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A brighter picture is developing

January 4th, 2018

By Linda Lipp | Greater Fort Wayne Business Weekly

While it probably can be said that the nearly two dozen northeast Indiana projects assisted by grants of funds from the Regional Cities Initiative collectively are the region’s biggest economic development story of the year, they are by no means the only story.

The biggest project in the area, by far, is the continuing, $1.2 billion expansion of the General Motors truck assembly plant on the south edge of Fort Wayne that began in 2015 and won’t be finished until the end of 2018. Although it got plenty of incentives from state and local governments, the project isn’t using Regional Cities funds. Neither is Parkview’s nearly finished, $100 million Cancer Institute.

Northeast Indiana’s recreational vehicle industry continues to thrive on strong demand from consumers, with major players such as Thor Industries and supplier Patrick Industries growing through acquisitions and expansions.

The redevelopment of the General Electric complex in downtown Fort Wayne, which could total $400 million by the time it is done, just got a pledge of up to $50 million in industrial site redevelopment tax credits from the state. It came along too late to take advantage of the one-time Regional Cities bonanza, however.

By the numbers

Eight of the 23 Regional Cities projects approved by the Northeast Indiana Regional Development Authority were in Fort Wayne and Allen County. By dollar value, the Fort Wayne projects totaled just over $22 million of the $42 million allocated by the state. The other counties in the 10-county RDA area – Adams, DeKalb, Huntington, LaGrange, Noble, Steuben, Wabash, Wells and Whitley – got a total allocation of more than $17.8 million.

The total funded by the RDA, according to the most recent figures, is about $39.9 million, below the $42 million the state awarded for the program. The difference is because a few projects required less funding than expected, and other funds were earmarked to cover administrative and related costs, said RDA director Michael Galbraith.

Jon Myers, president of the Whitley County Economic Development Corp., said he was OK with the division of funds between the region’s largest city and the surrounding, smaller communities. He also believes the amount of money going to Fort Wayne and Allen County projects will benefit neighboring counties.

“It’s part of being in the region. If Allen County has this big riverfront project and I’m only a half hour away, I’m going to take full advantage of it,” he told Greater Fort Wayne Business Weekly last year.

The latest developments

As 2017 drew to a close, some new, privately financed Fort Wayne projects that won’t have Regional City funding as a component also were front and center. Chief among them is the $62 million apartment/multiuse complex Continental Property Group plans to build on Fort Wayne’s riverfront. And the Indiana Economic Development Corp. approved tax credits that could help home mortgage lender Ruoff build a new headquarters downtown.

The city of Fort Wayne is working with Ruoff to put together the project, which has not been formally announced. Fort Wayne also has two new downtown hotels coming, a Hampton Inn and a Provenance boutique hotel. This new private investment, and the portion that is connected to Regional Cities projects, may not have come about at all, or at least not as quickly, if not for the infusion of Regional Cities funds, Mayor Tom Henry said.

“There were a couple initiatives we wanted to implement, and without their help as far as showing some financial input from the public sector, it would been hard to get the private sector to step up,” Henry said.

In the case of Great Lakes Capital’s Skyline Tower component of the Ash Brokerage development downtown, the Regional Cities money was the shot in the arm that got the project back on track after the first developer pulled out. “Normally the private sector is in first and the public money follows; in this particular case, the state said we’ll put some money in up front to serve as a foundation,” he said.

“I don’t know if it wouldn’t have happened, but it would have been harder to sell. It might not have been done in such a timely fashion. Sometimes these things take a long time to bring into place, but when you’ve got some infusion of capital, that’s really what it’s all about sometimes to move things forward.”

The commitment of funds from the state for riverfront redevelopment helped boost efforts by the parks department to collect a substantial portion of the funding in donations from nonprofit foundations and others.

“The fact the state said, ‘we’ll put money in upfront,’ that they liked the project, made fundraising much easier,” Henry said.

The momentum has continued post Regional Cities with projects such as the two hotels and the Continental Group project.

“I think when they looked at Fort Wayne, they saw all this stuff happening, and undoubtedly that helped contribute to their excitement about investment in Fort Wayne,” Henry reflected. “I think more than anything it served as a sort of catalyst for additional development.”

Assessing the impact

In early December, the Center for Business and Economic Research at Ball State University released the first phase of a study, funded by the Metro Chamber Alliance, that touted the economic impact of the Regional Cities initiative on the three regions that were awarded funding.

Currently underway across the northeast, north central and southwest regions are 64 projects totaling more than $1.2 billion in investment, $835.5 million of which is private-sector investment, the study said.

Much of the emphasis on the Regional Cities projects is on “quality of place” initiatives that make the regions more desirable places in which to live and do business. Six of the northeast Indiana projects involve the creation or expansion of trails. DeKalb County got funding for its YMCA, Kendallville for an outdoor recreation center, Wabash for the renovation and restoration of the Eagles Theatre, Columbia City for an aquatics center, Warsaw for downtown redevelopment and Huntington for a historic preservation project.

“The impact of the Regional Cities Initiative is evident in the progress and momentum occurring in all three regions,” said Eric Doden, CEO of Greater Fort Wayne Inc., which is part of the Metro Chamber Alliance. “We are creating the conditions to attract talent and capital to build our community into a nationally recognized economy.”

It’s impossible to know, at this point, however, how many of the projects and how much of the investment still would have happened as a result of the booming economy and the demand for what they provide, without any help from Regional Cities funds.

Because of the emphasis Regional Cities puts on quality of place, the Ball State Study also examined the potential effect of the investment on population changes. Over the next eight years, the investment is expected to bring 7,960 new residents to Indiana, above and beyond current population growth projections.

Beyond the core

While the redevelopment activity in downtown Fort Wayne is hard to miss, it is not confined to the core of the city. The Clyde Theater south of downtown got a big investment from Sweetwater’s Chuck Surack, as well as Regional Cities funding. The innovative Posterity Heights “scholar house” project on the south side, which is designed to provide affordable housing for single parents as well as educational opportunities, was awarded almost $2.5 million in Regional Cities funding.

If Henry has his way, the two south side projects will be just the beginning for the city’s neighborhoods and its other business districts beyond downtown.

“My whole foundation for trying to move Fort Wayne forward, was based on getting a vibrant downtown, an exciting downtown, a place where people wanted to go. Really make it a point of destination. My desire was that if we had a really exciting downtown that other things would follow, and that’s still my intention. If you want to be part of this, you don’t necessarily have to be in the core (of the city), but you need to be a partner in all this,” Henry said.

“I don’t think there’s any question but that we’ve got to keep this momentum going. Regional Cities is only a one-time set of monies. This is it. We’re not going to get any more. So we have to make sure that this is, one, going to stand the test of time; and two, serve as the catalyst for additional development.”

Two federal tax credit programs that Fort Wayne and local developers have used, the New Markets Tax Credits and Historic Preservation tax credits, appear to have survived the first phase of tax and budget reforms. But that doesn’t mean they are safe in the long term.

“My biggest concern is the national situation,” Henry said. “In the future we could lose new market or historic credits that developers and others use to move projects forward.”

The national economy has also been pretty robust and has continued on an upward trajectory for about nine years now, since the Great Recession. It’s anybody’s guess how long the run-up will last.

“Everything is cyclical,” Henry said. “I have to make sure we have as strong a foundation as we can because eventually our national economy is going to turn and we have to be prepared for that. I worry about when that’s going to happen and how prepared we’ll be.”