From the Journal Gazette

In a county with double-digit unemployment, it doesn’t take much to persuade officials to do something – anything – to spur economic development.

That’s the situation DeKalb County found itself in last month when it adopted a resolution declaring all unincorporated areas in the county "economic revitalization areas" – streamlining a step in the tax-break process.

Some critics say it bends too far backward for companies that too often don’t keep up their end of the tax-break bargain, and because the declaration essentially declares every farm, wetland and rural home "obsolete."

Tax abatements allow new and expanding companies to phase in their taxes on new land or equipment they buy – pay nothing in the first year of the abatement and then pay an increasing percentage in subsequent years. That shifts the burden of those taxes to local taxpayers.

But supporters of such tax breaks say they’re necessary to bring in and keep local businesses.

Before approving a tax abatement, local governments must first declare individual sites as "economic revitalization areas," a legal designation declaring the sites undesirable for normal development and occupancy or with facilities that are obsolete. That process usually takes 30 days, on top of an additional 30 days to approve a tax abatement.

Allen County streamlined its tax-break process in 2004, designating the entire unincorporated county – residential and some agricultural areas excluded – as economic revitalization areas.

Even that move was more limited than DeKalb County’s recent declaration, which affected all unincorporated areas.

The economic times have made smaller regional counties rethink any little step they might take to attract development.

The news of DeKalb County’s resolution spurred LaGrange County into action. Keith Gillenwater, LaGrange County’s economic development director, said he had a preliminary meeting with his board about the idea last week.

The idea fits into Gillenwater’s hopes the county can streamline other services for incoming businesses through better coordination between county departments.

"At the end of the day, you still want to keep the playing field as equal as you can," he said.

What isn’t clear is how noticeable the benefits may be for counties that take the step.

Blackford County, south of Wells County, declared its unincorporated areas economic revitalization areas over the summer on the advice of a consultant and Blackford County Economic Development Director Rob Cleveland.

So far, Blackford County hasn’t received any leads because of its streamlining initiative, Cleveland said. But it’s one more tool to market the county – and to keep it competitive with neighboring Jay County, which had already taken the step.

"We’re just trying, like everyone else, to differentiate ourselves," Cleveland said.

Michael Hicks, director of Ball State University’s Center for Business and Economic Research, sees the competitive disadvantage to counties who don’t cut out that extra 30 days as low.

"Businesses tend to care a lot less about economic development pronouncements than anyone in economic development would like to think," Hicks said.

That said, every little bit helps in a recession – and Hicks said it makes sense for counties to prepare as much as possible to deal with pent-up demand when the economy swings upward.

"There’s very little downside to doing this," Hicks said. "It offers a tool for local governments to expedite local business decisions."

Hicks doesn’t believe such a pronouncement paints a county in a bad light, if only because counties everywhere are desperate for new business.

"Everybody’s sending that signal," he said.

DeKalb County Economic Development Director Galen Eberhart said image was a consideration when he decided to push for DeKalb County’s resolution on the advice of a consultant. He wanted to make sure businesses wouldn’t get the impression the county was so economically depressed it would declare everything in it obsolete.

"That thought crossed my mind," Eberhart said. " ‘Does this send a signal we did not intend?’ "

But by and large, Eberhart parroted other economic development directors who said expediting the abatement process is a bigger part of a larger marketing package. It’s probably not going to make or break a deal, he said, but it may be one more competitive edge to tip a prospect in DeKalb County’s favor.

"You’re trying to set the stage for when the economy turns around," he said. "We want more than looks – we want visits."

Longtime Auburn City Councilman Mike Walter is accustomed to being the lone dissenter in Auburn’s council chambers when discussing tax breaks, and he admits it’s difficult to discuss DeKalb County’s declaration without sliding into a discussion on the merits of tax abatements. He believes they’re too often given, and usually to companies that aren’t held accountable.

Those concerns aside, his problem with the DeKalb resolution is that it effectively includes every unincorporated parcel of land in the county, down to the rural cemetery with gravestones dating to the 1800s. Walter calls the notion of labeling everything in the unincorporated county obsolete "absurd."

It’s not that he’s worried someone will try to develop, say, a cemetery. In any case, county officials have argued that zoning regulations will still apply.

But Walter sees the designation as one more breakdown in the system of checks and balances governing local development.

"When a significant industrial prospect comes along, we tear up the rules," he said. "It doesn’t really matter what’s in the way. Local officials will gladly sweep things aside."

Walter believes the city of Auburn has taken a more visible step in readying itself for the economy’s recovery in its continuing rollout of city-provided fiber-optic service.

"Give the businesses the services," he said. "Give them good, reliable services and infrastructure."

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