News From Terre Haute, Indiana

Indiana Legislature

April 19, 2011

Bill could help old manufacturing sites

Aim is to encourage companies to invest in buildings to rehab

TERRE HAUTE — Thousands of lost manufacturing jobs in Indiana in recent years left behind a troublesome footprint: hundreds of big empty buildings subject to slow decay.

A bill currently in the Indiana Legislature could make some of those aging structures more appealing to investors.

Known as the Dinosaur Building Tax Credit, House Bill 1005 would shrink the size of vacant industrial facilities eligible for a state tax credit now offered only to behemoth-sized structures.

Supporters say it’s not a miracle cure for communities burdened with the remnants of long-gone manufacturing jobs.

It’s more like what Nolan “Skip” Kuker, an Indiana Economic Development Association board member from Logansport, calls “one more arrow for our quiver.”

The legislation is aimed at encouraging companies to invest in buildings that require significant rehabilitation to bring them back into use. There may be more than 100 industrial sites eligible under the bill’s language, according to the Indiana Economic Development Corporation, the state agency that promotes job growth in Indiana.

“It’s a good bill that will help communities all over this state,” said Rep. Rich McClain, a Logansport legislator who can cite several buildings in his district that might benefit from the bill.

Among them: an old, 230,000-square-foot tire-manufacturing facility. The current law applies only to industrial-sized buildings of 250,000 square feet or bigger.

The Dinosaur Tax Credit Bill, co-authored by Rep. Ed Clere of New Albany, downsizes several requirements that now have to be met for companies to earn what’s known as the industrial recovery income tax credit.

It keeps the requirement that local officials must designate a facility as an “industrial recovery site” and work with state officials at the Indiana Economic Development Corp. to promote the site. 

But it reduces the number of years, from 20 to 15, in which a vacant industrial facility must have been in service, and it reduces the percentage of a facility, from 75 pecent to 50 percent, that must not be utilized in order for the facility to be considered vacant. It also cuts, from two years to one year, the length of time that the facility must be vacant to be eligible.

The most significant change is the size of the structure. The House bill moves the bar from 250,000 square feet down to 25,000 square feet.

Clere said that reduction is critical. “We're sharpening an existing tool,” Clere said. “Because the credit has only been available for very large buildings, few have qualified.”

Smaller communities may benefit most from the reduced size requirement, said Rep. Wes Culver of Goshen. He noted that Elkhart County, with a population of less than 200,000 people, had the second highest number of “dinosaur” buildings in the state. Only Marion County, population of 900,000, had more.

The bill passed through the House with bipartisan support on a 98-0 vote in February. But last week, in a Senate committee, the bill was amended to push the size of the structure up to 100,000 square feet after a committee member described the smaller buildings covered by the House bill as “hamsters.”

Clere took exception to that description and likened the smaller structures to the velociraptors of “Jurassic Park” movie fame: not as a big as a Tyrannosaurus rex but just as dangerous in their potential for blight.

House Speaker Brian Bosma, who included the bill amon GOP priorities after Republicans swept last November's legislative elections, said late last week that he'd work to push the size requirement back down to 25,000 square feet.

Clere and other bill supporters want that to happen, but say that even cutting the size to 100,000 square feet will help. “We may need to get some successful projects done at that level to show the value of tax credit,” said Bill Dory, president of the Indiana Economic Development Association.

Supporters are convinced in the value. “The worse thing for a building is to be vacant,” said Kuker, who heads the Logansport/Cass County Economic Development Foundation. “It doesn't take long for them to become obsolete and to get the point where you can’t even give them away.”

Maureen Hayden can be reached at maureen.hayden @indianamediagroup.com.

 

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