Letter to NAC: "You need to support your existing businesses with facts, not wants."

This excerpt from the minutes of last month's merchant meeting caught the attention of regular reader Mike Ladd.

The next merchant meeting is July 19 at 8:30 a.m. at Cafe 157.

"L.R. said A study was done of what was needed Downtown in the early 90”s and might be of interest for us to take a look at now. He thought it was in the redevelopment office (John Rosenburger’s office L. also suggested we play off more on Louisville and the boat to draw people to our area."

Ladd, former head of the formerly independent New Albany Urban Enterprise Association, writes:

Admittedly, every day I read your blog I see more clearly why New Albany is behind its neighbors in Clark County. A study from the 1990s is not really going to do much for 2016 New Albany.

More recently, there is a 2010 Market Study paid for by the (now apparently defunct) Urban Enterprise Zone, showing exactly what types of business the town can support. And that's exactly the point: it's not about the types of businesses you want; it's about the types of businesses you can support.

This administration has good information under its nose and refuses to use it. In fact, if local business community members were smart, they'd push for an update of this report; it's about a year past due. But then again, I remember the city economic development director (and I'm using air quotes with that title) telling me he doesn't believe in market studies.

How are you supposed to know what your city can support if you don't gather the intelligence that tells you? It's not so much about wish lists -- you can bring in what you want, but if you can't support it, what good does it do you?

You need to support your existing businesses with facts, not wants.

ON THE AVENUES: They didn't ask.

ON THE AVENUES: They didn't ask. 

A weekly web column by Roger A. Baylor.

(There was a special edition of this column on Monday: ON THE AVENUES MONDAY SPECIAL: River View's sweet dreams are not enough)

After the rear wall of the 153-year-old Peter Weinmann building at 8th and Culbertson crumbled early in 2011, there was an Indiana Landmarks-led rescue effort. Something about it kept bothering me.

Having previously served a stint on the board of the Urban Enterprise Association, I had a hazy notion that elements of “our” program for the zone might have applied to the situation with the deteriorating structure, but being out of practice and otherwise distracted by work, I couldn’t piece it all together.

Eventually I asked my question to the UEA’s director, Mike Ladd, and he filled in the blanks. I wanted to write about it then, but readers must understand that everyday life for the UEA during the final year of the England/Malysz administration’s last-ditch, crony-empowering megalomania was exceedingly difficult. While the 8th and Culbertson situation was discussed often here at the blog, I remained generally cautious, worried lest the tottering administration’s clear assault on the UEA worsen in intensity.

Now it’s 2012, and in spite of the big flush at midnight on New Year’s Eve, the UEA’s future remains almost as unclear as before. Once again there have been proposals at the state level to dismantle the program, which in my view would be a foolish mistake given what the zone is capable of providing to the community.

Here in New Albany, both council and mayor must finalize their UEA board appointments; without these, there can be no board, no meetings, and among other things, no pay packet for Mike Ladd – which is profoundly unfair to him, although just a bit outside my reasoning for covering this material today.

The question I asked Ladd last year was this: “Was there a better way to save the building at 8th and Culbertson?”

Here is his response, tardy but thought-provoking.

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"Being inside the Urban Enterprise Zone, the building at Eighth and Culbertson is eligible for the EZ-2 Investment Deduction; meaning that the purchase price and any subsequent improvements are eligible for the tax credit, as long as a private party makes the purchase.

"However, the EZ-2 does not work for Indiana Landmarks, which now owns the building. The reason is because Indiana Landmarks is a nonprofit organization and this deduction applies to for-profit entities only.

"The best-case scenario would have been for the purchaser to buy the building in its then-collapsed condition. The purchaser then could have applied to the county assessor’s office for a new (and probably lower) assessed value. Had we been involved, we would have assisted the purchaser with that effort.

"Currently the property is assessed in the $74,000 range. The purchaser could have bought the property for $20K (which is the price Indiana Landmarks paid), gotten the property reassessed and then begun his or her improvements. This new assessed value ($74,000 or lower) would have been set as his assessed value for the next decade once he claimed the EZ-2 Investment Deduction.

"As it stands now, the taxable portion of the stabilization costs actually increase the assessed value of this building, thus reducing the potential savings the new buyer could have claimed. The purchase price under the increased assessed value plus his improvements will now be all he can claim. Just to make it clear: any purchaser has lost out on the savings he could have realized without anyone stabilizing the structure.

"To further illustrate the point: We know that it costs $80K ($20K for purchase plus $60K for stabilization) to put the building into usable condition. This $80K has the effect of increasing the final assessed value at the time the private purchaser makes the buy. Now we’re looking at an assessed value of $154,000 instead of $74,000. (I’m talking theoretically on the assessed value here, but it illustrates the point. I doubt the assessed value will be $154,000, but the stabilization costs will definitely increase the assessed value significantly.)

"The stabilization costs are going to add to the increased assessed value because Indiana Landmarks, Redevelopment Commission, Horseshoe Foundation and the Enterprise Zone are all non-profit or governmental entities, and are not eligible to apply for the EZ-2 investment deduction and therefore not eligible to apply at this time (or any other) for this deduction.

"The bottom line is that any purchaser has been deprived of additional savings he could have realized over a decade-long period; limited funds from the public and non-profit sectors have been diverted from (arguably) other important projects."

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In December of 2011, the News and Tribune quoted Greg Sekula of Indiana Landmarks:

"Sekula said a contractor signed an intent-to-purchase agreement to buy the property if the structure can be upgraded within a certain time frame, and there’s other interested parties in the building as well."

To be sure, it’s far too late for this question, but in light of what the UEA might have been able to do to help prospective buyers of the Peter Weinmann building, and owing to fundamental considerations of transparency, surely it’s fair to ask whether any of these zone mechanisms were mentioned during the original closed-door meetings, which led to the quintessential New Albanian “rescue” plan by power-broker’s diktat?

Why ask?

It’s because transparency is important, and in this case, there was none. It’s because we always should learn from our experiences, so as to avoid past difficulties and promote better future decision-making. It’s because the UEA already has a toolbox, and doesn't it make sense to use the UEA toolbox as part of a pre-emptive, pro-active plan, as opposed to casting around for convenient ATMs to be plucked when a crisis like this finally comes?

Of course, it also makes more sense to enforce the ordinances we already have as a city, so our elderly buildings and the people in them are not neglected to the point of collapse … but one miracle at a time, please.

What is the brand, who does the branding, and other necessary questions.

I attended the branding meeting last week at the YMCA, and there'll be more to say on this proposal, although for now, let's concede that while branding downtown is a good and desirable idea, the way this most recent best branding plan has come to fruition raises numerous red flags, as so often been the case in such matters.

What's the brand? Is it referencing price point, lifestyle, multi-cultural? What's the definition of downtown? Who gets to play? Why this marketing firm and not that other one? Is it for independent businesses, chains or both? Are ads on bus stops in Louisville really reaching the chosen target audience? What is the chosen target audience? Why not Columbus or Indianapolis? Why not all the people in Floyd County who still don't know downtown exists?

And: Why not ask the intended beneficiaries first, rather than permit the proposal to trickle down to them?

It's the same argument I recently conveyed to planners at One Southern Indiana, which after remaining uninvolved for so long when it comes to local independent small business, has elected to randomly choose one marketing program out of many to tout (3/50), then feed it to the intended recipients from the top down: Here's your medicine, and leave bridge tolls out of it. All well intended and good, but not a strategy calculated to involved businesses.

The simple fact is that for the entire time I served on Develop New Albany's volunteer board (2006-2010), our officially chartered Main Street organization consistently took a hands-off approach to economic development in the context downtown businesses, preferring to interface via an intermediary in the form of a loosely organized merchants circle.

Now it is 2011, the going's marginally better, and more than a few small businesses on the ground have done some (probably much) of the heavy lifting in terms of financial necks on chopping blocks, which is as it should be.

Now, in 2011, in swoops a specific marketing firm (nothing against Dudgeon, but couldn't this have been a "bidding" arrangement?) with a specific marketing proposal.

Now in an election year the funding magically appears, almost certainly emanating primarily from the city and the UEZ, and voila! At long last, downtown marketing ... but, alas, from the top down, not from the bottom up.

(For Paul and the other Young Turks at DNA, heaven knows I understand you're working very hard to accomplish something, and please don't take any of this as a rebuff to your efforts. You are the future. I'm not expressing knee-jerk opposition here, just asking questions that need to be asked so that the general reading public can consider them. These things always seem to occur to a predetermined cadence, and we need to ask why.)

Conspicuously absent from these proceedings is New Albany First, perhaps the only example in recent memory of an organization embracing all applicable businesses within the city limits, one choosing to gradually evolve from something approximating genuine grassroots consensus, with the stated object of creating an independent business association and implementing "buy local" marketing efforts.

Yes, there is an admirable degree of togetherness to be praised whenever DNA, UEZ and the city combine forces. At the same time, wouldn't it be better to have had -- to still have -- everyone at a table so that we can sort through these many organizations and proposals, and come up with a policy that reflects a higher standard of unity?

To be fair, this applies to 1Si, too. Although I opposed it, the council gave a monetary stipend to 1Si, and 1Si is indicating that it wants to give some of it back by backing the 3/50 scheme. The point it, there are five or six organizations interested in aspects of the same objective. Can't they all come together, divide the labor, and let the actual businesses being branded receive collective "credit" rather than the identity of the umbrella itself?

Sorry. I just had to ask.

Advertising blitz would tout downtown New Albany businesses; Develop New Albany, UEZ and city partnering on promotion, by Daniel Suddeath (One Southern Indiana Newspaper)

Two New Albany organizations are collaborating with the city to fund an advertising campaign focused on branding the downtown entertainment district.

Develop New Albany announced Wednesday it will partner with the city and the New Albany Urban Enterprise Zone to cross promote local restaurants and retailers possibly as early as March.

The entities have pledged a total of $30,000 toward the $40,000 project, which will be administered through the New Albany marketing firm Dudgeon & Company.

UEZ's Ladd: "We need real discussions showing what this enterprise zone means to New Albany."

The message below is from Michael C. Ladd, Executive Director, New Albany Urban Enterprise Zone Association. It is self-explanatory. For background, here are the three most recent Tribune pieces about the legislation:

LETTERS: Feb. 10, 2010
EDITORIAL: Squashing tax credit would hurt New Albany
Bill to freeze UEZ credits OK’d by State Senate

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Senate Bill 236 has a hearing in the House Ways & Means Committee on Tuesday morning, February 16 at 10:00 a.m. in Indianapolis.

This bill will suspend for two years many of Indiana’s local level economic development incentives. Two of the enterprise zone program’s incentives are included in this bill. But there is more involved than the enterprise zone. The bill would also suspend the teacher summer employment tax credit. The neighborhood assistance credit is involved. It provides that a community revitalization enhancement district tax credit may not be awarded for a qualified investment. It provides that a tax credit may not be awarded a health benefit plan. It also provides that a small employer qualified wellness program tax credit may not be awarded any longer. Lastly, the bill provides that a taxpayer may not claim the patent income exemption with respect to a particular qualified patent unless the first taxable year in which the exemption is claimed begins before January 1, 2011.

Various interest groups are coalescing and have plotted a strategy designed to kill this bill in committee. Right now, the chances are it will get to the floor, where it will be attacked on second reading via amendments.

The zone directors have been asked to show the need for the zones within their respective communities, demonstrated by the usage of their incentives and/or programs operated by the zones.

We have settled on requesting from the community emails of support. We’re going the email route due to time constraints. We’re not looking for platitudes or testimonials. We need real discussions showing what this enterprise zone means to New Albany. This enterprise zone is particularly vulnerable at this time because we are undergoing our 10-year renewal with the Indiana Economic Development Commission. If this bill passes, there will be little reason for IEDC to extend the zone for another five years.

Tell us. We need your stories and support.

Have you used an incentive? Why did you use it and how did it help your business?

Have you participated in a program or a particular project operated by the zone? Tell us why, and what it meant to do so.

Is there a specific project that the zone has done that you think (landscaping/new street furniture (trash cans and benches), youth mentoring program, partnerships that have been created, etc.) has benefited the community?

As a zone employee working in a zone business (or the reverse, an employer hiring zone residents) and have used the employer/employee tax deduction, how has that helped you or your business?

If you have used the investment deduction, how did that help your business?

Has the façade improvement grant program helped when you used it? How did it help? Could you not have accomplished your project without using the grant?
If you are not sure what the zone has done, go to http://www.nauea.org/ and click on the “Past Projects” tab.

Please send your emails to mladd_uea@yahoo.com. We need these by Monday night at 5 p.m. I will print them out and take them with me when I appear before the committee on Tuesday morning.

Thank you for your help.

Coming Friday, February 6: Tax education seminar for Urban Enterprise Zone businesses.

A quick look around downtown ... courtesy of the Urban Enterprise Association.

Mike Ladd of the the New Albany Urban Enterprise Association (NAUEA) provides these photos of a walk around downtown New Albany yesterday. Click on the image for a larger view.

So many things are happening that it's difficult to keep track, but here are a few random notes.

I'm a member of the UEA board, and we're seeing a record number of applications for facade grants as more buildings undergo renovation. The UEA has taken a lead role in the landscaping project currently underway downtown, and is seeking other grants to continue the project, both from the Horseshoe Foundation and in conjunction with Develop New Albany.

Meanwhile, Develop New Albany has sold the White House Center for redevelopment, and the organization's "First Tuesday" networking gatherings (next up on August 5 at the Honeymoon Mansion on Main Street) have been a great success.

Don't forget that it's Wednesday, and that means the Farmers Market will be running downtown later this afternoon.

I'm told that there'll be a "before" open house this coming Sunday (the 27th; 4 - 7 p.m.) at the Fair Store, now under rehab on Market Street just across from the soon-to-be-revived Connor's Place (and less than two blocks away from NABC's new brewery and taproom project, for which I'll provide an update later this week).

If Matt and Jessica are reading ... want some beer on Sunday? I may know how to make that happen.

As with Mike's photos, this isn't intended as a comprehensive survey. What are we leaving out?

New Albany's show tonight, and beautification underway.

It has been an exhausting past few weeks, and it seems a break is merited. NABC will be open today (Thursday, July 3) but closed Friday, Saturday and Sunday for a long holiday weekend.

Tonight, the action's downtown.

Concert, fireworks coming to New Albany riverfront Thursday; Beautification effort starts this week, too, by Daniel Suddeath (News and Tribune).

An unprecedented celebration and the desire to beautify the riverfront corridor has inspired the New Albany Urban Enterprise Association to team with a local landscaper. Beginning this week, Mike Pattison, owner of Equinox Gardens at 313 Mount Tabor Road, is hanging baskets and planting flowers through areas of the Urban Enterprise Zone — an area mainly covering downtown that is marked for economic enhancements.

Urban Enterprise Zone deductions and incentives listing and filing deadlines.

Reprinted in its entirety from UEA/UEZ releases and the NA Shadow Council blog.

Among the strongest tools for targeted reinvestment in the community are those wielded by the Urban Enterprise Association. The UEA administers the incentives attached to businesses within the Urban Enterprise Zone. All downtown businesses and many commercial properties along Spring, Market, and Vincennes streets are within the Zone.

It's important for you to know if you are in the Zone. Check out the Zone boundaries at http://nauea.blogspot.com to see if your business can directly benefit from its tax deductions and incentives.

If you have, within the past year (2007) purchased a building, land, or machinery, or had any renovation work at a property within the zone, you should apply for 2007 Zone Investment Deductions and Incentives.

The investment must be a "qualified investment," according to UEA Executive Director Mike Ladd. There is a specific list of qualifying expenditures related to an enterprise zone location where a taxpayer's business is located.

A “qualified investment” includes:

(1) The purchase of a building.

(2) The purchase of new manufacturing or production equipment.

(3) Costs associated with the repair, rehabilitation, or modernization of an existing building andrelated improvements.

(4) Onsite infrastructure improvements.

(5) The construction of a new building.

(6) Costs associated with retooling existing machinery.

When filing Indiana Schedule EZ

Parts 1A through 3 are due at the time the Indian State Tax Return is filed.

If, for some reason, the April 15 deadline is missed, file the EZB-E form, requesting a 30-day filing extension. That must be filed by May 15, 2008.

“The Investment Deduction really is the crown jewel the Zone has among the several economic development incentives available to Zone businesses and residents,” says Ladd.

According to Ladd, “The Enterprise Zone Investment Deduction Application (Form EZ-2) must be filed with the County Auditor between March 1st and May 10th of each year.” Once the form is filed, the County Auditor must notify the applicant of their determination by August 15th of the assessment year. Ladd tells us that “if the applicant is in disagreement of the Auditor’s determination, a complaint must be filed within forty-five (45 days) of the notification in the office of the clerk of the circuit or superior court.”

Ladd also notes that “If the form includes a deduction claim for personal property, a copy of the current assessment year Business Tangible Personal Property Assessment return (Form 102 or 103) must be attached.” This form and a personal property tax return are confidential pursuant to IC 6-1.1-35-9.

“This form is required to be filed each year a deduction is claimed even if no new equipment is acquired in that assessment year,” Mike reports.

Questions can be addressed to the Department of Local Government Finance at (317) 232-3777 or www.in.gov/dlgf/.

To find out if you are in the Enterprise Zone, go to nauea.blogspot.com and view the map, or call 812.944.3454.

The Enterprise Association board of directors is made up of Daniel Meyer, Brenda Scharlow, Ron McKulick, Larry Brumley, Robert Norwood, Roger Baylor, Carl Malysz, Steve Price, Al Goodman and Robert Norrington. The Executive Director is Michael C. Ladd.

Important filing deadlines follow:

IMPORTANT FILING DATES FOR

NEW ALBANY URBAN ENTERPRISE ZONE BUSINESSES

April 15 - Indiana Schedule EZ Parts 1A through 3 for Year 2007 are due with your State return. The Indiana Department of Revenue in cooperation with the IRS approves extensions.

May 9 - Deadline for filing Form EZ-2, accompanied by a copy of the current year Business Tangible Personal Property Assessment Return (Form 102 or 103). File in duplicate with the Floyd County Auditor for new personal and real property investments taxable as of March 1, 2008.

May 15 - Deadline to request an extension of up to 30 days to file Year 2008 Business Tangible Personal Property Assessment Return (Form 102 or 103) from the Township Assessor.

June 1 - Latest postmark date for the mailing of the completed calendar year 2007 EZB-R to the Indiana Economic Development Corporation.

June 1 - Latest postmark date to file the up to 45-day registration extension form, EZB-E, with the Indiana Economic Development Corporation.

June 13 - With a copy of the approved extension from the Township Assessor, Form 102 or 103 due to the Floyd County Auditor.

July 15 - With a copy of the approved extension letter, Form EZB-R is due to the Indiana Economic Development Corporation.