Regional Cities Initiative Demonstrates Remarkable Impact

By: John Sampson on October 3rd, 2018

How Do We Continue this Momentum?

Today’s most urgent threat to economic growth for cities, regions and states across the country is the availability of and access to a skilled workforce aligned to the needs of employers.

Certainly, there are many dimensions to this challenge, but the bottom line is clear. The urgency and magnitude of the talent challenge demands a call to action by elected officials, community leaders, employers and residents alike. We share a common interest in developing, retaining and attracting the skilled workforce for today and our economic future.

Given Northeast Indiana’s aggressive recovery from the recession and the current low unemployment rates, employers in Fort Wayne and our region are suffering more than their fair share of this challenge. As the economy continues to expand, we can expect our plight to deepen.

The hard truth is that Northeast Indiana suffers an average loss of 1,000 of our domestic population each year for people ages 15 to 29. Thanks to a healthy birthrate and a consistent in-migration of international residents, we are growing as a populace. The impact of these factors, though, is insufficient to overcome the outflow of retiring boomers from the regional workforce.

None of this is news.

Address Population Stagnation with Regional Cities

A bright spot in recent history occurred in 2015 through legislative action. Indiana’s Regional Cities Initiative was enacted and signed into law by former Governor Mike Pence. The Regional Cities Initiative was designed to “nudge” significant investment by local governments and the private sector in quality of place amenities. The ultimate objective of this investment in Indiana’s regional cities was to turn the tide of outmigration and increase our rate of population growth.

While our state has achieved an incredible resurgence of economic position in the Midwest over the last decade, our work is not done. Our success in commitments for new job creation throughout the state has left literally tens of thousands of jobs unfilled.

We now must turn our focus to being a standout for talent retention and attraction.

Simply, we must grow population faster by retaining skilled workers, bringing natives back home and being welcoming to international immigrants. Before us is the next battleground in the jobs war: to become a magnet for the best talent. 

Regional Cities’ Return on Investment

Has the Regional Cities Initiative demonstrated positive results worthy of a second look? The returns are in the early stages, but the initial estimates are positive in both tangible and intangible impacts.

In just three years, the Regional Cities Initiative has spawned 64 quality of place projects in 18 counties affecting a population of 1.6 million Hoosiers. All totaled, this produced a new capital investment of $1.2 billion; 70 percent from the private sector. Indiana’s contribution through the Regional Cities Initiative grants was $126 million funded through a tax amnesty program. By all measures, a remarkable return.

$126 million

invested in the Regional Cities Initiative through a tax amnesty program

$1.2 billion

of new capital investment because of the Regional Cities Initiative

64 projects

generated by the Regional Cities Initiative

1.6 million Hoosiers

benefit from Regional Cities projects

Regional Cities Initiative Preliminary Economic Impacts

Source: Michael J. Hicks, PhD, at the Center for Business & Economic Research at Ball State University

Wait a second! The objective was not capital investment. The quality of place investments were the means through which we targeted population growth.

While many of the projects are still under construction, analysis by Ball State economist, Michael Hicks, predicts a net impact of 7,960 new residents in the impacted counties over a three-year period.

To bring this closer to home in Fort Wayne and our region, we would expect half of that population growth to occur in our 11 counties. Annually, this growth of 1,300 new residents would more than offset the annual net out-migration of the domestic population. Clearly a step in the right direction.

We cannot overlook the less tangible benefits in the “regional” nature of the initiative. Certainly, communities were incentivized by the legislation to band together under new regional development authorities to access the grants. However, collaborative benefits emanated from the initiative through best practice sharing and how most counties of the region have had significant projects otherwise unable to launch. 

From Riverfront Development and The Landing in Fort Wayne to the Eagles Theatre and River Trails in Wabash, many of these projects would not have launched at all, let alone at the same time, were it not for the Regional Cities Initiative gap financing.

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Each of the 23 projects underway in Northeast Indiana has cultivated in community leaders and residents a sense of hope, community pride and momentum in hometown development long absent. Ball State’s qualitative Regional Cities Initiative analysis tabulated these benefits as well.

Again, the urgency and magnitude of the talent shortage demands a call to action.

Transformative Opportunities Ahead

In the 2019 legislative budget session, our legislators will consider enabling round two of Regional Cities Initiative funding and authorization of a Regional Development Tax Credit.

While it is unlikely that previous winners of Regional Cities Initiative grants would receive an additional grant, the benefits of investment in quality of place assets and regional collaboration should be extended to more Indiana cities to achieve the benefit of growing the state’s population overall.

Finally, the Regional Development Tax Credit would enable all rural and urban communities to enjoy the benefits of development tools previously reserved for only a few metros.

These actions are not without challenge. Legislators will require the support of community leaders, specifically from those regions like Northeast Indiana who have derived significant benefit and momentum from the Regional Cities Initiative program. Indiana and our region cannot afford to fall behind in the competition for attracting and retaining the workforce of tomorrow.

It is clear that the Regional Cities Initiative is producing dramatic returns. Let’s stand together to accelerate our progress and encourage our legislators to do so as well.

Want to learn more about the impact of Regional Cities in Northeast Indiana? Visit the website to read more about how the Northeast Indiana Regional Development Authority is making investments in the region.

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