffersonville had attracted MedVenture Technology Corp. from Louisville. Med-Venture, which designs and manufactures minimally invasive surgical products, expects to expand employment from 200 to 700 by 2010.

Indiana is establishing a tech park in Jeffersonville based on the actual attraction of a promising company, Feldman said. Aspirations weren't enough.

"We told our local partners-the mayor's office and local economic development officials-that the awarding of a certified technology park was contingent on MedVenture coming to their city," Feldman said. "And without that, it would not be awarded."

The state will have more successes with the program if it concentrates grants where they can have the most impact, said Ron Arnold, executive director of the Daviess County Economic Development Corp.

The tech park he oversees sits outside the Crane Naval Surface Warfare Center in southwest Indiana. Although the Navy base boasts one of the highest concentrations of high-tech engineers in the nation, the state so far has granted the affiliated tech park only $300,000.

"I'm not throwing stones at anybody else's park. But you have a limited number of resources on the grant funding," Arnold said. "I'm not sure any one entity is going to get enough money to get done what they need to get done."

To bolster their chances for success, the technology parks need to have a focus and a plan in place before they get money, said Tuttle, the Columbus economic development official. His city has concentrated on attracting U.S. extensions of international tech giants.

At one point, Tuttle said, Columbus considered building an incubator for home-grown startups. But it called off those plans after commissioning a $60,000 economic development study. Columbus realized it didn't have a pipeline full of new business prospects to incubate, as West Lafayette does.

Tuttle considers the $60,000 well spent. Other towns hoping certified tech parks will be their panacea might want to consider Columbus' example.

"My concern is a lot of these communities are making the assumption, 'Build it and they will come,'" Tuttle said. "That's not going to happen."
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