Incentives Lead to Business Expansion = More Jobs 11/3/13

Economic development has been taking off in Northwest Indiana over the last two years, after a string of growing companies announced plans to invest millions of dollars and add dozens of jobs.

Last year, the number of major Northwest Indiana business expansions that received state incentives grew to 14 from seven the year before, according to Indiana Economic Development Corp. records.

So far this year, the state has awarded tax breaks and other incentives to 12 companies expanding or investing in Lake, Porter and LaPorte counties. Collectively, those businesses have pledged to hire more than 970 workers over the next few years and to invest more than $303 million in growing their operations.

“We’re doing great,” said Donald Koliboski, economic development director for the Northwest Indiana Forum, a local economic development agency that attempts to lure more companies to the region. “It shows Northwest Indiana is a strong place to do business.”

Much of the recent growth has taken place in the manufacturing, logistics and health care sectors, Koliboski said. But the region also has attracted more white-collar office jobs, such as at Falk PLI Engineering and Surveying’s headquarters expansion at the AmeriPlex at the Port business park in Portage.

In 2012, the 14 Northwest Indiana companies that won state incentives said they would collectively hire an additional 492 workers and invest more than $157 million in bigger buildings and more equipment.

Heavy machinery equipment parts distributor ITR America LLC invested $6.2 million to build a new, larger headquarters in the North Wind Crossing Business Park in Hobart, where it added new warehouse racks and other equipment. The logistics firm planned to add up to 20 more workers to supply undercarriage components, track adjusters and repair parts to the heavy machinery industry.

Michigan City-based Vanair Manufacturing, which makes vehicle-mounted air compressors, generators, tool lifts and other products, invested $1.2 million to make its 60,000-square-foot building about a third bigger. The company needed more manufacturing space to keep up with demand and grow its market base. CEO Ralph Kokot credited Vanair’s employees for the growth.

“The knowledge of our seasoned veterans and the eagerness of our younger engineers to absorb that knowledge has contributed to industry-leading innovations and product development,” Kokot said. “Our ability to adapt to market demands rapidly has allowed Vanair to penetrate a host of very diverse markets.”

The amount of economic development activity in the region has picked up drastically since the depth of the downturn in 2009, when only a single company was awarded state incentives for an expansion project.

Indiana typically only offers breaks on state taxes, training grants and other incentives for big manufacturing, office or logistics projects that involve at least dozens of jobs or millions of dollars in new investment. The numbers do not reflect smaller projects that also might result in job creation, such as the new Volkswagen dealership in Highland or the Shops on Main shopping center in Schererville.

Of late, such development also has been picking up throughout Northwest Indiana and Chicago’s south suburbs. Lansing, for instance, recently has landed a 24-hour Super Walmart store, a newly renovated Philips Chevrolet dealership, an IHOP restaurant, and an unnamed national retailer that plans to redevelop a long-languishing site near downtown. The new Torrence Avenue Walmart will replace the existing big-box store in The Landings shopping center, and employ about 450 to 475 workers. The expansion will offer a net gain of about 200 jobs after the existing Walmart closes.

The 170,000-square-foot store will have an additional 30,000 square feet of interior retail space that is typically occupied by a Subway restaurant, an optical center and similar business, said Kristi DeLaurentiis, director of planning and development for the village. The big-box retailer is a big draw that is already spurring nearby redevelopment, including a Loubie’s Pancake House, she said. The Hammond-based family-style diner recently opened its first Illinois restaurant in Lansing.

A few Illinois businesses recently moved across the state line before expanding, in order to lower their business costs. MAC Medical Supply Co., Tec Air Inc. and Land O’Frost’s corporate headquarters recently left southern Cook County in favor of Munster. The owners all cited lower taxes as a primary reason for crossing the state line.

“Some use the word poaching when these employers make the decision to come to Indiana,” Indiana Secretary of Commerce Victor Smith recently said at The 2013 Rail Summit in Chicago. “It’s not poaching. They’re making informed business decisions.”

The number of leads from companies interested in potential Northwest Indiana locations, whether from Illinois or elsewhere, has grown from about 102 in 2009 to 236 last year, Koliboski said. Leads represent serious interest from businesses that are far along in the site selection process and know exactly what sort of property they are looking for, such as how many square feet they would need if they are planning on taking over an existing building.

So far this year, the Northwest Indiana Forum has seen leads from companies interested in expansion projects or new operations increase by about 25 percent, Koliboski said.

“We’ve been seeing growth, and we expect the trend to continue in 2014,” he said.