In which a local resident submits a comment about a recent "thumbs up" designation that appeared in the local newspaper; calculates the cost of creating a single job at the proposed "horse hospital"; discusses land use and zoning issues in the area; questions the size of the new spec building at Intelliplex and ties it all together by offering alternative proposals. Plus, he does all that in approximately 1,000 words. Read 'em here, then if you want to contribute your own comment, use the handy form at the bottom of the page.
Dec. 1, 2010
After 10 years working in, or reporting on, economic development, I must take issue with the The Shelbyville News editor's "Thumbs Up" on Nov. 27 for the proposed Purdue horse clinic, an enormous expense and a missed opportunity.
The city and county have pledged $2.3 million to the project which, according to reports in the newspaper, will create six (6) jobs, none likely filled by local residents because they'll involve highly technical veterinary research.
That's $383,333 per job which may be a national record, and I'm not joking. I did some online research and couldn't find any economic development project in the country that's received anything close to that amount of per-job local funding.
By comparison, the entire state and local incentive package for the Honda project in Greensburg, to create 2,000 jobs, was about $71,000 per job - and included building a new exit off the highway. We've committed nearly five-and-a-half times that amount to create six jobs, with no guarantee more will follow.
I attended the Shelby County Plan Commission meeting Oct. 26 when the commission approved rezoning the site of the horse clinic project, 71 acres on Bassett Road just north of Intelliplex (note: the same people who brought us Intelliplex are bringing us the horse clinic, which, given the dismal performance of the tech park, ought to be a big "whoa" right there).
As I understand it, the city and county will purchase the land and give it to the university. Purdue's attorney, Denny Harrold of McNeely Stephenson Thopy & Harrold, told the plan commission that Purdue only needs 20 to 30 acres for the horse clinic. Twice Mr. Harrold used the word "sold" to describe what would happen to the other 40 to 50 acres. That begs the question: how can the city and county control the economic development of a site they don't own?
Zoning is about the only way, and plan commission member Terry Smith raised concerns about the types of businesses allowed under the new zoning. The commission stipulated that no commercial grain elevator could be built, though Purdue may have a small one for the horse clinic.
However, the commission permitted food processing operations, after Mr. Harrold assured the panel that they "won't be another Bausback's," the notorious animal rendering plant that used to perfume Shelbyville with a smell like week-old road kill in July - neighbors of the horse clinic site in Country Club Heights must be relieved.
Purdue has until June 30, 2014 to raise its share of the $10 million project cost. While an economic development partnership with Purdue is very welcome, this project, as structured, is an enormous expense with little return to the community and could have been done much better.
I don't like to criticize without offering alternatives. Here they are.
The Shelbyville News on Nov. 29 reported that the spec building is under construction at Intelliplex, and Mayor Furgeson was quoted saying he's trying to get Rose-Hulman to take "educational space" in it.
In a Sept. 2 letter to the editor, I objected to Mayor Furgeson's plans to put Ivy Tech in the spec building when the city's comprehensive plan, approved only last June, calls for putting a community college downtown to help revitalize the Public Square, a much better idea.
The spec building is also a good idea - it's required by the Indiana Economic Development Corp. (IEDC) to keep the state certification of Intelliplex and the tax advantages that come with it. The certification permits the city to recover up to $5 million in state income and sales taxes, and local taxes, from businesses in Intelliplex for reinvestment in the tech park.
But the IEDC stated in its recertification agreement with the city that the "flexible use building" must have "laboratory space or other facilities and amenities suitable for housing high wage, technology businesses." How do college classes meet that requirement?
Additionally, state law requires a certified tech park to have a "business incubator... for the primary purpose of attracting one (1) or more owners or tenants who will engage in high technology activities" (IC 36-7-32-5). I haven't heard the mayor or anyone talk about establishing a business incubator in the spec building.
And why is the building 50,000 square feet when Mayor Furgeson was quoted in the July 17 issue of the Indianapolis Business Journal (IBJ) saying the inquiries he's getting about the spec building are for 5,000 to 10,000 square feet?
By comparison, the Indiana Wesleyan building is 21,000 square feet. Why build a structure two-and-a-half times the size of the Wesleyan building when prospects are looking for a fraction of that space? Why not make the spec building about 25,000 square feet, without college classrooms, and designed so it can be quickly and cost-effectively expanded if need be? That would be a huge savings to us citizens in the near term, makes much more long-term sense in this economy, and it's not too late to do that.
Now I'll tie this in with the Purdue horse clinic and a missed opportunity. Purdue runs the Purdue Research Park, the #1 research / business incubator in the state - one of the most successful in the country - and three of the other top 10 business incubators in the state, as ranked in the Nov. 1 issue of the IBJ.
When we were negotiating with Purdue about the horse clinic, why did no one say, "Ok Purdue, you want our help with your horse clinic, here's the deal: You put a research facility in our spec building, find us a start-up business to incubate in it and help that business get going, and you've got your horse clinic."
Was that too much to ask then, and is it too late to negotiate that now?