Economic Development Blog

CBRE’s state incentives ranking is a solid tool for developers to use to consider state-level economic development incentive programs.  I took a look at the request of Renata Pasmanik, Director of Programs at The Alter Group and a member or our CoreNet Chicago Chapter Board of Directors.  She asked me to comment about CBRE’s recent “EIG State Incentives Ranking” Report.” (The report link is http://cbremarketing.com/ve/ZZc609931t81aL915887T)

As an Certified Economic Developer who has been practicing in Illinois for nearly 30 years, Renata thought I could add some insights. Well, I can and will!

First, click on the link and take a look at the map and state rankings list that’s generated. Illinois, Indiana and Iowa are marked “competitive.” What’s interesting is that CBRE ranks Wisonsin as “noncompetitive.” I find that interesting because many of the border commercial parks near Illinois (e.g., Kenosha) have almost always been able to out-incentive northern Illinois. And my broker colleagues at CBRE, when trying to close a transaction, are quick to point out Wisonsin’s advantages.

Next, look at the “Aggressive” dark green states, which now include Michigan. Most are in the south, but Ohio and the Central Plains states have also moved into the aggressive category. These state economic development programs are traditionally market-focused and easy to do business with. The older rust belt states, with high unemployment, had little choice but to increase their competitiveness in order to just retain jobs.

There’s my opinion. Happy Holidays!

Mr. Chris Manheim

As municipalities scramble to find ways of financing the development or redevelopment of retail and commercial corridors, the State of Illinois designed the Business District Development and Redevelopment Sales Tax back in 2005. (Legal citation is 65 ILCS 5/22-74.3-5). The municipality may impose this tax if it has plans to develop or redevelop an area that may directly benefit from the proposed plan. Examples may be shopping corridors that have been abandoned by major retailers, an older industrial park or a blighted area. The BDD, as it is known, is easier to implement than a Tax Increment Finance District and still generates a substantial amount of revenue. An added advantage: a BDD does not require voter approval. The BDD tax rate may be imposed in 0.25% increments and cannot exceed 1%.

For the commercial developer, a BDD can be an attractive incentive, particularly for redevelopment financing. The major disadvantage is that the sales tax is higher within the district than surrounding areas.

To find out more about BDDs, here are some links to the Illinois Department of Revenue and other websites:

http://www.revenue.state.il.us/LocalGovernment/Overview/HowDisbursed/1002-20.pdf
Statutes: www.ilga.gov/legislation/ilcs
Public Acts: www.ilga.gov/legislation/publicacts
Illinois Department of Commerce and Economic Opportunity (DCEO):
www.illinoisbiz.biz

Chris Manheim