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. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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