FROM THE DESK OF SENATOR DAVID LONG
As you are reading this, a new initiative to help downtown Ft. Wayne is underway in the State Senate. Senate Bill 180 (SB 180), which I have authored, attempts to strengthen downtown CRED districts (Community Revitalization Enhancement Districts) with the goal of making them even more viable economic development tools for cities.
Last year, Senator Tom Wyss and I rewrote the CRED law to make them downtown oriented, but just for secondclass cities (which are defined as all cities with populations between 35,000 and 250,000). Many observers and advocates for city issues called this new law the most important economic development opportunity for Indiana’s cities in many years.
We all know that our downtown area, like most others in our state and elsewhere, is suffering from a loss of employers and commerce as the ongoing trend toward locating closer to the suburbs and the Interstate continues. Yet I believe that a healthy, vibrant downtown remains an important piece of a community’s identity, not to mention critical to attracting new businesses to our region. Downtown, like it or not, is important to Ft. Wayne’s future, so we need to do what we can to keep it healthy and growing.
CRED districts recognize that some extra incentives need to be in place to allow downtown areas to compete with the “greenbelt” areas (ie undeveloped land) closer to the Interstate. The infrastructure, utilities and transportation routes are in place downtown; what is missing are the people, or a positive image, or the nightlife, etc. etc. By providing some extra incentives to a developer for locating a new project in a CRED District, we can help the downtown area compete with the cheaper, more accessible land closer to the Interstate.
For those of you who don’t know, CRED districts may capture up to $750,000 per year of new state sales and income taxes generated by new development within the District. Normally, this money would go directly to the State. However, by diverting this money back into the District, a valuable development tool and crucial source of dollars is created. The City must annually contribute $250,000 of its own dollars in order to get the full State contribution, so that the sum total annual investment is $1 million.
SB 180 contains several proposals to further enhance CRED districts. First, it would deal with a flaw in the law that needs to be corrected. CRED districts can have a lifespan of up to 15 years, after which they disappear. They are created by the city petitioning the State. Once accepted by the State, the 15-year period begins to run. Yet there may not be a new development in place to take advantage of the diversion of tax dollars. Remember, the sales and income tax dollars can only come from new developments. So, you say, the answer is to simply not create the District until you have the new developer firmly in hand. Well, that really doesn’t allow you to advertise the district to potential Developers, because unless you have the District approved, you can’t guarantee anything. Also, new development can mean constructing a new building. By its very nature, that could mean at least a year or more before the development is ready to start generating the state sales and income taxes that can be diverted back to the District.
So here is the answer: allow a City to create the CRED district, but to not have the 15-year period begin to run until the state tax dollars are actually being diverted. In this way, you can have an existing District that you can advertise and to which you can attract developers, but not have the life of the District shortened while awaiting that development to either commit or to get constructed. This seems like a simple thing, but it is extremely important to Ft. Wayne and other cities, and needs to get done.
Another key change proposed would be to allow low cost liquor licenses to be obtained by anyone opening a restaurant within the District. Everyone involved with trying to rebuild downtown agrees that a healthy nightlife is crucial, and that means good restaurants to attract diners. Unfortunately, it is also usually true that for a restaurant to be healthy, it must be able to hold a three-way liquor license. These licenses are sold on the open market, and are limited in number, so their price can be as high as $250,000. That is prohibitive for many potential entrepreneurs, and with a lack of downtown traffic already a problem for getting restaurants to locate there, something needs to be done to jump start downtown’s life after dark.
This type of inexpensive license is already available in Lafayette, Evansville, Gary, and Indianapolis as part of those cities’ “river” development projects. SB 180 seeks to give CRED districts the same opportunities. Concerns about how many of these should be available will need to be worked out before this bill can become law, and I certainly don’t want to proliferate downtown with tons of new bars. However, some artificial stimulant needs to be added to the downtown nightlife equation, and this is probably as good a tool as any.
There are other pieces to this legislation as well, but I don’t want to put everyone to sleep who reads this article, so I’ll stop here. Just know that I am working closely with the City of Ft. Wayne’s economic development team to get this legislation passed, and have confidence that it can happen this year. Remember, we can’t ever stop pushing economic development and jobs for our community and region; a healthy, vibrant future for all of us, but especially for our children, is at stake. We owe it to them to do everything possible to make our community the best that it can be.
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