Momentum: B-N could benefit from state economic development policy changes
Bloomington-Normal is poised for prolonged healthy growth. But it will need help to make those dreams real, and changes at the state level could offer a boost to the community.
By several measures, the Twin Cities is booming: low employment, lots of disposable income, high-income households, and so on. During a recent Economic Development Council address, St. Louis-based housing consultant Justin Carney said that since 2013, the Twin Cities has accounted for 7-8% of the entire growth of the state.
He said the McLean County area has momentum many other cities do not.
“In the next 10-year population projections, McLean County is projected to have the highest population growth of any county outside of the Chicago metropolitan area, out of the entire state,” said Carney.
Nearby cities and metro areas in other states want to grow, too. Technological and cultural change toward renewable energy makes this a key moment in the nation.
“Billions of dollars of capital investment and thousands of jobs are being created as we pivot to a clean energy economy. Bloomington-Normal already has Rivian to be a tremendous partner in growth,” said Cass Peters, chief of staff for the state Department of Commerce and Economic Opportunity (DCEO).
The growth projections assume Bloomington-Normal will capitalize on businesses connected to electric vehicle maker Rivian. It's not a given. Peters said the community does have advantages in transportation, distribution, and logistics because of its central location and high-quality infrastructure. Electric vehicle component manufacturing is an obvious strength.
Peters said the community is well positioned to compete for development in green energy generation, solar panel manufacturing, and energy storage.
“These are essentially the large batteries which will help establish mini-grids and nicely combine with existing utilities to provide renewable energy locations and sectors,” said Peters.
There are 15,000 jobs in the pipeline, Peters said, and Illinois is competing for $17 billion in potential investment in those sectors. The state has tried to make Illinois attractive enough to leverage growth with laws like the Clean Energy Jobs Act that provides workforce training and development incentives. Late last year, lawmakers approved tweaks during the veto session and early this year in the lame duck session of the General Assembly.
Alyson Grady, deputy director of regional economic development at DCEO, said those changes offer clarity in state tax incentives that will be helpful to cities and towns, too. And a revision of the Reimagining Electric Vehicles Act will help the Twin Cities attract Rivian-related suppliers and same-sector businesses.
“Initially, the program had a very tight definition of what a component manufacturer is. We made changes to broaden that scope. We're making sure we are actually capturing what needs to go in so we can advance that electric vehicle market here in Illinois,” said Grady.
According to the law, incentive packages for electric vehicle businesses lasted 10-15 years, but Grady said the maximum is now 20-30 years. And Peters said the law lets local communities abate their property taxes to lure new or expanding business for the same amount of time, though local action is optional.
“We have conversations about the kind of economic impact this massive project would have for an area. I think that helps locals have some of those conversations about what they're comfortable with,” said Peters.
One of the standard state economic development tools is the Economic Development for a Growing Economy program, also known as EDGE tax credits. Grady said those didn't always work well with electric vehicle incentive programs. Changes signed into law in December allow for transitioning back and forth between the programs depending on company needs, she said. Changes to the tax credits themselves make the analysis and data that companies must submit to qualify more like rules in other states, and less burdensome to generate.
The state also increased tax credits for job retention.
“This is just as important for us to keep the businesses that we have here that are looking to expand instead of making them go look somewhere else,” said Grady.
There are so many changes to economic development rules, Grady sounds a little like a famed infomercial pitch person — Ron Popeil.
“But we're not done there,” said Grady.
Another change could make it easier to attract projects that have high numbers of jobs.
“This is probably going to help the Bloomington Normal area. We increased the sizes of enterprise zones that can be out there,” said Grady.
And projects that would not be in a current enterprise zone could get state benefits similar to an enterprise zone.
The Reimagining Energy and Vehicles Act had a threshold of $20 million in business investment to qualify for incentives. Now, requirements are the same as for EDGE tax credits: $2.5 million in investment, 50 new jobs, and 10% of the total business must be in Illinois. The EDGE credits now include the renewable energy sector. And a recent update to the Manufacturing Illinois Chips for a Real Economy Act (MICRO) matches the renewable energy and electric vehicle manufacturing incentives for computer chip makers.
The state also is rolling out a new program to lower barriers for communities to get ready for opportunities as they come.
Illinois is now offering grants to help develop “mega sites” for industry, commerce and manufacturers. A mega site refers to 200 acres or more that’s been prepped for development, but has so far been underused. Gov. JB Pritzker said businesses look for “turnkey” sites, and a new $40 million state fund will make it easier to develop them.
“Major job creators are consistently looking for investment-ready sites that they can get up and running in a short amount of time,” said Pritzker.
Applicants such as cities, towns, and counties can use the grants to improve roads, water mains, broadband access, other infrastructure, and environmental remediation. They’re eligible for up to $5 million. There is a local match required. The money comes from the state’s Rebuild Illinois capital program. For instance, this could help Bloomington-Normal develop an industrial park.
And Alysson Grady said the Invest in Illinois Act, also called the Closing Fund, provides businesses some of the up-front capital they say they need as they make very large investments.
In the 2 1/2 months since some of the expanded benefits and reduced red tape measures passed, Grady said Illinois is getting more of a look from potential projects.