After an uncomfortable question and non-answer session at the last Daviess County Commissioners meeting, the Daviess County Economic Development Corp. has requested a spot on the agenda for the next commissioners meeting.
The EDC is looking for answers and direction which may determine its future.
“We have been negotiating on a contract for a long time,” said President of the Daviess County EDC Ron Arnold. “After several rounds, the commissioners approved a contract that we had not seen and could not approve.”
The contract has been a long running dispute between the commissioners and EDC.
“When I came on the commissioners, we had two contracts with basically the same organization, to do the exact same thing,” said President of the Daviess County Commissioners Nathan Gabhart. “There was no suggestion that any kind of crime was committed, but I didn’t like it. The State Board of Accounts didn’t like it either.”
That led to a different potential contract proposal that began last spring tied to plans between the county and the EDC to work on developing infrastructure on Washington’s east side.
“The (county) council voted to use EDIT (Economic Development Income Tax) funds to pay for infrastructure improvements around the I-69, U.S. 50 interchange,” said Arnold. “But the commissioners don’t seem to think they should support that.”
“That is a case of the process not being followed,” said Gabhart. “When it comes to economic development, the commissioners decide which projects will be done. It is then up to the council to decide whether to support it financially. The commissioners never agreed to that action.”
The apparent split between the commissioners and EDC appears to getting in the way of some pending projects.
“We have a $10 million hotel project for a Hampton Inn,” said Arnold. “The developer has $9 million committed. We needed a commitment of $1 million in EDIT from the county to act as security. Commissioner (Nathan) Gabhart said he was not interested in helping that.”
“It’s true; I wouldn’t support it,” said Gabhart. “But there is more to it than that. The developers for the Hampton at first were working with the private developers on the southside of U.S. 50, but Mr. Arnold talked them into going to the north side of the road. It became a case of a public organization competing with the private one. I feel businesses need to risk their own money. I am working on a $1.3 million addition to my business, should I get $1 million? Besides this is in the city, and it is in a TIF district. I don’t think this qualifies as economic development.”
The second project is in the northern part of the county at WestGate.
“We have a developer interested in our tech park property, but he wanted assurances that they could develop it as a TIF district,” said Arnold. “The commissioners appear to be backing away from using more TIF. We’re bringing them projects, but we’re not having success because of a lack of support.”
“The WestGate TIF barely covers the bond payment,” said Gabhart.
“We have paid $1 million in interest,” said Gabhart. “We’re paying $186,000 in bond payments now, but that will increase to $727,000 in 2021. None of the revenue from the TIF is going to pay off the bond. WestGate is in serious shape and we don’t know what we are going to do with it.”
During recent weeks Gabhart and Commissioner Tom McCracken have both made statements backing away from EDC tax dollar support. In his re-election announcement, Gabhart said he wanted to put an end to the EDC putting up buildings, and McCracken has said he did not want to see the county spend its money on EDC projects.
“Based on the mindset they have, if they had been in office earlier, there would be no GPC, no Caterpillar, no tech park,” said Arnold. “Their approach eliminates any chance we have for long-term planning. This is the worst time for the commissioners to do this. I think the council is pleased with what we have done. That EDIT was put in place to develop projects and bring in jobs. We have done that.”
Indicators of growth questioned
“It’s frustrating,” said Gabhart. “No one verifies what they say. They point to the growth in assessed value, but almost 100 percent of the growth has been a result of agriculture.”
The EDC claims the commissioners want numbers to fit their own story. “I think we match up very well on key indicators for growing the businesses, expanding the tax base and adding employees and payroll taxes. The problem is that it doesn’t fit the commissioners’ narrative that the things we are doing make a difference,” Arnold said.
Arnold says the differences between the county’s administrative body and the EDC is having a continued impact.
“Twenty years ago things were pretty bleak here,” he said.
“Businesses were leaving and agriculture was down. Since then we have built some momentum with a public-private effort to develop and grow the county. I could stand before potential clients and tell them the people in our community, our elected officials get it and will support a project. This is the first time in 15 years I have not been able to say that because it looks like we have two commissioners who don’t want to work with us.”
“I recognize the optics of the split,” said Gabhart. “But it seems like they take advantage of that. The commissioners cannot let the EDC hold us hostage to the idea that not going along with them will somehow stop development. As a business owner looking at this county, I think you would want to make sure the tax dollars are being spent right.”
The EDC contends the impact is being felt outside of the organization.
“This has sucked a lot of energy out of our project efforts,” said Arnold. “We had people who were engaged and active and would do whatever we asked to make a project work and they have begun to back away. I know what’s been accomplished in Daviess County and what the potential is. I don’t want to miss winning the big project because our elected officials gave up in the fourth quarter.”
“In the end, as a commissioner, all I can do is the right thing and eventually we’ll let the voters decide.” said Gabhart. “If the truth hurts, so be it.”