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Pair of projects compete for county money

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County leaders say creating a Bartholomew County Economic Development Commission will be considered early next year, but a proposed county annex building would be competing for some of the same funds.

The county has set aside $250,000 annually in the Commissioners Economic Development Fund for projects, said Bartholomew County Commissioners President Larry Kleinhenz.

About $230,000 of that money has been spent during the past three years, and about $517,000 to $520,000 remains in the fund, Bartholomew County Auditor Barb Hackman said.

About $100,000 was used to improve a section of County Road 250W for commercial development, Kleinhenz said.

The fund has been earmarked as a possible source of construction money for a county annex building on State Street, which would replace the deteriorating building that used to house State Street School. Commissioners have suggested spending $3.5 million to $5 million for the project.

Both the County Commissioners and County Council must determine whether the current balance and future income of the economic development fund is sufficient to both create and operate a new economic development commission and assist in financing a new county annex office building.

The commission would be established to create new jobs and income growth. Traditionally, these commissions have focused on marketing an area to attract new manufacturers.

County officials do not have cost estimates for an economic development commission. They need to determine an operating budget for staff, employees, office space and supplies. In addition, an activities budget would need to be established that reflects the kind of activities the commission intends to pursue.

Kleinhenz, who offered the two proposals at different times this fall, was asked whether there might be financial problems in trying to pursue both ideas with money from the same fund.

“The fair answer to that is ‘possibly,’” Kleinhenz said. “But by the same token, county government is a part of economic development. So the question is: Is it good to use some of that money that’s sitting there for a building that is owned and financed by the taxpayers? In my mind, we have to at least look at it.”

No specific proposals or decisions about either project have been made at this time, and no vote has been scheduled. There has been no preference expressed for one project over the other by either the council or commissioners.

Kleinhenz considers the annex building a worthy economic development project because it could serve as a catalyst for development along the State Street corridor.

Other potential funding sources for the annex building include the county’s telecommunications fund, which receives up to $90,000 a year and has a balance of about $600,000. Another source could be Economic Development Income Tax funds, which generate about $1.7 million a year.

The county could consider using more of the $4.5 million in the rainy day fund. Hackman said almost $517,000 of that fund is earmarked for use in a new county annex building project.

While an economic development commission would fit the fund’s purpose, there are reservations. A number of County Council members expressed concerns about giving the proposed group the authority to create tax-increment financing districts. Redevelopment commissions can use a TIF district to snare rising property taxes in a designated area, redirecting the money to projects such as roads or utilities within the district. However, other taxing units like counties, libraries and schools lose the benefit of those rising taxes, as the district’s tax base grows.

In late September, council member Ryan Lauer said a TIF district might create an explosive growth in population without generating adequate funds for public services such as schools, police and fire protection. However, he did not specify examples of when or where that has happened in the past.

While Kleinhenz said economic development inquiries are rising in Bartholomew County, he emphasized there are no plans on the table that would require establishing a TIF district.

Jason Hester, executive director of the Columbus Economic Development Commission, agreed with Lauer to the extent that the county needs to be selective to ensure a TIF district doesn’t have a negative effect.

But Hester said it’s only the new taxes generated by increasing the value of undeveloped land that can be used for TIF purposes.

“Without putting in infrastructure, farmland will only generate taxes as undeveloped ground,” Hester said. “By putting in infrastructure, you make it more desirable. (TIF) is a way to self-fund an investment.”

While the county can approve incentives to lure new employers to Bartholomew County without TIF districts, Kleinhenz said those measures require both time and discussion.

“When somebody makes a request, they need an answer now.” Kleinhenz said. “We have found ourselves chasing our tail because we’re not prepared. I have found we cannot adequately address the questions that are being asked by potential employers without a redevelopment commission.”

Another concern expressed by the County Council is giving the commission the power of eminent domain. But Hester said elected officials can avoid those problems either by instructing their appointees that eminent domain is out of the question or by appointing themselves.

Hester added that state law prevents his board from expanding outside the city limits, which makes a joint city-county commission out of the question.

So Hester said if a company is considering a location outside Columbus, a commission must be in place acting on the county’s behalf that can provide competitive incentives.

“A county development commission would be a very welcome tool in our tool box,” Hester said.

But he cautioned the county about converting too many concerns into inflexible regulations.

“You have to take everything on a case-by-case basis,” Hester said.

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