IBJOpinion

Criticism of IEDC was off-point

January 22, 2011
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IBJ Letters To The Editor

Professor [Morton] Marcus’ warning about the perceived under-appreciation of local economic development organizations [in his Jan. 10 column] places a spotlight on the importance of these groups and those who lead them.

Economic development is becoming increasingly competitive and complex. LEDOs often serve to distill the viewpoints of the divergent players at the local level, whether they are elected officials, advisers or business leaders, and provide a streamlined, central point of contact that addresses a prospect’s questions and needs.

But more than that, as Marcus suggests, a savvy LEDO also is able to play the multifaceted role of caregiver, innovator and adviser to any and all parties involved in a project to keep that deal alive. This critical skill greatly affects the strength of a community’s tenuous grip on a fast-moving, high-maintenance prospect.

Contrary to the article’s criticisms about the Indianapolis Economic Development Corp., however, my experiences with this organization and its predecessor, the Department of Commerce, are different. The IEDC that I work with values the contributions of local government.

Many past and present senior executives within the IEDC come from a LEDO background, and understand a LEDO’s role to a project’s success. The IEDC is keenly interested in the local government’s participation in a project and how the state can tailor its involvement to enhance that project’s chances for success.

I would also take issue with the argument that the state oversells its economic development victories in the press. The IEDC’s role is to retain and attract companies that have the potential to succeed, and to do the best job possible to protect the state’s assets in the process.

On the first point, no amount of due diligence by the IEDC will enable it to guarantee the outcomes of the projects it incentivizes. Further, incurring the expense and delays that would result from dedicating significant resources to that effort would be of a questionable cost/benefit result, since the IEDC’s typical support for a project is in the form of self-policing, performance-based incentives. This leads to the second point.

By definition, performance-based incentives are paid out on a pro-rata basis as benchmarks are achieved. If the jobs are not created, then the incentives are not provided. Criticizing job-commitment announcements for projects that don’t come to fruition may make for provocative headlines, but these announcements are, at worst, victimless events that don’t detract from the state’s deservingly laudable efforts to secure these deals. The fact there will be winners and losers with proposed economic development projects is an occupational hazard of the industry.

Tim Cook
Partner, State and Local Tax Services
KSM Economic Development Advisors

 

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  • do you think
    this guy will be told no if he asks the state for tax credits in the future? Marcus has the guts to call a spade a spade when he sees one no matter the fallout. hats off to him.

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  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

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