How’s Our Investment Doing?

How’s Our Investment Doing?

It’s been a few years now since the Regional Cities Initiative started rolling in various places around the state, and if you’ve been following Indiana news since then you’ve probably noticed several excited communities as they announce plans long-awaited projects they’ve been able to fund with support from the initiative. Once the state had gathered proposals from different communities from throughout Indiana, three key regions were chosen to receive funds to match their development plans. The Northeast, North Central, and Southwest Regional Development Authorities each received up to $42 million from the state to match the public, private, and other state-level investments that each had secured for their projects.

Each one of these three regions have a lot to gain in bringing their proposed projects to life. As any intuitive taxpayer should be wondering, how big of an impact have our dollars had up to this point?

It’s important to note that many of the projects haven’t begun yet; several are kicking off this spring. A wealth of initial data has become available though, and its findings are optimistic. The Ball State University Center for Business and Economic Research (CBER) recently published an interesting preliminary report that detailed how the Regional Cities Initiative is doing up until this point. Authored by Michael J. Hicks, PhD, the director of CBER, the report provides an early look at all the state has to gain.

Let’s begin by taking a look at some truly impressive numbers, the sum totals of all of the funding that’s been committed up through this point.

  • Participating Counties: Elkhart, Marshall, St. Joseph, Kosciusko, LaGrange, Steuben, Noble, DeKalb, Whitley, Wabash, Huntington, Wells, Adams, Allen, Posey, Gibson, Vanderburgh, Warrick
  • Number of Projects: 64
  • Private Investment: $835,558,756
  • Regional Cities Initiative: $122,111,537
  • Local Investment: $251,187,226
  • Other State Funds: $35,485,000
  • Total: $1,208,857,519

The report was clear to point out many goals that Indiana communities have set out to accomplish under the Regional Cities program involve long-range impacts that are not necessarily possible to quantify this early in the game. For example, a lot of the communities that have already received funding are planning to establish quality of life amenities to their areas in an effort to attract new residents into their populations. Also, some of the construction projects themselves may take several years to complete, making data unavailable at this point for some metrics.

That doesn’t mean modeling isn’t possible. In fact, the report used a method of modeling that was able to provide insight despite the unknowns in this case.

Looking at 18 of the counties that are part of the initiative and the 64 projects within them that have attracted a total of $1.20 billion in investments, CBER researchers estimate the investment would produce a population growth of about 7,960 people over the next eight years. That’s in addition to the current population projections that have been forecasted without considering the Regional Cities impact. The report pointed out this figure only accounts for new Hoosiers, not ones that moved from one part of the state to another.

There’s a lot to be gained on the financial side of things too. The investments are expected to only boost the Gross Regional Product (GRP) of the impacted areas, although its estimation does cover a wide spread at this point. Between $234.3 million and $817.7 million per year is expected to be added to the GRP during the construction phase.

The report stated the Gross Assessed Value of the investments would top $888.9 million by 2020, and the state would recover a total of $54.7 million in tax revenue in the first three years of the project. That’s a pretty quick turnaround, considering each of the three regions received about $42 million.

The optimistic takeaway from all of these figures is the fact these estimates are likely on the conservative side. For example, they don’t take into account the impact the new amenities associated with the projects could have on population growth, meaning the real impact these investments eventually produce could very well be much larger than what’s reflected here. However you shake it, that’s good news for the state of Indiana and all of the communities currently undertaking revitalization efforts. It looks like the payoff could be a big one.

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