Aug 20, 2011

Incentives for Economic Development

We had an interesting discussion about incentives with C.J. Summers and the Citizens of Peoria. You can read the comments on the link below:

My favorite blog in Peoria is the Peoria Chronicle, written by C.J. Summers.

Peoria Chronicle

C.J. does a great job on city of Peoria issues.

I love his blog, but respectfully disagree with his opposition to the Heart of Peoria redevelopment efforts. If an older city does not lead the redevelopment of its older central city, it will continue to decline.

Take a look at beautiful downtown Harvey and Gary. I know those cities well. Most of their efforts to rebuild their central city were too little, too late. A visit to their down towns might convince a skeptic that a city must rebuild itself, or give up and move out.

We would all prefer that we did not have to incent the redevelopment of our older cities, but that is not reality.

People are angry about taxes and incentives to the private sector. I understand that anger. But these folks should also understand that a decision not to incent redevelopment is a decision to give up on your older areas.

Downtown Peoria has some outstanding advantages that Harvey and Gary did not share. Our City overlooks the Illinois River, providing a great view.  Our downtown is fortunate to have two great hospitals and a corporate headquarters of Caterpillar, a very successful company that cares about its home town. And the interstate runs through downtown, providing great access.

Still, incentives are required to rebuild the older parts of the city. Developers go where they are certain they can develop and get a great return. Redevelopment is much more costly and high risk then greenfield development. We have to equalize these costs through incentives if we want private sector renewal.