Yesterday as I sat in on a meeting that I arranged with a fast growing IT client who is also an economic development advisor, I couldn’t help to consider how far reaching the benefits of incentives given to businesses in Central Indiana have extended. 

 

My business is commercial real estate brokerage, but specializes in what's known as Corporate Services, or commonly known as "tenant representation".  I also sit on the board of a state wide information technology organization called TechPoint.  In this role, I work with many fast growing businesses; many of who have applied for, and received, state and local government assistance to help them grow.  The theory of this assistance is that in the long-term these businesses will generate more jobs, which of course is good for our economy and our society as a whole.

 

Often, critics state that benefits gained from providing businesses incentives is essentially corporate welfare and has little impact on the course businesses would take without incentives.  I agree that many of these businesses would be successful with or without assistance from the State of Indiana or the local communities.  However, I also know firsthand, through my work with my clients Aprimo, Baker Hill Corporation, G&S Research, and Princeton One, the positive impact that economic development incentives have caused. 

 Consider this scenario:
  • A company receives personal property tax abatement for a significant capital investment it makes to expand its business.  Further, it is given grants to provide new workers job training.
  • The business makes its investment in new equipment.  The equipment supplier, its employees, and trades involved in installing the equipment benefit.
  • The recipient business signs a new lease to expand its offices.  The building owner, the contractor that builds the new offices and their respective employees benefit from the work.
  • The recipient business expands its telecom and IT infrastructure to support the growth and the respective telecommunications and IT vendors and their employees benefit.
  • The newly expanded offices are fit-up with new furniture provided by a local furniture dealer.  The dealer, its employees, and the furniture installation company all benefit.
Although this is a simple scenario, I think you get the picture.  Incentives given to business to aid in the growth of these businesses can cause significant and somewhat immediate benefits to the economy and the community as a whole.  As mentioned earlier, I've been fortunate to work with a number of firms that have received growth incentives and have been one who has benefited, along with my employees and their families.