|Northwest Indiana Business Journal|
Article Title: Northwest Indiana’s Age of Discovery
By: David Lasser, CCIM
sure are a multitude of Illinois license plates around here lately and
it’s a great sign of things to come. As the metropolitan Chicago
market continues to discover Northwest Indiana’s business and lifestyle
advantages, the signs of its presence will become increasingly glaring.
Residential subdivision development is steadily pushing further and further into rural parts of our area as well as filling in many of the formerly undeveloped remaining lots in long established neighborhoods. Projects ranging from downtown city apartments to golf course communities abound now in various planning and construction stages throughout the region.
Retail development continues to surge with several “power centers” planned and under construction. The growth of retail in Northwest Indiana is tied to 2 key factors. First, that we fall within the Chicago area advertising media umbrella and that our demographics increasingly meet the requirements of the retailers and the developers that build space for them.
We are entering a period that probably will never turn back, whereby nearly every national retail or restaurant chain or franchise that enters the Chicagoland market will open units in Northwest Indiana. Our “demographics” paint a picture for retailers such that for any given intersection under consideration, they can evaluate everything about us as a community. They look at population, average number of persons per household, average income, average age, shopping category projections and more to confirm that a market exists for their products. As traffic counts arise from increasing population growth, more retail can be supported as well.
Our regional office market has “good news – bad news” sides to it. The good news is that we have an average occupancy rate of 90-95%. The bad news is that the vacancy rate of larger Class A space needed to attract the Fortune 500 type companies is very low. Chicago and its suburbs on the other hand have a great selection of vacant space with which we must compete. Our strong regional economy and high occupancy rates are what developers and lenders prefer, and exciting growth in this high visibility sector is sure to come.
Northwest Indiana’s industrial marketplace is world class in many respects. What a testimonial it is for all of the major steel mills to pick these South Lake Michigan plants for their flagship modernization investments. Among our industrial advantages are lower real estate prices, lower real estate taxes and aggressive municipal and state incentives. In addition, our workman’s compensation insurance rates are now the lowest in the country. Once again though, is it bad news to say that there are very few larger available existing buildings or is it good news to show how strong our economy is? To attract manufacturers, distributors and light industrial service companies at a level of activity similar to our areas retail growth, we need to be prepared. To prepare, is first to acknowledge that, but for a few offensive exceptions, these companies are desirable for the jobs they bring, the homes their employees fill, the businesses they patronize and the tax base diversification they create.
Residents and elected officials of every community need to understand the decision making process that occurs for these companies. In many cases, the location preference starts as vague as being anywhere in Northwest Indiana.
The process then involves evaluating available buildings and developed industrial park sites. Next comes a slew of questions that require accurate and quick responses concerning issues involving the availability of utilities, permitted zoning uses, parcel subdividing or assembling and available development incentives such as tax abatement. Tax abatement is however a term that is often misinterpreted. It has become a benchmark economic development tool used by communities across the country to help facilitate both redevelopment of older areas and new development as well.
A TIF or tax increment financing district is another tool that should be considered. The basic premise again is to help facilitate development to occur at a faster rate than it might without the installation of infrastructure such as roads and utilities. A TIF bond is sold to pay for such improvements. The bond is retired by the increased taxes from the subsequent new real estate development.
We are all very fortunate to have such an environment materializing for a stable, growing area economy. Real Estate brokers, developers, the NW IN FORUM, NIPSCO and chambers of commerce are among the many entities all working hard to bring prospects out to NW IN. Cohesive networking is the key to realizing the region’s potential.
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