Building Indiana: March/April 2014 by Building Indiana News

MARCH / APRIL 2014

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2014 FINANCIAL OUTLOOK

Inside This Issue A Look Back: BP Whiting Refinery | pg. 34 Crisis Management Scenario | pg. 46 Take a Gamble, Support Your State | pg. 64

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Spotlight on Hoosier Finance

CORPORATE HEADQUARTERS 1330 Arrowhead Court Crown Point, IN 46307

Tax season is just about to wrap up across the state of Indiana. Did you know that Indiana ranks tenth on The Tax Foundation’s 2014 State Business Tax

Publisher/Editor Andrea M. Pearman apearman@buildingindiana.com

Climate Index? That means that Indiana ranked higher than 80% of other states when it comes to five areas of taxation that impact business: corporate taxes,

Director of Advertising Diane Towle dtowle@buildingindiana.com

individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property (residential and commercial).

Writer Nick Dmitrovich ndmitrovich@buildingindiana.com

At Building Indiana News, we’re extremely proud of our state, and all that it

Art Director Jen Labriola jlabriola@buildingindiana.com

does to promote business. As such, this year we’ve decided to do something a little different with our March-April issue; we’re taking a close look at financial topics from all around the state. Our reasoning is simple: out of all of the data

Graphic Designer Carlo Labriola clabriola@buildingindiana.com

that Hoosier businesses take into consideration every day, there’s one singular number that stands out above all as the most important: the bottom line.

Accounting Craig Marshall cmarshall@buildingindiana.com

So, in our newly directed March-April issue, we’re honing in on all of the elements that affect and impact a company’s bottom line. From governmental issues such as taxes and legislation, to closer-to-home topics such as staffing

Indianapolis Office Business Development Manager Lee Ann Richardson 888.226.0330

and marketing strategies, we’ve compiled an outstanding wealth of financial information from all over Indiana.

Warsaw Office Business Development Manager Julie Monteith 888.226.0330

Our hope is that this information proves useful for your business as you move forward this spring, and sheds some light on innovative financial news that your company may not have been aware existed. As always, our mission is to bring you the very best in Indiana business and economic development news so your company can

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Copyright ©2014 Building Indiana News is published six times a year. Address correspondence to: 1330 Arrowhead Court, Crown Point, IN 46307. Publisher reserves the right to accept or reject any editorial or advertising matter. Publisher assumes no responsibility for return of unsolicited manuscripts or art. No part of this publication may be reprinted or otherwise duplicated without the written permission of the publisher. For general reprint information, contact Building Indiana News at apearman@buildingindiana.com. All opinions and views are solely those of the participants or editors and are not necessarily the views of magazine sponsors.

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Contents MARCH

APRIL

2014

EVERY ISSUE

04 Publisher’s Desk 08 Contributors 09 Business Buzz 26 People News E X P E RT A DV I C E

32 36 38

D E PA R T M E N T S

CONSTRUCTION Feat. 1

State Fair Coliseum

Construction Feat. 2

Saving Without Losing

The bottom line Tax Foundation Awards

Indiana’s Roads Worker’s Comp Defense Against Workers

Lifelong learning Lilly Endowment Grant Fund Green & Sustainable ArchelorMittal Energy Saving Marketing Jump Start Your Social Media Economic Development

Small Business Spotlight Where are they now? Mass Production Indiana Leads

Facts & Stats Financial Statistics

Logistics

Compensation Claims

A Look Back

YOUR WELL-BEING

Safety Zone Injury Costs

Areva Pharmaceuticals

RULE OF LAW Local Control is Key

27 PHOTO FEATURE 34 cover story

Crisis Management

State of the Industry Planning Ahead

F E AT U R E S

BEING PRODUCTIVE

Hoosier Lottery

66 the last word

Real Estate Rebound

64 www.buildingindiana.com | MARCH / APRIL 2014

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Contributors Frank Keres

Frank Keres is President and CEO of Construction Risk Associates, Inc., an accident investigation firm. As a nationally recognized presenter, Keres has presented to the National Safety Council, International Conference on Construction Safety, and various ACG chapters. Keres attended the University of Notre Dame and John Marshall Law School. Justin T. Nestor Justin T. Nestor is a Partner at Bryce Downey & Lenkov LLC, and focuses his practice on workers’ compensation and general liability defense. Mr. Nestor is based out of the firm’s office in Crown Point, Indiana, and is licensed in Indiana and Illinois. Dewey Pearman Dewey Pearman serves as Executive Director for the Construction Advancement Foundation. He has a Master’s in Economics from Indiana State University. The foundation promotes the union construction industry of northwest Indiana by helping to enhance its efficiency and

competitiveness via labor relations and government management, education, training, safety and workforce development. Thomas W. Peterson Mr. Peterson has served as Bond Counsel to Indiana school corporations, libraries, cities, towns, townships and counties for 28 years. After being a partner in a large Indianapolis law firm, Mr. Peterson opened TWPeterson Law Office in 2010. He has spoken at numerous seminars on the topic of construction finance. Mitchell Surovik Mitchell Surovik was born and raised in Central Texas. He served in the U.S. Army Airborne Infantry before moving into the Military Intelligence field. Mitchell has worked in a variety of construction and general industry fields from petro-chemical to power and primary metals. He has a degree in Occupational Health and Safety. He was granted to the title of Certified Safety Professional from the Board of Certified Safety Professionals. Mitchell is one of the owners of 633 Safety Services where he serves as the Consulting Manager.

Tim Rushenberg Tim Rushenberg is the Vice President of Governmental Affairs and Tax Policy for the Indiana Manufacturers Association. Prior to the IMA, Tim was president of a real estate and technology company, served Governor Daniels as an agency commissioner and general counsel, and was an active duty Air Force Judge Advocate. Brian D. Specht Brian D. Specht is the Vice President and Credit Manager for American Savings, FSB. He has over 20 years’ experience as a commercial lender. A graduate of St. Joseph’s College, he has worked at both community banks and larger regional banks in Indiana and Illinois. Kaitlin Williams Kaitlin Williams is the Marketing Coordinator and resident social media expert at Diversified Marketing Strategies. She holds degrees in English with a concentration in Creative Writing and Spanish from Indiana University Bloomington.

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MAIN BUZZ

Influential Women Awards to Honor NWI’s Leading Ladies By Nick Dmitrovich

Design, Service/Tourism, Education, Manufacturing, Law, Economic Development, Media/Marketing, and Nonprofit. The choorthwest Indiana’s premier female business and civic ex- sen nominees are evaluated on several criteria such as their acecutives will be honored at the fourth annual Influential complishments, their leadership skills, experience, integrity, and Women of Northwest Indiana awards ceremony and re- their impact on each respective industry. “This year we also have an excellent Steering Committee, ception on May 8th. The event is hosted by Northwest Indiana made up of Influential Women alumni, helping us select the winBusiness Events at the Avalon Manor in Merrillville, from 5 to 8 ners,” said Kaitlin Williams, Event Coordinator with Diversified PM, and will include a networking reception with cocktails and Marketing. hors d’oeuvres, dinner, dessert and the awards presentation. “We’re really excited this year,” she This year, more than 500 business leadadded, “Because our nominees are some ers are expected to convene for the annual “Our female businesses leaders in of the most dedicated professionals banquet to recognize over 100 nominees, in their industries, and this night is all and honor the 24 award winners. Proceeds Northwest Indiana are so prominent and about celebrating their achievements.” raised from the event will go to four prestrong, we wanted to design this awards In each of the 11 categories, 2 awards selected charities located in the Northwest ceremony to honor all of their hard work, will be given out. The “Influential Woman Indiana area whose projects benefit women dedication and accomplishments.” of the Year Award” recognizes women and children. - Andrea Pearman, Event Coordinator that are impacting their field presently “Our female businesses leaders in and have ten or more years of experiNorthwest Indiana are so prominent and ence, while the “Up and Coming Woman strong, we wanted to design this awards cerof the Year Award” honors those who are emony to honor all of their hard work, dedication and accomplishments,” said Andrea M. Pearman, presi- on the forefront of business leadership practices in Northwest dent of Diversified Marketing Strategies and Executive Director of Indiana with less than ten years of experience. Beyond the 11 catthe Northwest Indiana Business Roundtable. “Last year’s awards egories, there is an additional special award –the “Empowering night was a huge success, and I am very excited to honor this Business of the Year Award” recognizes a business that supports the success of women. year’s award recipients.” Tickets and sponsorships are available through the website Winners are selected by a review committee of representatives from the 11 different industries that were highlighted, in- at www.nwiwomen.com or by contacting Kaitlin Williams at 219cluding: Healthcare, Finance, Government, Construction/Interior 226-0300 or kwilliams@nwibusinessevents.com.

MARCH / APRIL 2014 | www.buildingindiana.com

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Northwest Purdue Economist Predicts Strong Year for Pork The U.S. pork industry has started a slow expansion driven by lower feed costs, which should lead to more rapid growth of pork supplies in the latter half of this year, says Purdue Extension agricultural economist Chris Hurt. That could result in 2014 turning into the best year for pork producers in nearly a decade. If corn and soybean meal prices stay low as expected, hog weights and pork production should continue to increase into 2015, Hurt said. That continuing growth will be met with strong demand both based on limited competition domestically and strong export demand. Total meat supplies of beef, pork, chicken and turkey combined are likely to remain unchanged this year. While chicken production is expected to grow by about 3 percent and turkey by about 2 percent, Hurt said beef supplies will fall by as much as 6 percent on the tails of a small calf crop and higher heifer-retention rates. Last year, live-hog prices averaged $65 per hundredweight. Hurt said they are expected to average about $66 this year, with the highest prices ranging from $69 to $71 in the second and third quarters. Increased production during the summer and fall will then drive prices back down to below the 2013 levels. Low production costs will, however, help maintain strong profit margins for pork producers. Part of what continues to drive low production costs is low feed prices. Corn averaged an estimated $6 per bushel in 2013. That price could fall to an estimated $4.45 per-bushel average for the 2014 calendar year. Soybean meal averaged about $440 per ton last year and likely will drop to an average of $395 per ton in 2014. According to Hurt, profits could reach about $27 per head, making this year the most profitable for pork producers since 2005. As supplies increase, he said those margins will tighten, but not disappear.

Notre Dame and Under Armour Sign Ten-Year Deal The University of Notre Dame and Under Armour announced their new partnership at a press conference on the school’s Indiana campus. Under Armour Founder and CEO Kevin Plank joined University Vice President and Director of Athletics Jack Swarbrick to formally introduce the alliance of one of the country’s most distinguished collegiate athletic programs and the global leader in performance footwear and apparel. As part of the 10-year agreement, Under Armour will exclusively design and supply the footwear, apparel and equipment for training and game-day uniforms for each of the university’s men’s and women’s varsity athletics teams. In addition to outfitting Fighting Irish athletic teams, the brand plans to integrate the university into its wide-ranging story-telling efforts, including global marketing campaigns, social media initia www.buildingindiana.com | MARCH / APRIL 2014

NWI Schools to Benefit from STEM Initiative Indianapolis-based College Acceleration Network has created the STEM Innovations initiative as a result of a $450,000 federal Mathematics and Science Partnership grant administered by the Indiana Department of Education to enhance science, technology, engineering and mathematics (STEM) education over the next three years. Seven Northwest Indiana school corporations will share the grant which partners school systems with higher education institutions

to assist teachers in strengthening their STEM skills to help impact student academic performance. The initiative is partnering with Purdue University North Central, which will develop key tools and implement training for teachers and administrators. More than 200 teachers in the seven school corporations in grades seven through nine will participate in summer institutes and key sessions throughout the school year to learn a number of skills including how to create more effective lessons that will enhance current Indiana Common Core standards and Indiana academic requirements. The school corporations participating in the initiative are: Crown Point Community School Corporation (Crown Point, Ind.), Gary Community School Corporation (Gary, Ind.), Merrillville School Corporation (Merrillville, Ind.), M.S.D. of Boone Township (Hebron, Ind.), School City of Hammond (Hammond, Ind.), School City of Hobart (Hobart, Ind.) and the School Town of Munster (Munster, Ind.). The school corporations are part of the ReadyNWI initiative. The grant will also help the school corporations continue to build on the work they are already doing as part of a Math Innovations grant that provides professional development and leadership coaching in algebra and assessment data to teachers. The Math Innovations grant increases knowledge of the Common Core State Standards, focusing on the importance of math as an indicator of post-secondary success.

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tives, in-store promotions and grassroots activations. This new affiliation further expands Under Armour’s leadership in providing proven performance benefits to college athletes on all playing fields. Notre Dame is the brand’s thirteenth Division 1 all-school partnership. The Fighting Irish football team is one of the most decorated programs in all of sports. Playing as an Independent, the unit has captured 11 consensus national championships and has produced seven Heisman Trophy winners. Other Fighting Irish teams have combined to win 19 national championships, most recently, the 2013 NCAA Men’s Soccer Championship. Most of the school’s varsity teams now compete in the Atlantic Coast Conference.

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BUSINESS BUZZ

Michigan City Plans Community Development Economic Development Corporation Michigan City, Indiana (EDCMC) secured a professional community and economic development services contract from the City of Michigan City. The contract was awarded by the city earlier this month and provides $100,000 to EDCMC in 2014 through the County Economic Development Income Tax fund. The fund provides for a variety of business development opportunities, including: • Industrial and commercial recruiting, retention and plant expansions • Retain jobs currently located in Michigan City • Provide expansion opportunities to local industry to result in more city jobs • Recruit new industry to locate in Michigan City, resulting in an expanded

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Norte Dame Announces $400M Project The University of Notre Dame announced the largest building project in its 172-year history, integrating the academy, student life and athletics with the construction of more than 750,000 square feet in three new buildings attached to the west, east and south sides of the University’s iconic football stadium, at a projected cost of $400 million. The Campus Crossroads Project will add significant academic space at the same time the University is hiring 80 new faculty to build on Notre Dame’s existing strengths. Construction will begin in two years or sooner and take approximately 33 months to complete. The plan features three new structures attached to and serving the stadium – a west building for student life services, including space for student organizations, a recreation center and career center; an east building for the anthropology and psychology departments and a digital media center; and a south building for the Department of Music and the Sacred Music at Notre Dame program. The east and west buildings also will include some 3,000 to 4,000 premium seats for the football stadium with supporting club amenities. Central components to the plan include the addition of meeting, research and teaching venues, as well as facilities that do not currently exist on campus, such as a 500-person ballroom. The various new spaces also will be designed to accommodate multiple functions for multiple departments, such as the stadium club spaces, which also will be used for student services, academic event space, classrooms, conferences, career fairs and other campus and community activities. Further details of the project are available at crossroads.nd.edu.

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Alcoa Howmet Plans 300 New Jobs in LaPorte

RDA Makes Major Commitment to Rail Expansion The first phase of the long-discussed West Lake Corridor rail expansion project took a significant step forward at today’s meeting of the Board of Directors of the Northwest Indiana Regional Development Authority. The Board committed $8 million a year in RDA funds to match local funds generated for construction of the line. The Town of Munster recently voted to dedicate 34 percent of its share of the County Economic Development Income Tax (CEDIT) to fund rail expansion, as an example of the leadership needed. In addition to dedicating a decade’s worth of matching funds, the RDA Board approved a $1.1 million grant to the Northwest Indiana Commuter Transportation District (NICTD) for an environmental impact study that must be completed prior to construction of the West Lake Corridor. NICTD will provide $1.9 million of its own funds for the study. The RDA is also looking ahead to the costs of operating trains on the West Lake Corridor. Among the requirements for federal funding is that a project have a source of operational funding. Under Senate Bill 367 the RDA would receive an additional $4 million annually from casino revenues. If approved, this money will be placed in escrow to establish an operating MARCH / APRIL 2014 | www.buildingindiana.com

BUSINESS BUZZ

Alcoa Howmet, a leading producer of integral compressor and turbine investment castings for the aerospace and industrial gas turbine industries, has announced plans to invest more than $100 million into its manufacturing plant and create more than 300 additional jobs. The company was granted a 10-year tax abatement by the city council on $27 million of improvements to its 200,000-square-foot building at 1110 E. Lincolnway on the city’s east side along with $83 million in new manufacturing equipment. Greater LaPorte Economic Development Corp. executive director Bert Cook said the 312 new jobs projected will generate $23 million in annual salaries. The company presently has a workforce of more than 300.

fund for the West Lake Corridor. The West Lake Corridor is forecast to carry approximately 5,600 riders when operational. This represents a 40 percent increase in ridership over the commuters currently taking the South Shore train into Chicago. The annual commuter income generated by the West Lake Corridor is $147.3 million, a 62 percent increase over the $237.5 million that the South Shore line commuters now bring back to Northwest Indiana. This additional $147.3 million would generate an approximately $12 million annually in new income taxes for the state. Under the current proposed timetable, if funding can be secured, design and engineering work would begin in 2018 and actual construction would start in 2020. Trains would be running on the West Lake Corridor in 2022.

Carl Buddig Moves Distribution Center to Indiana Carl Buddig & Company, a producer of sliced and packaged lunchmeat, announced plans to relocate its distribution center from South Holland, Ill. to Munster, Ind., creating up to 55 new jobs by 2016. The Homewood, Ill.-based company will invest $3.7 million to lease and refurbish the 65,000 square-foot former Dawn Foods facility at 215 45th Ave. in Munster. The facility, which is expected to begin operations in March, will enable the company to increase its available warehouse and dock space, growing capacity for added production lines across

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the company. Buddig currently employs more than 1,000 associates nationally with its subsidiary Old Wisconsin Sausage. The Indiana Economic Development Corporation offered Carl Buddig and Company up to $300,000 in conditional tax credits based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. The city of Munster approved additional incentives. For daily news from Nortwest Indiana and around the state, visit our blog at www.buildingindianablog.com and follow us on Twitter @BuildingIndiana. .

Northeast GW Micro Signs Deal with Microsoft GW Micro Inc., of Fort Wayne, and Microsoft Corp. have partnered to make Window-Eyes available to users of Microsoft Office at no cost. Window-Eyes is a screen reader that enables people who are blind, visually impaired, or print disabled to have full access to Windows PCs and makes the computer accessible via speech and/or Braille. To better deliver Window-Eyes to the people who need it most, GW Micro and Microsoft have collaborated on this global initiative, available in over 15 languages, to enable anyone using Microsoft Office 2010 or later to also use Window-Eyes for

free. Access to technology is critical to people who are blind or visually impaired in order to have the same opportunity to compete in the workplace. As such, this initiative between GW Micro and Microsoft has the potential to reduce barriers for millions of people who are blind or visually impaired around the world. In light of the rapidly changing face of technology and specifically, the changing face of assistive technology, the combined efforts of GW Micro and Microsoft have the goal of providing accessibility to people who are blind and visually impaired for the long term. Eligible customers, using Microsoft Office 2010 or higher, will be able to download a full version of Window-Eyes starting immediately.

Wells County Commissioners Approve 200,000 SF Spec Building In a unanimous decision today, the Wells County Commissioners voted to financially support the construction of a 200,000 square foot spec/shell building to be constructed in Bluffton, IN. The proposed plan, contingent upon entering an agreement with a Wells County developer, will construct the speculative building in the Bluffton-Decker Industrial Park located on the city’s west side. Construction on the steel structure is expected to start in the 2014 spring and completed within 6-9 months. When approving the incentive of an annual CEDIT allotment of up to $150,000 for no more than five years and discontinuing when the facility is either sold or leased. Bluffton Mayor Ted Ellis, present at the meeting to support the decision, also pledged the City of Bluffton’s participation by implementing road improvements along Lancaster Street. Also present and encouraging the move was John Sampson, President of the Northeast Indiana Regional Partnership. A spec, or speculative building, is constructed as a lure for industries looking to grow or relocate their operations. Typically in today’s economic climate, industries delay decisions for expansion. Once the decision to expand is made, communities

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that offer a move-in ready building are given a higher ranking in the search process.

and construction is being conducted by Weigand Construction, both local Fort Wayne firms.

High School Equivalency Completion Rising in Northeast Indiana

Glass Recycling Company Moving to Blackford County

Northeast Indiana Works and its adult education partners of Fort Wayne are on pace to see a near-doubling of people earning high school equivalencies in fiscal 2013-2014. Overall, adult education providers affiliated with Northeast Indiana Works are poised to serve more people in 2013-2014 than the previous year. In the first six months of 2013-2014 (July-December), 576 people earned high school equivalencies. That compares to 653 for all of 2012-2013. Moreover, 1,877 people received adult education services such as high school equivalency test preparation and English as a second language instruction in the first six months of 2013-2014. That compares to 2,699 for all of 2012-2013. Earning high school equivalency is a first step toward individual prosperity and is a critical component of the region’s Big Goal of ensuring 60 percent of adults in northeast Indiana have achieved quality post-secondary credentials or degrees by 2025. Presently, fewer than 35 percent of northeast Indiana adults have achieved that level of education. Adult education providers affiliated with Northeast Indiana Works include Anthis Career Center in Fort Wayne; Huntington County Community School Corp.; Impact Institute in Kendallville; Learn More Center in Wabash; The Literacy Alliance in Fort Wayne; Marion Community Schools; and WorkOne Northeast.

Reflective Industries announced the opening of its third location in Blackford County, Indiana. The glass recycling company plans to invest $4 million and add 20 jobs in Hartford City over the next three years. The Reflective Group of Companies has thirteen facilities across North America. The company recycles post-consumer and post-industrial glass using a process of cleaning, sorting, crushing, and sizing to meet the customer’s fitness for use criteria. The end product, cullet, is sold to customers in a variety of industries including fiberglass, container, and bead manufacturing. Reflective Industries purchased an existing building in the Blackford Industrial Park. The company is in the process of concurrently installing its first two production lines, and will continue to add equipment and make building improvements over the coming years. The other two facilities in Indiana, Dunkirk and Shelbyville, will continue operating as important parts of Reflective Industries’ operation.

Pyromation Expanding in Fort Wayne Fort Wayne-based Pyromation, Inc. began operations related to the company’s office renovation and expansion project this month. The project is expected to be completed by September of this year. The office renovation and expansion project follows the company’s plant expansion and renovation, which was completed in 2012. The $1.25 million project updates the company’s administrative offices, which were last remodeled in 1986. Since that time, Pyromation’s sales have grown from $5 million to $30 million in 2013. The offices are being completely redone with demolition, revisions, reconstruction and a modern décor applied as part of the process. The renovation incorporates a larger, visitorfriendly lobby, as well as, contemporary conference rooms and office space. The project also includes updates to plumbing, electrical, HVAC and network wiring. When completed, the renovation will have created new space for an additional five to 10 administrative employees, who are expected to be hired in the next year. The anticipated positions range from Sales Engineer to Quality Technician. The new office layout and design was developed with the assistance of One Eleven Design 16

Foreign-Trade Zone Expands Four northeast Indiana counties are now part of the area’s Foreign-Trade Zone, providing businesses located in those counties with tools to help them compete globally. The U.S. Department of Commerce approved the City of Fort Wayne’s application for expansion of Foreign-Trade Zone 182 to Blackford, Jay, LaGrange and Steuben counties. Until now, the zone had a service area that covered eight counties (Adams, Allen, DeKalb, Huntington, Noble, Wabash, Wells and Whitley). A U.S. Foreign-Trade Zone is a site within the United States that is legally considered outside of Customs territory for the purpose of duties, so goods may be brought into the site dutyfree and without formal customs entry. Foreign-Trade Zones provide users with the opportunity to lower costs and boost profits by allowing them to reduce, eliminate or defer the Customs duties they would have otherwise paid. The City of Fort Wayne is the Grantee for FTZ-182 and the program is managed by Elissa McGauley, Economic Development Specialist. The City of Fort Wayne, along with Greater Fort Wayne Inc. works closely with Fort Wayne International Airport and economic development organizations in the service area to promote the Foreign-Trade Zone throughout the region. Recently, the local trade zone was branded as BizFTZ. The website www.bizFTZ.com provides complete information about Foreign-Trade Zones and links businesses to resources that can help a company understand, evaluate and start the process to operate in the zone.

www.buildingindiana.com | MARCH / APRIL 2014

I&M Announces $500M Investment

Minnesota Company Coming to Bristol Satellite Industries, Inc., a global supplier of portable sanitation equipment, announced plans today to locate operations in Bristol, IN, creating up to 70 new jobs by 2017. The company, which has U.S. headquarters in Minnesota and European headquarters in Belgium, will invest $6.9 million over a number of years to establish distribution and manufacturing operations in Indiana. Expanding its operations in two phases, the first phase will consist of leasing and equipping a 13,000 square-foot facility in Elkhart. For the second phase of expansion, Satellite will construct and equip a 106,000 square-foot manufacturing facility on a 22-acre campus in Bristol and, upon its completion this August, will move all central distribution operations to this location. Satellite will begin hiring warehouse management, assembly, warehouse and office administration positions this spring. Founded in 1958, Satellite supplies products to the portable sanitation industry, with products including restrooms, trucks, deodorizers and restroom trailers. The company serves customers in more than 125 countries, including Belgium, France, Spain, United Kingdom, Hong Kong and Japan. The Indiana Economic Development Corporation offered Satellite Industries, Inc. up to $675,000 in conditional tax credits based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. The town of Bristol approved additional tax abatement at the request of the Economic Development Corporation of Elkhart County.

Sporting Goods Retailer Bringing Jobs to Marion Dunham’s Athleisure Corporation d/b/a Dunham’s Sports, a retailer of sporting goods, announced plans to expand its distribution MARCH / APRIL 2014 | www.buildingindiana.com

BUSINESS BUZZ

Indiana Michigan Power (I&M), an operating unit of American Electric Power (NYSE: AEP), plans to invest $500 million to upgrade northeast Indiana’s electricity transmission infrastructure. Powering Up Northeast Indiana includes projects that will help ensure the continued reliability of the transmission system, which is vital not only to our current customers but also to support the development of the area’s economy. The availability of plentiful, reliable power at a comparatively low cost is crucial for business location and expansion. Powering Up Northeast Indiana involves rebuilding and improving power lines, installing some new transmission lines, building and improving substations, and updating equipment. The project will strengthen transmission capability in and around Fort Wayne. The work is part of a larger, regional upgrade effort by AEP. Transmission lines carry power over long distances, across multiple service territories and benefit customers in multiple states. Most costs will be spread among a number of utilities and are expected to have minimal effect on I&M’s rates.

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center in Marion, IN, creating up to 135 new jobs by 2018. The Troy, Mich.-based company will invest $30.1 million to construct and equip a 735,000 square-foot distribution facility on approximately 50 acres in Marion. The facility, which is expected to break ground this March and be complete in December, will allow the company to house all distribution operations at one location. Dunham’s Sports, which currently has more than 600 associates in Indiana, will begin hiring new warehouse associates in the fall of 2014. The company operates more than 200 retail stores across 17 states. The Indiana Economic Development Corporation offered Dunham’s Athleisure Corporation up to $500,000 in conditional tax credits and up to $50,000 in training grants based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. In addition, the IEDC will provide the community with up to $150,000 in infrastructure assistance from the state’s Industrial Development Grant Fund. The city of Marion is considering additional tax abatement and incentives at the request of the Grant County Economic Growth Council. For daily news from Northeast Indiana and around the state, visit our blog at www.buildingindianablog.com and follow us on Twitter @BuildingIndiana.

Central County Provides Funding for New Entrepreneurial Space MatchBOX Coworking Studio, of Lafayette, has received both an endorsement and funding from the Tippecanoe County Commissioners. Commissioner Tom Murtaugh announced the county is contributing $500,000 of the $1.5 million cost of interior construction at the MatchBOX space at 17 S. Sixth St. and $10,000 a year in operations funding, expected to be about $475,000 annually. First announced last March, MatchBOX’s plans and progress have proceeded quickly, said Ashley Scott, operations manager. The studio is slated to open in early spring 2014. MatchBOX Coworking Studio is a nonprofit venture that draws together creative people pursuing new ideas. The 10,000-squarefoot studio at 17 S. Sixth St., Suite X, Lafayette, is being leased for $1 a year from Tippecanoe County Public Library. Space is flexible. It includes an open area conducive for working as well as interactions and exchanges, dedicated desks and small offices. Memberships require a $99 one-time setup fee, with monthly fees from $50 for basic use to $150 a month for a re

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www.buildingindiana.com | MARCH / APRIL 2014

Sports Coaching Company Raises Funds Bookacoach (www.bookacoach.com), an online service marketplace for sports lessons in the U.S. based out of Indianapolis, announced that it has raised $250k in venture capital financing, bringing total investments into the company to $450k. Elevate Ventures of Indianapolis co-led the round along with existing investors based in Washington, DC and Greensboro, NC. Elevate Ventures’ investment was made through the Indiana Angel Network Fund, a seed and early-stage co-investment program under the U.S. Department of Treasury’s State Small Business Credit Initiative in partnership with the Indiana Economic Development Corporation. In addition to the financing, Kelly Schwedland of Elevate Ventures recently joined Bookacoach’s Board of Directors to support the startup’s aggressive market strategy and revenue targets. Funds from this round will support expanding the service to more coaches and parents nationally and product development to build on current feature sets for all users. Bookacoach is expected to announce the launch of the next version of its online service in Q1 of this year.

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served, set space. Access is available 24/7. The studio is overseen by MatchBOX Coworking Studio LLC, whose partners include: Lafayette and Tippecanoe County governments; Greater Lafayette Commerce, Lafayette Urban Enterprise Association and Lafayettech, all organizations; Tippecanoe County Public Library; and, from education, Ivy Tech Community College – Lafayette, Purdue Research Foundation and Purdue University. Wintek Corp. is a sponsor, providing at no charge a 1 gigabit symmetrical Internet connection.

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Putnam County Farmland Sells for $7 million The auction of 714 acres of Putnam County cropland attracted a capacity crowd of approximately 250 people as a local farmer outlasted other bidders for the cropland. The sale, which drew 59 registered bidders, was managed by Schrader Real Estate and Auction Company. The land went for a total of $7,012,500, with the 676 acres of cropland making up most of the total, selling for $6.885 million, or $10,184 per acre. The 38 acres of recreational land sold for $127,500 to a different buyer, said R.D. Schrader, president of the auction company. Schrader noted that the sale also reflects continued strength in the market for midwestern cropland. The land was offered in eight tracts, with bidders making offers on various combinations before ultimately selling to the two successful buyers. Most of the acreage is located along U.S. Highway 36 between CR 600W and CR 775W, approximately 9.5 miles northwest of Greencastle and 14 miles east of Rockville, Ind.

MARCH / APRIL 2014 | www.buildingindiana.com

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Lilly Endowment Boosts Wheeler Mission

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Wheeler Mission has broken ground for construction on a new two-story, 12,000 square foot facility that will provide expanded services for homeless men, thanks in part to a $1.5 million grant from Lilly Endowment Inc. Located at 117 N. East St., which is adjacent to and directly west of Wheeler’s existing Shelter for Men (520 E. Market St.), the new facility will contain a new laundry room, showers and restrooms, an expanded dayroom, a multi-purpose room and an elevator with access to dorms. The addition of this facility will create much-needed space for improved services to homeless men in the community. Upon completion of the new building, Wheeler will begin an immediate renovation on the shelter that will allow for an increase in bed space from 124 to 200 permanent beds. In the fall of 2012, Wheeler Mission launched a capital campaign to enhance and expand services to homeless men, women and children of our community. The expansion and renovation of the Shelter for Men is the first and most critical phase of the campaign. The Endowment’s grant brings to $5 million the amount that Wheeler has raised toward its overall goal of $6.5 million.

fast-fill Compressed Natural Gas (CNG) fueling station for the Muncie Sanitary District, touted as the first in that area. The station, equipped with two dispensers and four hoses, will initially serve to fuel the city’s trash truck fleet – which is currently converting the entire 12-truck fleet to CNG. The station, slated for completion in May of 2014, will allow the city to reduce their overall fuel spend by taking advantage of lower CNG fueling prices – but the cleaner burning fuel also reduces greenhouse gases from 30% to 90% when compared to comparable diesel powered vehicles and depending on the age of the vehicle being retired. The station will feature two Ariel 200 hp compressors capable of producing nearly six Gasoline Gallon Equivalent (GGE) of fuel per minute. In addition, the station will also include added fuel storage, which will help to speed the fueling of vehicles. In addition, the station will include two fast-fill dispensers with credit card readers, similar to what consumers are used to seeing at most public gas stations. According to city officials, the Muncie Police Department has already taken a proactive step by converting one of their police cruisers over to CNG in anticipation of the new fueling station. Other city officials say they’re looking into the possibility of converting their fleets as well. Muncie Mayor Dennis Taylor said he is excited about the station as it adds to the quality of life of Muncie’s citizens and puts Muncie on the cutting edge of environmentally conscious cities.

BUSINESS BUZZ

Lilly Endowment Boosts Wheeler Mission

TruStar Constructs New Natural Gas Station in Muncie TruStar Energy is excited to be constructing a new public

www.buildingindiana.com | MARCH / APRIL 2014

For daily news from Central Indiana and around the state, visit our blog at www.buildingindianablog.com and follow us on Twitter @BuildingIndiana.

University of Evansville Receives $3M Donation Irma Jean Rodgers’ career was spent teaching in Evansville – at Emma Roach Elementary (now Cedar Hall) and Central High School. She was a lifetime member of the National Education Association and a member of the Indiana and Evansville Retired Teacher Associations. Rodgers’ love for education lives on following her death through a gift of approximately $3 million to the University of Evansville. Rodgers’ bequest will be added to an already generous endowment in memory of her parents, Lettie and Clarence G. Rodgers, and her sister and brother-in-law, Helen and Charles A. Weber. Rodgers died February 8, 2013. Her gift to the University will allow for additional scholarships beginning in the fall semester this year.

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South The Port of Indiana-Mount Vernon Achieves Shipping Record The Port of Indiana-Mount Vernon finished 2013 by shipping more cargo during the fourth quarter than any other quarter in the port’s 37-year history. The 1.59 million tons shipped in October-December 2013 were more than the total annual volume for each of the port’s first five years of operations. For the year, the port handled over 4.15 million tons, up 21 percent from 2012. The significant increase in annual tonnage was driven by strong shipments of coal, grain, soy products and fertilizer. Coal was up 47 percent over 2012, while fertilizer shipments rose 42 percent and grain increased 38 percent from last year. Coal, grain and soy products made up approximately 75 percent of the port’s 2013 shipments. For the year, the port handled approximately 2,200 barges, 85,000 trucks and 26,000 railcars.

MARCH / APRIL 2014 | www.buildingindiana.com

Join hundreds of incredible women and the industries that support them at the fourth annual

Awards Banquet, Thursday, May 8th from 5-8pm at the Avalon Manor Help us honor Northwest Indiana’s incredible Influential Women of 2014! Visit nwiwomen.com or Call 219.226.0300 for Tickets, Sponsorships and Table Reservations .

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Growing from a national demand to integrate core school subjects with relevant problem solving skills, the organization offers curriculum tailored to each age group, including elementary, middle and high school students, with high school programs including a focus on biomedical science and engineering. Already doubling its staff in the last year, PLTW was recognized by the Indiana Chamber of Commerce last year as the third best place to work in Indiana. The Indiana Economic Development Corporation offered Project Lead The Way, Inc. up to $200,000 in training grants based on the company’s job creation plans.

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Businesses Announce Bloomington Expansion Plans AB BioTechnologies, Inc. and TASUS Corporation announced plans to expand their operations in Bloomington, creating up to a combined 15 new jobs by 2016.

2 0 1 2

AB BioTechnologies, a homegrown-Hoosier company that A

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develops formulations and manufacturing processes for injectable drug products, will invest $1.2 million to renovate and equip its current 1,100 square-foot laboratory in Bloomington. The company, which offers contract services in pharmaceutical and diagnostic formulation, thermal characterization and process development, will create up to 10 new jobs by 2016. As part of its growth strategy, AB BioTechnologies plans to begin developing processes and injectable solutions for clinical trials. TASUS, a Japan-based manufacturer of plastic interior and exterior automotive parts, will invest $2.8 million to renovate its current 105,000 square-foot Bloomington production facility and expand its distributed products warehouse and North American headquarters operations. As part of the expansion, the company will lease and equip a 9,000 square-foot facility to house its administrative offices and create up to five new jobs by 2016. The Indiana Economic Development Corporation offered AB BioTechnologies, Inc. up to $350,000 in conditional tax credits and up to $20,000 in training grants based on the company’s job creation plans. TASUS Corporation was offered up to $120,000 in conditional tax credits and up to $380,000 in training grants based on the company’s job creation plans.

Indiana Selects I-69 Build Team The Indiana Finance Authority (IFA) Board this morning made the preliminary selection of I-69 Development Partners, a team led by Isolux Infrastructure Netherlands B.V. to design, build, finance, operate and maintain I-69 Section 5 from Bloomington to Martinsville. Isolux has partnered with the local resources of contractors E&B Paving of Anderson, Force Construction Company of Columbus and Gradex Inc. of Indianapolis to preserve and upgrade the existing State Road 37 to interstate standards. The preferred proposal would design and build the project for $325 million. Construction will begin later this year and the 21

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new miles of interstate is scheduled to open by the end of 2016, several years ahead of schedule. The contract will limit the length and duration of lane closures to help maintain traffic flow for existing S.R. 37 traffic. For daily news from Southern Indiana and around the state, visit our blog at www.buildingindianablog.com and follow us on Twitter @BuildingIndiana.

www.buildingindiana.com | MARCH / APRIL 2014

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People News NWI Forum Chooses New Leader Heather Ennis will be the new President and CEO of the regional economic development organization. Ennis, the first woman to lead the group, will take the helm in early April. Previously Ennis was Executive Director of the Duneland Chamber of Commerce and President of the Duneland Economic Development Company improving the quality of life and breadth of economic opportunity within the five lakefront municipalities of Beverly Shores, Burns Harbor, Chesterton, Dune Acres and Porter. Additionally she was a member of the Northwest Indiana Forum Economic Development Committee, the Porter County Economic Development Alliance and the Porter County Jobs Cabinet.

The NAOHP Names Tim Ross as Midwest Representative The National Association of Occupational Health Professionals (NAOHP) recently named Tim Ross as its Midwest representative. Mr. Ross is Regional Administrative Director of WorkingWell Occupational Health, part of the Franciscan Alliance, and the out-going AtLarge representative on the NAOHP Board. At WorkingWell, Mr. Ross directs all as-

pects of eight occupational health clinics and on-site clinics. Prior to serving as regional director, he managed business development and coordinated physician relations. Mr. Ross is treasurer of the Northwest Indiana Business Round Table.

IMA Announces Giromini as Chairman The Indiana Manufacturers Association (IMA) recently elected the organization’s 2014 executive committee, announcing Richard J. Giromini as its 2014 Chairman of the Board. Mr. Giromini has served as President and Chief Executive Officer of Wabash National Corporation in Lafayette, Indiana since January 1, 2007. He joined Wabash National in 2002 as Senior Vice President and CEO, and was named Executive Vice President and CEO in 2005. In addition to serving as 2014 IMA Chairman, Dick serves on the executive committee and is incoming chairman of the Truck Trailer Manufacturers Association (TTMA); serves on the board and is a member of the executive committee of the Central Indiana Corporate Partnership (CICP); serves on the board of Greater Lafayette Commerce (GLC); and previously served on the board of Robbins & Myers (NYSE:RBN).

Sorkin Named New Medical Director at IU Health Ortho and Sports Anthony Sorkin, M.D., has been named system medical director of Indiana University Health Orthopedics and Sports Medicine. Sorkin joined IU Health Physicians a year ago to treat patients with traumatic injuries at IU Health Methodist Hospital—Indiana’s largest Level I trauma center which sees nearly 3,600 trauma cases each year. Prior to IU Health, Sorkin served as the director of orthopedic traumatology for Rockford Orthopedics—one of the largest orthopedic multispecialty groups in the Midwest. He also served as the codirector of orthopedic trauma services for the Level I trauma centers at the Rockford Health System and the OSF Saint Anthony Medical Center in Illinois while also serving as a clinical assistant professor at both the University of Illinois College of Medicine and Rush University Medical Center, where he established an off-site chief resident rotation in orthopedic traumatology. During his time in Illinois, Sorkin also started a musculoskeletal research foundation, created an annual regional orthopedic trauma symposium and was named one of “America’s Best Doctors” for six consecutive years.

USF Appoints Lee Business School Dean

University of Saint Francis Vice President for Academic Affairs Dr. J. Andrew Prall has announced the appointment of Robert Lee as Dean of the Keith Busse School of Business and Entrepreneurial Leadership. Lee completed a Master of Business Administration degree and a Bachelor of Science in Finance with a concentration in insurance at Ball State University. He is completing doctoral work in business administration with a specialization in advanced accounting from Northcentral University. Prior to joining the USF faculty in 2009, he served 10 years in governmental finance as the treasurer of Allen County, Ind., focusing on the continued modernization of the treasurer’s office. Before that, he worked in the property and casualty insurance industry and has administered technology initiatives with the Allen County Auditor’s Office and the Allen County Department of Planning Services. He is active at Blackhawk Ministries in Fort Wayne and has served on several governmental and community boards, including Community Action of Northeast Indiana, Retired and Senior Volunteer program and Fire Police CityCounty Federal Credit Union. He is treasurer of the Allen County Republican Party and past president of the Indiana County Treasurers Association.

www.buildingindiana.com | MARCH / APRIL 2014

Photo Feature RDA Approves Funding for Southshore Rail Extension

he first phase of the long-discussed West Lake Corridor rail expansion project took a significant step forward at the Northwest Indiana Regional Development Authority’s February meeting of the Board of Directors. The Board committed $8 million a year in RDA funds to match local funds generated for construction of the line.

Members of the Northwest Indiana Regional Development Authority’s Board of Directors approved $8 million in funding for the West Lake Corridor rail expansion project.

“I appreciate the commitment made today by the Regional Development Authority in support of this transformational opportunity for Northwest Indiana. Their foresight to connect our great region to the Chicago economy and to invest in our region’s future generations is commendable,” said Congressman Visclosky.

Beyond Safety Reliability Conference and Expo 2014

ore than 600 safety professionals and industry experts gathered in Merrillville, IN, for the 2014 Beyond Safety and Reliability Conference and Expo, an event dedicated to promoting a culture of safety across numerous fields and providing education to the people who keep workers safe on the jobsite. More than 50 exhibitors were displaying the latest innovations in safety technology on the tradeshow floor, and guests had the opportunity to earn continuing education credits during the two day conference. “Beyond Safety brings together some of the top safety professionals from all over the area,” BP Safety Specialist and NWIBRT Safety Committee Chairman Rick Foor said. “The event is designed to facilitate an environment where suppliers and prospective customers can interact in a relaxed yet professional setting, and where professionals can improve their skills through the education offered during the breakout sessions.” MARCH / APRIL 2014 | www.buildingindiana.com

STATE OF THE INDUSTRY

Planning Ahead

NWI’s Industry Outlook for 2014

By Dewey Pearman, Executive Director, Construction Advancement Foundation (CAF)

hroughout Northwest Indiana, numerous companies and organizations are working hard to design and support investment and economic development plans for the region. Taken separately, each one of these plans stands as important markers for job creation and future growth potential, but the fact that so many projects are taking place simultaneously reflects and considerable overhaul that the threecounty region is working towards. Using data available from each of these organizations, here’s a look at what Northwest Indiana can look forward to throughout 2014:

announced hundreds of millions in planned transportation improvements that will be taking place throughout the region, beginning in the immediate future. Quite literally hundreds of roadway and infrastructure projects will receive funding from this initiative, accounting for potentially thousands of construction jobs as a result. The size and scope of the projects range from small repairs and improvements to trail and forest preserve restorations, all the way up to much larger INDOT highway projects. Each project is detailed within NIRPC’s Transportation Improvement Program (TIP) which can be read in full on NIRPC’s website (specifically: www. nirpc.org/media/26301/tip_2014_2017_pub_comment_docs.pdf). “Back in the middle of 2011, our commission adopted a long range plan which combines transportation, land-use, economic development and the environment for the three-county region. It’s a vision for the future of Northwest Indiana to revitalize our region to make it more vibrant, accessible and unified. We involved a couple of thousand people over two and a half years in developing that plan, so it was really unprecedented outreach to the public and to our stakeholders and planning partners,” said Steve Strains, Deputy Director for NIRPC.

NIRPC Transportation Improvement Program INDOT Sponsored Projects

2014

2015

2016

2017

$62,473,215

$55,046,891

$142,336,000

$66,513,000

Northwest Indiana Regional Planning Commission (NIRPC)

Local Highway Projects

$78,926,097

$43,313,638

$80,713,848

$64,182,347

Public Transit Projects

$21,950,692

The Northwest Indiana Regional Planning Commission (NIRPC) has

Total

$163,350,004

$98,360,529

$223,049,848

$130,695,347

Source: Northwestern Indiana Regional Planning Commission, Transportation Improvement Plan (TIP)

www.buildingindiana.com | MARCH / APRIL 2014

Regional Development Authority (RDA) In addition to the massive commitment the Northwest Indiana Regional Development Authority (RDA) made when it announced its support of the multimillion dollar West Lake Corridor rail project, which is expected to bring major development to several Northwest Indiana communities and create an untold number of jobs, the RDA has also undertaken several other large-scale projects. The revitalization of the shoreline along Lake Michigan (estimated at $93 million) and the continuing efforts at the Gary Chicago International Airport ($166 million) are just two examples of major moves the RDA has made to create jobs in the area and augment tourism revenue and continued development throughout NWI. “Here in Northwest Indiana, RDA-funded initiatives have made huge strides toward revitalizing our shoreline and creating signature communities with strong appeal to companies as great places to live, work and play,” said Bill Hanna, president and CEO of the RDA. “We were pleased to be a part of bringing these projects to Northwest Indiana and look forward to working with local and state officials to attract even more jobs and investment to the region.” RDA Capital Construction Breakdown Total Project Costs (In millions $) Ongoing shoreline projects -

$93

(Hammond, Whiting, East Chicago and Porter) Ongoing Gary Chicago International Airport

$166

Project - Brownfield remediation grants -

$0.8

East Chicago Waterfront Park -

$52

Porter – Gateway to the Dunes -

West Lake Corridor Study -

(For $571 million construction project beginning in 2020) Source: Northwest Indiana Regional Development Authority

Local Businesses / New Businesses Over the last year there has been a strong influx of new businesses moving to Indiana and existing companies expanding here; bringing in hundreds of millions in new investment and hundreds of new jobs. The largest of these projects is the commitment Pratt Paper, LLC, has made to Porter County with their whopping $260 million investment in their new Valparaiso facility. Valpo mayor Jon Costas said that his administration believes Pratt Paper’s new facility is “the single largest private investment in Valparaiso’s history,” and is expected to create more than 130 new jobs in the area. Several entities collaborated to secure Pratt’s place in the region, including

MARCH / APRIL 2014 | www.buildingindiana.com

Wage Setting Data Total Project Costs (In Millions $) 10/12 – 2/13

10/13 – 2/14

$21.0

$10.2

$10.0

Schools

$17.2

$20.8

Parks

$0.65

$14.8

Infrastructure (sewer, water, etc.) Telecommunications

General Municipal

$5.3

$2.8

Misc.

$1.2

Total

$44.15

$59.8 Source: CAF

$15 million in energy and infrastructure incentives from NIPSCO, $1.4 million in tax incentives from the Indiana Economic Development Corporation, and $1.4 million from the RDA’s Deal Closing Fund. Another promising investment came to Gary from Canadian National (CN), who is spending $165 million to upgrade their Kirk Yard. The company has announced plans to relocate its Chicago area locomotive repair shop to Indiana as well. “Our Kirk Yard improvements will deliver significant gains in productivity and create new capacity for growth in the Chicago area. Additionally, the redesign of Kirk Yard represents a significant investment by CN in Northwest Indiana which will bring approximately 250 new jobs to Gary,” said Jim Vena, CN Senior Vice-President, Southern Region. Construction is also underway on the new Urschel Laboratories facility in Chesterton, which is expected to retain about 300 high-paying jobs in Northwest Indiana. Once this move is complete in 2015, the new facility will be the largest industrial employer in Chesterton. “There is nothing on the radar screen even close to this. This is a game changer for Chesterton.” said Chesterton Town Manager C. Bernard Doyle.

Public Agency Spending For all projects built by public agencies (cities, town, counties, schools, sanitary districts, libraries, etc.) in excess of $350,000.00 the public agency must hold what’s called a wage setting meeting. Meetings in Lake, Porter, LaPorte, Stark, Newton, Jasper and Pulaski counties are tracked, and current trends reflect an upward trend in public agency spending on capital projects, which in turn reflects a continued focus on economic development throughout the region. The following table shows the total project cost of projects, by category, for public agency projects that had wage settings for the periods October 2012 – February 2013 and October 2013 – February 2014. A comparison of the timeframes indicates an upward trend in local government spending in the near future.

NIPSCO NIPSCO’s seven-year electric system improvement plan involves more than a billion dollars worth of investment in capital projects, including $314.2 million in transmission projects, $544.5 million in distribution projects, and $214 million in overhead and economic development. The scope of these projects involve instillation of new transmission and distribution lines, new substations, upgrades to existing lines and substations, and replacement of aging infrastructure (such as poles, transformers, etc.). Construction on this massive plan is scheduled start in 2014.

Upcoming NIPSCO Capital Projects Project

Schedule

Cost

MCGS & RMSGS Flue Gas

RMSGS 2012 – 2014

$500 M

Desulfurization Compliance

MCGS 2013 – 2015

$240 M

2013 – 2015

$90 M

2014 – 2018

$328 M

2012 – 2019

$270 M

2014 – 2022

$1.8 B

Projects Automated gas and electric meter instillation Reynolds – (Duke Energy) Greentown 70 mile, 765 KV transmission line joint venture Reynolds – Topeka 100 mile, 345 KV transmission line Gas and electric transmission, distribution, and storage infrastructure projects (TDSIC) Source: NIPSCO

www.buildingindiana.com | MARCH / APRIL 2014

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RULE OF LAW

Local Control is the Key in Indiana Government Construction Finance By Thomas W. Peterson, Bond Council, Partner, TW Peterson Law

ithin the statutory framework of the Indiana Code, the financing of construction projects by school corporations and governmental units is filled with a significant amount of local control. Gone are the days where the Department of Local Government Finance had the power to approve or disapprove a project. Now local boards and councils only need to look to their patrons for the green light to undertake a building project. The path to approving a building project starts with determining the cost of a project. The costs include, however, more than just the hard cost of the equipment, materials and labor. The costs for professionals such as architects and engineers must be included. The expenses of selling bond must also be included in the cost of the building project. Projects under $2,000,000 can be approved by boards and councils with only one public hearing. Referred to as â&#x20AC;&#x153;Uncontrolled Projects,â&#x20AC;? taxpayers have no opportunity to stop a building project with a cost below $2,000,000 except to voice their disproval at the public hearing. However, the best way to win a fight is often to avoid the fight. When possible, schools and govern32

mental units may elect to reduce the scope of a proposed project just to remain below the $2,000,000 threshold. Projects may be separated by time or location. One must be careful, however, to insure that any building project is complete. Artificially dividing one building project into multiple project is explicitly prohibited by the empowering statute. Projects over $2,000,000 and up to $10,000,000 for schools and up to $12,000,000 for other governmental units, if requested, are subject to a petition/remonstrance process whereby supporters and opponents to a project would gather signatures of voters and property owners during a 30 day period. County officials tally the signatures and determine if the project will proceed. Projects over $10,000,000 (schools) or $12,000,000 (others) would be subject to a referendum to be held at the regular May or November elections. Taxpayers and voters can petition for the referendum to be held after the board or council has made a preliminary determination to undertake the project. In years that there are no regularly scheduled elections, there can still be a referendum held, but the school or local government unit must pay the expenses of conducting the election. Boards and councils may choose to conduct a referendum even if there is no opposition to the project. The benefit to electing a referendum is that projects approved by a referendum are www.buildingindiana.com | MARCH / APRIL 2014

paid from property tax levies that are outside of the constitu- monstrance and referendum processes. While the Superintentional levy rate limits known as the circuit breaker. If existing dent and Business Manager may promote a project, other emproperty tax collections are limited by operation of the circuit ployees may not during regular working hours. Teacher may breaker, a board or council may want to undertake a referendum not bring up the subject during parent teacher conferences (although they may respond to questions from parents) and no to ease the pressure on tax collections. Since the introduction of the local control process for build- communications promoting a building project may be sent home ing projects, the most frequently amended part of the process with students. Students may report on the process using print or broadcast media, but no students may be has regulated what a school or governmenidentified by school personnel on the basis tal unit can and cannot do during the con- Meeting with Bond Counsel of whether or not their parents support or test. Beginning with the adoption of the during the planning stage oppose a building project. preliminary determination to undertake the of a building project is vitally important. Knowing Meeting with Bond Counsel during the process, there is a laundry list of actions planning stage of a building project is vithat cannot be done. First, no public funds when and how to utilize the elements of local control in tally important. Knowing when and how to can be spent to support the approval of the utilize the elements of local control in the project. Supporters must raise independent the process can mean the difference between success process can mean the difference between funds for their campaign. Furthermore, in and disappointment in the success and disappointment in the approvthe case of a referendum, it will be necesal of a building project. sary to form a political action committee approval of a building project. All in all, local entities now hold a sigwhen funds are spent to support an issue in nificant amount of control when it comes to an election. It is wise to consult an attorney familiar with election laws to make sure that proper and timely developing and planning their own construction projects. Withfilings are made. Email and other communication systems may out having to acquire approval from the Department of Local not be used to promote a project unless the opposition is given Government Finance, local organizations are given the freedom to work with their constituents and formulate plans that best access to the same systems. Schools have additional limitations in both the petition/reserve their communities.

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southlakenissan.com 33

A Look Back COVER STORY

Detailing the Economic Significance of the BP Whiting Refinery Project for Indiana

By Nick Dmitrovich Top five states for BP total jobs supported (includes BP employees)

TX Texas 47.6K+ IN Indiana 43.6K+ AK Alaska 22.5K+ IL Illinois 13K+ WA Washington 7.9K+ Fast Facts About the BP’s Economic Impact on Indiana •

Three million US consumers in seven states rely on BP’s Whiting Refinery for fuel – more than the population of the Indianapolis metropolitan area.

•

BP’s Whiting Refinery is the largest producer of asphalt in the world, responsible for eight percent of all asphalt produced in the US.

•

BP Indiana’s Vendor Spending (In 2012): $400M+ (The state totals for number of vendors and amount spent with them was determined by the location of the addresses to which BP sent payments during 2012.)

he economic significance of the BP Whiting Refinery is so widespread that its full impact may prove impossible to fully quantify. To make an analogy, studying this facility can feel like standing too close to a painting – you’re only able to see a portion of the entire picture. The ripple effect begins right here in Indiana and extends out to hundreds of international markets, thousands of workers, and vendors from all over the globe. Beginning with the source of this economic tidal wave, the state of Indiana, certain elements are more clearly defined. For starters, the BP Whiting Refinery is the largest private sector investment in Indiana’s history, coming in at a whopping $4.2 billion. The massive refinery is situated along the Lake Michigan shoreline in Whiting, Hammond and East Chicago and has been converted process heavier crude oils from the Dakotas and Canada, where production has been expanding in recent years. During the peak of construction, 14,000 skilled tradesman and laborers worked at the refinery. The population of Whiting, IN is only about 5,000 people, which stands as a clear indication as to how dramatic an impact this project has made on the local area. “This project was one of the largest single capital investments the company made over the past few years. It’s really one of the crown jewels of the company’s investment program, particularly in the U.S., and this fits very well with our overall U.S. refining strategy to operate very sophisticated refineries in the northern part of the U.S. that are tied to readily available North American sources of crude oil and the overall retail market,” said Scott Dean, BP Director of Media Affairs, Downstream. “The project began in 2008 just before the start of the recession, and has literally been the source of tens of thousands of jobs over this period. By our estimates, the project contributed about $2.5 billion to the local economy during the construction period. We’re proud to have been a major employer of contractors during the past several years,” Dean said.

www.buildingindiana.com | MARCH / APRIL 2014

Now that the major construction that means opportunity. We are able to close eye on how the BP Whiting Refinery work has come to a close, the refinery will market that for private investment. We will impact gasoline prices both nationemploy approximately 1,900 to 2,000 work- also have a great workforce here in North- ally and internationally. Greg Lukowski, ers, and will spend about $3 billion annu- west Indiana, a great tax structure, a great Senior Petroleum Analyst for Gas Buddy, ally with outside vendors throughout Indi- business climate, and a great quality of said, “We’re extremely interested in this ana and Illinois. The company estimates life, and we are able to market all of those refinery project for a number of reasons, the most obvious one being that the size that as many as 60,000 jobs are supported things.” When asked about the factors that of this refinery makes it one of the largest by BP across these two states. Joseph M. Stahura, Mayor of Whiting, brought BP to Indiana, Kaliboski said, in the country, I think it’s the sixth-largest IN, said, “This refinery project has had a “With any major corporation, local fa- refinery in the United States. You’re talking great impact all around us, not just in the cilities are competing with their sister about an absolute engineering marvel cacity of Whiting. What’s often misunder- facilities around the world for this type pable of producing over 400,000 barrels a stood is just how far this impact reaches, of investment. I’d like to believe that In- day – that’s extremely important. And it’s because it’s difficult to quantify. But we diana House Bill 1858, that shifted the making accessible the heavy-crude from had many people who traveled great dis- assessment floors down to 10% from 30% Canada that many refineries were not able tances to come here for this project, and for steel and oil, was a large draw that at- to process. That’s a game-changer. From vendors from all over the world, so I be- tracted BP to Indiana. I think that was a a long term prospective, I have to believe that having greater access to Canalieve the impact goes a lot farther dian crude will ultimately help lowthan people think.” Now that the major construction work has come er prices, and I think we’re already “The presence of those conto a close, the refinery will employ approximately starting to see that. It’s reaching tractors, and other people who 1,900 to 2,000 workers, and will spend about $3 markets that it’s never reached became here for this project, probably billion annually with outside vendors throughout fore, and as a consequence of that allowed Whiting to skip the recesIndiana and Illinois. we’re seeing prices moderate.” sion. Seven new businesses opened Speaking on how the refinery during the construction phases, will impact gas prices locally, Luand we probably would have lost businesses otherwise. There was also a major advantage for BP Whiting Refinery kowski said, “Local logistics and regional logistics have a tremendous amount of imlot of investment taking place in the com- to attract their corporate investment. Bill Hanna, President and CEO of the pact at any given point in time. With BP munity,” Stahura said. “Additionally, another thing that peo- Northwest Indiana Regional Development Whiting, I think the whole region is in a ple often fail to realize about this project Authority, said that BP has been a partner much stronger position as a result of that is that a considerable amount of land had in development along Northwest Indiana’s facility than if it weren’t there.” On the subject of fuel prices, BP Dito be developed to physically get the proj- lakeshore, and has been a part of plans for rector of Media Affairs Scott Dean added, ect started. There was a lot of preliminary future development. “The catalyst for the redevelopment “The output of diesel, gasoline and jet fuel work underway long before the construction began, because property was needed of the lakeshore came from the public,” will increase somewhat approximately to conduct training, establish office space, Hanna said, “But there are several million about 15%, due to increased efficiency. allow space for construction materials, dollars from BP that have been invested in What that does to gas prices will depend this redevelopment. BP has also invested on a number of factors, including consumand a whole bunch more,” he added. Don Kaliboski, Economic Develop- millions of dollars in facilities through- er demand and the price of crude oil.” Taking into consideration all of these ment Director with the Northwest Indiana out the surrounding area as well, a ten or Forum, explained that there was actually eleven million dollar training facility is one important factors that BP Whiting has contributed to Indiana, from jobs, to revenue, a lot of development taking place roughly example. That all ads to the tax base.” “What we do next is about balance to land development (past, present and two years before the start of this project. “There was a lot of preparation work that and coordination. Improving the road sys- future), to efficient fuel production that’s needed to be done in the Whiting busi- tems to separate industrial traffic from expected to lower prices, to infrastructure ness unit,” he said. “The relocation of cer- commercial traffic will be a big step. Bus- improvements, and so much more, it betain aspect of employee housing, storage, ses and trains should also be included. As comes clear that the BP Whiting Refinery preparation of land spaces for equipment BP’s business model continues to expand, is truly one of the most important projects that was coming in, and major improve- they’re going to continue to bring in more ever conducted in the history of Indiana. ments to industrial sites around the BP folks for employment and use of facilities, Fundamentally, it was a major contributor so that’s a great thing. Suppliers and oth- in helping an entire region survive a mafacility were all part of that.” “Times are exciting now,” Kaliboski ers will bring opportunity too,” Hanna jor national economic recession, and it’s helped set the stage for a bright future for added. “There has been tons of industrial said. Fuel and energy analysts are keeping a thousands of jobs all around the world. land space that has been improved – and MARCH / APRIL 2014 | www.buildingindiana.com

SAFETY ZONE

Are Injury Costs Bleeding Your Bottom Line? By Mitchell Surovik, Consulting Director, 633 Safety Services

e all know that occupational injuries are expensive, but they may be more expensive than you realize. It is a given that our personal ethics exclude acceptable occupational injuries; there’s no comparison between the personal costs paid by employees through pain and suffering, and at times reductions in quality of life, to the financial losses a company experiences. There are additional financial liabilities that most employers don’t even consider, and being informed is necessary to make quality safety budgeting decisions. Even without considering the human cost, prevention is still more valuable than the cure. Injury costs are broken down into two groups, direct and indirect, direct costs being the easiest to evaluate. They’re made up primarily of medical costs which can include ambulance services, emergency room visits, follow up doctor visits, and rehabilitation costs. They vary, of course, depending on the nature of the injury. Your workers compensation insurance provider can give you an explanation of benefits for each incident that will include most of these costs. For most incidents though, the real costs are experienced in the indirect cost category. While putting an exact number to these expenses can be challenging, the totality of indirect costs can be as ambiguous as they are intrusive to your bottom line. The formula OSHA uses states the indirect costs of a $2,500 injury is $11,250. Bringing the total injury cost to $13,750. That puts your indirect cost at four and a half times the direct cost. This however, isn’t the whole story. The elusiveness of indirect costs is intensified due to their tendency to hide 36

www.buildingindiana.com | MARCH / APRIL 2014

amongst overhead usually considered acceptable costs of doing business. From a contractor standpoint, some indirects may not seem so damaging because they can be absorbed by billable categories. That is just one way indirect costs can hide from view, not from harm. The most substantial of the quantitative indirects comes in the form of increased insurance premiums. While many monetary considerations are realized on the front end of an incident, the most significant of the indirects comes in the form of Insurance premiums based on your experience modification rate or EMR. Your EMR is a number assigned to your company by the National Council on Compensation Insurance (in most states). It will translate into either a premium credit or a premium multiplier depending on your rate. The easiest way for me to explain workers comp is to relate it auto insurance. If a driver receives multiple citations and has a minor accident on their driving record they are going to pay more for the same insurance policy than someone of the same age and gender having no negative activity on their record. The reasoning behind the person with the active record paying more is the insurance company seeing them as representing an elevated risk of a significant liability. Workers compensation is similar in that the insurance company looks at your record. Evaluations are usually done annually and the loss data from the previous 36 to 45 months are considered when assigning your EMR. That means that an incident today can have you paying higher insurance rates for the next three to four years! That can add up to significant increases in workers comp insurance rates which translates directly into lost capital. This effect is even more severe when it comes to lost time incidents. Added to insurance cost indirects are: Wages paid to supervisors, managers, and members of your safety staff that will be performing incident investigations, completing incident reports, attending client meetings, and completing regulatory reports. If the injury is severe enough that an employee cannot complete there normally

assigned duties an additional employee will have to be hired and trained to complete the injured employeeâ&#x20AC;&#x2122;s tasks. Those expenses are not covered by workers compensation, giving them a direct impact on project profitability. With the real magnitude of the total injury costs being understood, you can start to get a sense of how truly exposed you are as an employer. You have heard that an ounce of prevention is worth a pound of cure. The hope is that by understanding the real costs of workplace injuries, you understand how valuable your prevention ounces are to the sustainability of your company. While we spend a lot of time talking about and focusing on the bottom line, the real savings in prevention is realized when we know that we have done everything we can to provide our employees with the safest workplace possible. Getting the job done without employee injuries is a lofty goal, but it is attainable. It requires placing your highest value on the safety performance of your individual employees and your company as a whole.

MARCH / APRIL 2014 | www.buildingindiana.com

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BOTTOM LINE

Earning that Gold Star Governor Pence Honored with Tax Foundation Award By Nick Dmitrovich

t the start of 2014, The Tax Foundation, the nation’s leading independent tax policy research organization based out of Washington, DC, announced their 2013 Outstanding Achievement in State Tax Reform award winners; one of which was Indiana’s Governor Mike Pence. This was the first time the Tax Foundation issued such an award in its more than 75 years of history. “2013 was an exciting year for tax reform throughout the states,” says Joseph Henchman, Vice President of State Projects at the Tax Foundation. “Numerous legislators made commitments to smarter, more principled tax policy. We are excited to introduce this new award in recognition of their efforts and are encouraged by the growing support for the kinds of policies this year’s honorees have worked toward.” The Tax Foundation announced that in 2013 “Indiana Governor Mike Pence achieved an income tax reduction while maintaining the state’s scheduled reduction in corporate taxes and elimination of the inheritance tax. Building on the administrative reform work of his predecessor Gov. Mitch Daniels, Pence has sought further business tax reforms, continued budget restraint, and a determination to make Indiana more attractive to investment and growth.” Prior to the announcement of this award, late last year Indiana had also been listed in the top ten on the Tax Foundation’s 2014 State Business Tax Climate Index. “We are grateful for the recognition of the progress Hoosiers have made. When it comes to state business tax climate, Indiana’s ranking as tenth in the nation by the Tax Foundation is further evidence that we are on the right track in cutting taxes and reducing regulatory burden,” said Governor Pence.

“As we continue to build upon our pro-business, pro-growth policies in the years ahead, we will continue to create the kind of environment in which businesses and Hoosiers alike can grow and thrive in Indiana.” Many of Indiana’s residents will begin to feel the impact of Pence’s efforts in 2015, when the personal income tax rate is scheduled to drop to 3.3 percent from 3.4 percent. In the meantime, Indiana’s corporate income tax rate will decline by 1 percent and the inheritance tax repeal was made retroactive to the start of 2013. “Indiana in the past few years has made concerted, well thought out changes to its tax code and it now has one of the best

www.buildingindiana.com | MARCH / APRIL 2014

tax codes in the country,” said Scott Drenkard, an economist with the legislative effort to enact the year’s most significant state the Tax Foundation. “These reforms have removed impediments tax reform, offering an impressive initial proposal and ultimately to business operation, and promote a more neutral playing field. crafting the version that became law. Provisions include reducing This effort has continued into the current legislative session, the individual income tax from a top rate of 7.75 percent to a flat where the legislature is considering changes to the business rate of 5.75 percent by 2015, a more generous standard deduction personal property tax and further base-broadening and rate for all taxpayers, a reduction in the corporate tax rate from 6.9 percent to 5 percent by 2015, and an immediate repeal of the lowering in the corporate income tax.” Other “2013 Outstanding Achievement in State Tax Reform” estate tax. Ohio activist Ron Alban: In 2011, Alban created and coordinated Award Winners Included: a grassroots effort of thousands that led to Michigan Governor Rick Snyder: In 2011, Many of Indiana’s residents the repeal of the state’s estate tax beginning Governor Snyder achieved the elimination in 2013. With an exemption level of just of the state’s unique and economically will begin to feel the impact of $338,333, about 8,000 estates each year paid destructive Michigan Business Tax (MBT) Pence’s efforts in 2015, when the tax in Ohio, harming family businesses replacing it with a corporate income tax. the personal income tax rate is Snyder has also successfully scaled back scheduled to drop to 3.3 percent and investment. Alban’s coalition-building skills and persistence overcame strong overly generous business tax incentives from 3.4 percent. opposition by special interests and local and demanded greater accountability and governments that sought to preserve the transparency from the ones that remain. New Mexico Governor Susana Martinez: Governor tax. Wisconsin Representative Dale Kooyenga: Representative Martinez proposed a far-reaching business tax reform and, by skillfully working with the Legislature, signed into law in 2013 a Kooyenga championed pro-growth state tax reform and worked final bill that included much of what she had sought. Provisions to ensure that the 2013 budget included income tax reductions include a reduction in the corporate tax rate from 7.6 percent to and some business reforms. While a modest first step, they are 5.9 percent over several years, tightening of some tax credits, a result of Kooyenga’s expertise and ability to craft reasonable, practical solutions to widely acknowledged problems with the and improvements to tax administration. North Carolina Senator Phil Berger: In 2013, Senator Berger led state’s tax system.

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M. J. Electric, LLC provides comprehensive electrical construction services specializing in utility, electrical, and instrumentation construction and maintenance.

INDUSTRIAL & POWER

MARCH / APRIL 2014 | www.buildingindiana.com

PROCESS CONTROLS & INSTRUMENTATION

UTILITY CONSTRUCTION

WIND POWER

SPECIALIZED SERVICES

STORM RESPONSE

FINANCE Facts & STats Cost of Living in Indiana

FY2014 Indiana Submitted General Fund Budget Data

Cost of living indices are based on a US average of 100. An amount below 100 means Indiana, IN is cheaper than the US average. A cost of living index above 100 means Indiana, IN is more expensive.

Cost of Living Indiana Overall 89 Food 92 Utilities 94 Miscellaneous 95

Overall, Indiana cost of

living is

United States 100 100 100 100

General Government

$589,381,474

Public Safety

$792,589,770

Conservation and Environment

$78,804,104

Economic Development

$70,971,150

Transportation $42,581,051 Health and Human Services

89.3

Education

$9,315,344,948

Construction

$281,573,528

Each Hoosier spends more on health care, on average, than the average American, even though Hoosier incomes are 15 percent below the national average.

“

Source: Indianapolis Business Journal. Author J.K. Wall, December 2013.

Leading Index for Indiana, December 2013 Change from Previous Month

LII Value

Warning Sign?

0.1% 101.8 NO

In December, the Leading Index for Indiana (LII) moved up, but just barely, to 101.8, an increase of a mere 0.1 from a marginally revised November. Source: STATS Indiana

14,629,

Source: IN.gov

Healthcare Spending

“

$854,057

Grand Total =

Source: Sperling’s Best Places

$780

$3,340,304,344

Data on Charitable Donations, By State, 2011

Indiana Illinois Ohio Michigan Kentucky

Number of Returns with Itemized Charitable Deductions

Amount of Itemized Charitable Deductions

634,550 1,730,798 1,305,919 1,174,285 439,603

$2,824,815 $7,117,252 $4,838,669 $4,727,347 $1,846,471

Source: National Center for Charitable Statistics, 2011,.

Indiana’s GDP, 2012

$298.6 Billion

Source: FRED Economic Data

Indiana Tax Foundation Ranking Indiana ranks 10th on The Tax Foundation’s 2014 State Business Tax Climate Index out of all 50 states.

Source: The Tax Foundation, a national independent tax policy research organization.

www.buildingindiana.com | MARCH / APRIL 2014

Most Profitable Hoosier Companies

Indianaâ&#x20AC;&#x2122;s Petroleum Pricing Data Domestic Crude Oil First Purchase Indiana

$95.72/barrel

WellPoint

$60,710.7

Eli Lilly

$24,286.5 MM

NiSource $6,019.1 MM Source: CNN Money, calculated 2012

U.S. Average

$96.24/barrel

Source: US Energy Information Administration

State Budget Shortfalls, FY2013 Budget Gap?

Total Shortfall

Yes

2,000 mm

Yes

371 mm

Yes

3,000 mm

Source: The Henry J. Kaiser Family Foundation

5 highest-paying occupations in Indianapolis

1 $226,980 2 $220,360 3 $219,230 4 $212,400 5 $204,960 Psychiatrists

Obstetricians and Gynecologists Internists, General Dentists, All Other Specialists, Physicians and Surgeons, All Other,

Source: The Business Journals. Author: G. Scott Thomas, 2013.

MARCH / APRIL 2014 | www.buildingindiana.com

SMALL BUSINESS

Where Are They Now? Truck City of Gary

To commemorate twenty years in business, the Regional Development Company (RDC) looks back at a few of the most successful borrowers and how the 504 Loan has helped their business evolve By Nick Dmitrovich

t’s amazing what a little boost can do. Over the past 20 years, the 504 Loans provided with assistance from the Regional Development Company (RDC), of Valparaiso, have helped veteran and fledgling businesses all over Northwest Indiana broaden their horizons. Truck City of Gary is just one of the many examples. Formed in 1946, the company boasts over sixty-five years of service as a heavy-duty truck dealership, selling and servicing Class 5, 6, 7, and 8 trucks in Gary, Indiana. After decades of success, one of the biggest challenges that Truck City of Gary faced a few years ago was the need for more space – as customer demand had superseded available facilities. One of the most important business decisions that the company made occurred in November of 2008, when Truck City of Gary partnered with the Regional Development Company and received their 504 Loan through Main Source Bank. Thanks to the RDC’s 504 loan, the company has been able to explore possibilities that were once only a dream, and went on to use the funds to build a new facility with frontage on Interstate 94. “We were in an aged building located at a site that we had outgrown. Our old location was not as convenient for our 42

customers as our new building location.” said President Gerri Davis-Parker, the granddaughter of the company’s founder. “We were looking for the best funding source for our relocation and construction of the new building,” recalled DavisParker. “We were able to stay in Gary and build a nice facility for our customers to visit and our employees to work.” Erica Dombey, President & Executive Director of the Regional Development Company, said, “We’re very proud of the success of Truck City of Gary. This is a prominent business that has been providing its services to Gary for decades, and

www.buildingindiana.com | MARCH / APRIL 2014

through its partnership with the RDC, the company has been able to attain new levels of growth and provide additional economic development in the community. Our hope is that the RDC’s efforts will help propel the company into an even longer and more successful future.” The new building was dedicated on what would have been the founder’s 100th birthday. A luncheon was held that saw over 300 customers, friends, and family gather to see a painted portrait of founder Paul G. Davis unveiled in the new lobby. Over its six decades of history, Truck City of Gary has achieved numerous milestones. The company is one of the oldest family-owned truck dealerships in the state of Indiana, and it’s the oldest familyowned Freightliner dealer in the country. Truck City of Gary is also the first Cummins dealer and on-highway Caterpillar dealer in all of Northwest Indiana. This is all didn’t happen overnight of course; it took the Davis family years to grow their business to the level it is today. Throughout its history, Truck City of Gary has stayed focused on its mission to deliver personalized service and top-of-the-line products to its customers; a strategy that has certainly proven to be effective for the company. Their decision to partner with the RDC launched an entire new chapter for the Davis family’s business, which goes to show how effective 504 Loans can be for any company, whether it be a young organization or one with more than half a century of experience. The Regional Development Company is a Certified Development Company licensed to make loans under the SBA 504 with a focus on assisting small businesses prosper to their full potential. For more information on what RDC can do for your business, visit www.rdc504.org or call 219-476-0504.

MARCH / APRIL 2014 | www.buildingindiana.com

MASS PRODUCTION

Indiana Leads the U.S. in Manufacturing Production, Employment By Tim Rushenberg, Vice President, Governmental Affairs & Tax Policy, Indiana Manufacturers Association

here has been a lot written in the last year about the manufacturing revival. And for good reason. The U.S. Department of Commerce issued a report in January 2013 that described manufacturing as “one of the major bright spots in the economic recovery” that has added “roughly 500,000 new jobs” and contributed “more than 25% of the overall growth in GDP [gross domestic product] between 2009 and 2011.” President Obama mentioned manufacturing five times in each of his 2013 and 2014 State of the Union addresses. In fact, in his 2013 speech he said “[o]ur first priority is making America a magnet for new jobs and manufacturing.” In Indiana, manufacturing accounts for over 28% of the state’s GDP – number one in the U.S. According to the U.S. Bureau of Economic Analysis, the Hoosier manufacturing sector generates $84.2 billion in economic output, which is over 21 times more productive than the agricultural sector ($3.9 billion in GDP) – an industry most often identified as the leading driver of Indiana’s economy – 3 times more productive than real estate ($27.7 B) and 3.6 times more than health care ($23.4 B). Without manufacturing, Indiana’s economy would collapse. In fact, since 2009, Indiana’s total economic output grew 18%. Manufacturing GDP increased 41% during that period, or over two times faster than the entire Indiana economy. This clearly indicates that Hoosier manufacturers spurred Indiana out of the Great Recession. In addition to economic output, the number of Hoosiers employed by manufacturers is impressive. The U.S. Bureau of Labor 44

Statistics reports that in December 2013 491,200 Hoosiers were employed by manufacturers, or nearly 17%, of the 2.9 million Hoosier workforce. Indiana’s share of the workforce employed in manufacturing also ranks number one among all states in the U.S. Altogether, Indiana is the most manufacturing-intensive state in the country. In terms of job creation in the manufacturing sector, the Indiana Department of Workforce Development reported in December 2013 that Indiana ranks second in the U.S. in the number of manufacturing jobs added (63,300) and third in the percentage of growth (14.8%) since July 2009. The manufacturing revival in job growth is not only good news for job seekers, but also good news for family income be

www.buildingindiana.com | MARCH / APRIL 2014

cause manufacturing jobs pay very well. In February 2014, the U.S. Commerce Department’s Economics and Statistics Administration found that new hires in U.S. manufacturing “continue to earn an average of 38% more than their counterparts in non-manufacturing jobs.” In Indiana, the U.S. Bureau of Economic Analysis shows the average compensation is about $73,500 per manufacturing employee, or over $30,000 more than the average annual compensation in other private non-farm sectors. Total compensation paid to Hoosier manufacturing employees has increased over 22% since the third quarter of 2009 as total employment grew nearly 60,000 workers. The average compensation per Hoosier manufacturing employee during that time period increased 6.5%. Fortunately, the manufacturing compensation and employment growth will likely have a positive impact on Indiana’s personal per capita income (PCPI) – a contentious issue at the Indiana General Assembly. The Indiana Business Research Center (IBRC) at Indiana University’s Kelly School of Business reported in December 2012 that the percent of GDP derived from manufacturing is positively correlated with household income: “While the relative magnitude is small, manufacturing (relative to other economic sectors) is shown to increase state incomes.” This positive impact on Hoosier PCPI is also evident in data from the U.S. Bureau of Economic Analysis. In 2012, Indiana had a PCPI of $38,119, which ranked 38th in the United States and was 87% of the national average, $43,735. Those figures are not good, but Indiana’s 2012 PCPI does reflect an increase of 4.9% from 2011 while the national change was only 3.4%. Thus, Indiana’s PCPI bested the national average during that time frame, and we should expect even more good PCPI news in 2014. In December 2013, the Center for Business and Economic Research at Ball State University reported in their Indiana Economic Outlook 2014 that Indiana is “expected to see accelerating personal income growth” outperforming our neighboring states. One can extrapolate based upon the data cited above that recent and expected improvement in Indiana’s PCPI is largely due to the strong employment and GDP growth in

the high-paying Hoosier manufacturing sector since 2009. Whether it’s GDP, job creation, or compensation, all signs are pointing up for Hoosier manufacturing. As the IBRC reported, “the manufacturing industry provides a key foundational base for our nation’s economic health and stability.” It’s time for all of us to recognize and celebrate Hoosier manufacturers for what they are: the economic engine that will continue to lead Indiana and the U.S. to economic recovery.

MARCH / APRIL 2014 | www.buildingindiana.com

Manufacturing Growth STATE

JOBS ADDED

RANK

Michigan

116,900

Indiana

63,300

Texas

56,100

Ohio

53,400

Wisconsin

42,900

Tennessee

22,400

Washington

19,500

Iowa

17,900

South Carolina

15,600

Illinois

14,600

Source: Indiana Department of Workforce Development, Beyond the December 2013 Numbers, Janurary 28, 2014

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BEING PRODUCTIVE

Preparing for the Worst:

A Crisis Management Scenario

By Frank Keres, President & CEO, Construction Risk Associates

ome statistics say that if you have a catastrophic fire in your main office the odds of not being able to return to full work ability increase by 10% for each day of not being able to work after the fire. When many talk of Crisis Management they refer to a job site accident or loss of management personnel, yet this severe loss scenario is not included in most Crisis Management programs. When planning, your first focus should be on your employees. Establish a documented procedure for determining who is at work each day; this can be on a location or department basis. Then, determine a meeting point outside the building and away from traffic and space that emergency vehicles will need. At the meeting point, determine who is present and who might still be in the building. Ask each department head to give you a list, in order of necessity, of 5 things they must have to operate and fulfill their job functions. Accounting may say invoices, bills, checks, and bank records, etc. Operations may say plans/specs, records of

previous similar jobs, bidder correspondence. Each department will have separate lists. There might be some cross-over between departments. Determine how to preserve, copy or re-acquire all of these items if there should be a fire. For some companies, they think that if they take the computer “discs” or tape away from the main office every night they are safe. Well, where are you going to use those data holders? Do you have another mainframe compatible computer somewhere else? What about those necessary papers? How will you know what was billed, invoiced? More importantly, how are you going to pay your employees or vendors, subcontractors, suppliers, accountants, lawyers, insurance, etc.? Do you have backup checks, enough to operate for a month or more? One cross reference is to determine what you would need to have for a complete accountant’s audit. What about telephones? You cannot work off cell phones for any great length of time. If your company had a “trunk” line; you cannot just call up the phone company to have them forward calls. You might have hundreds of extensions. Pre-plan with the phone company for this disaster by establishing a protocol.

Percentage of companies experienced one or more instances of system downtime in the previous 12 months. Those downtimes lasted 2.2 days on the average and cost each business an average of $366,363 a year. 46

www.buildingindiana.com | MARCH / APRIL 2014

Where are you going to operate? IF you don’t have a branch office Your competitors will with ALL the capabilities of the be talking about your home office, then you need another problem. Prepare a web location. Prepare for this by finding page that has all the a “hot” room, a “medium” room or necessary information a “cold” room. A “hot” room is one for Customers, Vendors, you have prepared for with all the Subcontractors, etc. Put necessary computers, phones, faxes, contact information and equipment and “paper” that you reassurances on this site need. There are several locations and be sure to update it where “hot” rooms are maintained. regularly until you are “Medium” rooms have some of these fully back to work. considerations; usually phone lines and computers. The last alternative is a space with electrical and undedicated phone lines. Consider your options and the possible ramifications when selecting a “room” Use your website. Your competitors will be talking about your problem. Prepare a web page that has all the necessary information for Customers, Vendors, Subcontractors, etc. Put contact information and reassurances on this site and be sure to update it regularly until you are fully back to work. Lastly, have fire drills so that employees know what to do. Regularly update your crisis plan to see if your plan has all contingencies covered. Don’t let a fire make you a statistic and put you out of business. Use your website.

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CONSTRUCTION FEATURE

“The Year of the Coliseum” Indiana State Fair Coliseum

Contractors / Subcontractors List Architecture and Design Work Populous

Indiana State Fair Coliseum Gets a New Look, and a New Future By Nick Dmitrovich

General Contractor Hunt Construction Group Testing Alt & Witzig ATC Patriot Engineering Demolition Renascent Inc. Campbell Land Development Construction Waste Foundations Gibraltar Construction Corp. Structural Precast Concrete Coreslab Inc. Sofco Erectors Structural Steel Geiger & Peters Inc. Plumbing, HVAC, Controls North Mechanical Electrical ERMCO, Inc. Roofing Horning Roofing & Sheet Metal Curtainwall Precision Wall Systems Inc. Elevators KONE Inc. Masonry Purdy Masonry Inc. Fire Protection Dalmation Fire Inc. Overhead Doors Professional Garage Door Drywall and Doors Interior Specialties Inc. Flooring The Blakley Corporation

014 has been dubbed the “Year of the Coliseum” by Indiana State Fairgrounds authorities, because this April marks the year when the historical arena get a new look, and some serious upgrades. Originally built in 1939, the building formerly known as the Pepsi Coliseum has seen more than 70 years of successful history – including a 1964 performance by The Beatles, and presidential speeches from historical icons such as John F. Kennedy in 1959, George W. Bush in 2003, and numerous others. But as the decades progressed, it became apparent that the facility needed to undergo an upgrade in order to keep up with the current demand. The facility had a large need for augmented accommodations such as clubs, restaurants, suites, technology, concessions and adequate support spaces that are all necessities in modernday arenas. As such, in 2011, Populous designers were contracted to develop the best solution to address the needs of an aging venue while maintaining its architectural and historical significance. Since October of 2012, the Indiana State Fair Coliseum has been closed for $63 million worth of planned renovations. $53 million of the funds were used for the renovations of the Coliseum, and $10 million was used for a smaller arena that will sit immediately beside the Coliseum.

Financing came primarily from bonds, and in part from a $10 million capital campaign. As of early 2014, fair officials are still seeking a title sponsor for the venue. Construction is still progressing on-schedule for the April opening. Joe Eckhart with Hunt Construction, the general contracting firm for the renovation, said, “We are going very well with schedule. We anticipate being able to turn this build over to the State Fairgrounds ahead of schedule, and we’re very confident of that.” The renovated coliseum will keep its classic art-deco appearance outside, but on the inside it will have a whole new look and feel. The main lobby will have a spacious design, with additional ticket windows to reduce lines, and the interior of the stadium will be equipped with a new lighting system and glass block windows to better illuminate the facility. The interior has been completely replaced with new, elevated public concourses separating attendee and servicing functions and state-ofthe art amenities. New, state-of-theart entertainment technology has also been added, including high definition video boards, sound systems and an engineered acoustical design that will enhance the spectator experience. The seating capacity was also increased by about 200 seats, bringing the total to

www.buildingindiana.com | MARCH / APRIL 2014

roughly 8,200 seats. There was also a congestion problem with the flow of individuals moving about the facility. Charlie Smith, Senior Architect and Principal of Populous, said, “The building had a dysfunctional circulation system, in terms of the individuals from the public, athletic teams, animals and service staff being able to move throughout the facility. We now have an upper and lower concourse system in place, one for the public and one for the service staff, which basically eliminates all circulation conflicts.” Once the Coliseum reopens in April, some of the additional new features will include: • A double-tiered seating bowl • A second-floor bar area that allows visibility into the arena • Full ADA accessibility • A curtain system that allows for natural or artificial lighting • A variety of other amenities “This is very exciting because the Indiana State Fair Coliseum is going to be bigger and better, but it’s also going to keep the integrity of the coliseum. It’s going to keep that tradition going, but yet it’s going to be a beautiful venue that’s going to be available to people all year long. I think people sometimes just think about it as something that’s used during the 17 days of the fair, but it’s really a very

would’ve skipped Indianapolis.” “Prior to the start of the project,” Klotz added, “We did quite a bit of study, including the economic impact of the Fairgrounds and, more specifically, the Coliseum. We found that the Coliseum had a direct spending impact of roughly $89 million on the local economy annually, and generates about 40 percent of all State Fairgrounds revenue. We expect those numbers to grow in the future as the Coliseum will be more versatile to allow us to turn the building over more quickly from one event to another, and more appealing for events than in the past.” All in all, the Indiana State Fair Coliseum isn’t just getting a makeover – it’s getting a whole new future. Once the facility reopens, it will once again become a premier location for the largest attractions that visit Indiana. The venue will provide millions of dollars to the surrounding community, and countless memories for the visiting spectators for decades to come.

big part of the fairgrounds all year long. I think we’re going to be seeing a lot more people, when they’re seeking a place for an event, looking to the coliseum,” said Cheri Daniels, former First Lady of Indiana. “People will be amazed by the renovation,” State Fair Executive Director Cindy Hoye said. “It SERVING NORTHWEST INDIANA FOR OVER WITH retains the building’s SCAFFOLD historic, iconic feel, and the natural lighting inside the arena is incredible just like it was when it originally opened in 1939.” The new facility will be able to host a variety of different types of events, from rodeos to hockey games, which ultimately will mean more • RENTAL revenue for the area. • SALES State Fair spokesman Andy Klotz said, “It’s • MAST CLIMBERS & SWING STAGES going to give us so • TRAINING much more flexibility. It’ll be key in keeping • INSTALLATION & DISMANTLE everybody happy. Bringing more events to town that maybe

MARCH / APRIL 2014 | www.buildingindiana.com

30 YEARS

219-932-3045

CONSTRUCTION FEATURE

Building a Healthy Future Areva Pharmaceuticals at Lanesville Contractors List Architect Kovert Hawkins Engineering Primavera and Assoc. Geotechnical Engineering Hagerty Engineering Site Work Estes Excavating Storm Drainage Fulkerson Contracting,Inc

By Nick Dmitrovich

onstruction is wrapping up on a

on project management, permits and other

brand new pharmaceutical facility in

miscellaneous items. He added that some ad-

Lanesville, IN – the first facility to be

ditional costs may be incurred as the project

established at the new Interchange Industri-

nears completion.

al Complex. Officials are excited about the $7

Areva President Victor Swaminathan

million dollar joint economic development

said, “Areva feels fortunate to have found a

incentive program, which came together

community partner in Lanesville, we are anx-

through a partnership between Lanesville,

ious to quickly turn those investment dollars

Construction Uesseler Construction

Harrison County, and the State of Indiana,

into jobs and growth opportunities for its

and the Indiana Economic Development Cor-

citizens.”

Concrete IMI Concrete

poration (IEDC) because the project is ex-

“Given the specialized nature of the

pected to bring long-term growth to the area.

medications we manufacture for the U.S.

Areva Pharmaceuticals, Inc., makers

healthcare system, we look for the local

and marketers of injectable and ophthalmic

and regional job market to provide us with

HVAC Cobb Heating & Cooling, Inc.

pharmaceuticals used for the treatment of

a wealth of talent and a commitment to the

cancers, hypertension, heart disease and

Areva long term vision,” said Greg Olson

Electrical R.I.C. Electric, LLC

glaucoma, serves a customer base consist-

Chief Operating Officer for Areva.

ing of hospitals, infusion therapy pharma-

The site is about 15 miles from the City

Glass Windows Wolf Glass Company

cies, mail order pharmacies, long term care

Center of Louisville and less than 25 miles

facilities, and more. Areva was the first com-

from the UPS World Hub at Louisville Inter-

Roofing Palmer Roofing and Sheet Metal, Inc.

pany to settle in at the Interchange Industrial

national Airport, on the eastern edge of Har-

Complex with their new global distribution

rison County. The Industrial Complex is also

center. Additional phases of construction

near the interstate interchange at Corydon,

planned for the future will include a facility

which has significant Commercial, Industrial

for on-site research and development and a

and residential development.

Plumbing Rite Way Plumbing

Drywall Ables Drywall Painting McCoy Painting, Inc. Telecommunciations Frontier Communications

facility for the manufacturing of sterile, in-

“The building has been designed and built to meet exacting Food and Drug Ad-

jectable pharmaceutical products. Darrell Voelker, Director of the Har-

ministration standards,” said Jeff Shireman,

rison County Economic Development Cor-

Construction Manager for this project. “One

poration, said that the total cost including

example of this design is that the building

all infrastructure development for the new

is pre-cast concrete with insulation sand-

60,000 square foot pharmaceutical distribu-

wiched internally in the concrete panels.

tion center was between $5 million and $5.5

This is more expensive, but very energy ef-

million. $3.6 million went into the building

ficient. The reason this is preferred is that

and components, $1.2 million was allocated

there is no insulation exposed on the inte-

Sprinkler System AA Fire Sprinkler Co.

for site work and infrastructure, $1.75 million

rior that could flake off into pharmaceutical

was spent on necessary sewer infrastruc-

products.”

Fence Down Home Fencing

ture, and an additional $700,000 was spent

Dock and overhead doors Sprigler Door Service, Inc. Security System Dallmann Systems, Inc. Dallmann Systems, Inc. Security System

Pharmaceutical Company is First to Build at Harrison County’s New Industrial Complex

Over twelve years ago, Harrison County

www.buildingindiana.com | MARCH / APRIL 2014

Economic Development Corporation (EDC),

over the next ten years, and officials are an-

business development will occur in the re-

in conjunction with the Harrison County Plan

ticipating some initial investment to occur in

gion to support this pharmaceutical opera-

Commission and Government Leadership

this area within the next 12 months. Retail

tion. The estimated impact from a construc-

began planning for a business park develop-

development is expected to happen first, as

tion project of this type is more than $8 mil-

ment near the Lanesville interchange on I-64.

the closest restaurant, gas station and bank

lion for just the initial building,” he said.

A Regional Sewer District was also formed at

are roughly two miles away.

The Indiana Economic Development

this time, but after engineering studies were

Areva plans to build a research and de-

Corporation offered Areva Pharmaceuti-

completed the EDC had trouble marketing

velopment facility and a production facility

cals, Inc. up to $2,000,000 in conditional tax

the area to developers because the closest

over the next five to ten years, which could

credits and up to $250,000 in training grants

waste water treatment was 2 miles away.

bring about an expected 170 jobs at an aver-

based on the company’s job creation plans.

Without sewer, developers found other plac-

age wage of $30 an hour. Voelker said that his

These tax credits are performance-based,

es to invest.

office estimates the economic impact of the

meaning until Indiana residents are hired,

Later on, in the summer of 2012, the

current development alone will be roughly

the company is not eligible to claim incen-

Regional Sewer District and the Town of

$330 million to the regional economy. “This

tives.

Lanesville cooperated to plan for a sewer

impact model anticipates that some other

line extension to the interchange area. While funding was not yet in place, Areva showed interest in the site in the fall of 2012. “A local Construction Management firm, James L. Shireman Company, encouraged Areva to consider this location,” Voelker said. “With Shireman’s help, the EDC put a comprehensive plan together and the county agreed to fund the sewer development at the same time they approved the $5 million loan to the EDC for developing the site and constructing the building to lease to Areva.” “The sewer project is now underway, and the estimated cost is $1.75 million which is in addition to the $5.5 million for the build-

WORK SAFE. GET NOTICED.

ing and site development,” Voelker said.

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“The Lanesville interchange area has always held great promise for business growth in our county, but the interest shown by Areva and the commitment to establish the infrastructure there is now making this development a reality.” Jeff Shireman said, “When we met with

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County Council Chair, Gary Davis added, “Areva brings to Harrison County the

type of company that’s perfect for economic development. Their initial distribution warehouse and eventual high-tech manufacturing facility will result in new jobs offering very competitive wages and long-term stability.” The incentive package includes land and infrastructure development taking place

MARCH / APRIL 2014 | www.buildingindiana.com

WELL BEING

Saving Without Losing

Ideas for Keeping Health Insurance Costs Down Without Cutting Benefits

By Nick Dmitrovich

t’s a common concern among Hoosier businesses these days: How do we keep our employee healthcare costs down without cutting benefits from our plan? Premiums have steadily risen over the last decade, nearly doubling what they once were, and human resource professionals are constantly faced with the problem of managing the costs that businesses face. Health insurance professionals have developed several strategies that companies can take into consideration when dealing with this issue, and we’ve compiled several of them into this article. Educate employees on the types of benefits offered It is not really safe to assume that all of your employees fully understand the value of the benefits they currently have. Your company could be paying for items that your staff is completely unaware of, which means that the value of your company’s dollar is not being used wisely. It’s essential to educate your employees on the maximum benefits offered and how to properly use them in order to ensure that your money is being well spent. Focus on the benefits that matter most to your employees Many companies cut benefits based on the costs associated with them alone. A better strategy would be to target benefits based on their efficiency and effectiveness, which can be evaluated by considering the demographics and needs of your staff. Perhaps your company primarily consists of younger workers, or you have more individuals of one particular gender; whatever the case may be, health coverage plans should be tailored to fit the needs of your staff, thus reducing costs on unnecessary expenditures.

Consider a stipend over group plan One option for companies that has been increasing in popularity so far in 2014 is switching from a group plan for the entire company to individual stipends for health insurance. With the new options available to individuals on the public marketplace under the new Affordable Care Act legislation, employees have the opportunity to purchase plans they may have previously found unaffordable without the offered tax credits. Companies have started to realize that they may be able to save a considerable amount of money by establishing a flat rate health insurance stipend for all employees. This also helps to foster fairness among staff members as each person is receiving the same amount. All a company would need in order to validate that the stipend is being used properly would simply involve collecting copies of the employees’ monthly bill for their selected insurance plan. This method can be an effective way for companies to save money, because the stipend can be developed to best fit an organization’s allocated budget for a number of years without constantly going up in price as a group plan would. Additionally, this also gives the employee complete control over which plan they feel is right for their particular health situation and their family.

Encourage your staff to take advantage of preventative care / wellness programs This item really cannot be stressed enough, because it spans such a wide array of dollar saving avenues. Of course, preventive medicine keeps employees protected against problems arising down the road, which in turn saves your company a great deal of money from losses of time and productivity. But, more importantly, promoting a wellness strategy among your staff will work to keep the entire employee body healthy – thus reducing the cost of premiums. www.buildingindiana.com | MARCH / APRIL 2014

Encouragement here is paramount, because statistically speaking individuals become much more successful in any endeavor if they have the right amount of support behind them. We often hear about unsuccessful wellness programs that are rather poorly implemented and not fully taken advantage of, but a Harvard University study of 100 peer-reviewed journals found that a properly designed wellness program can expect to yield an return on investment of $3.27 to every $1 spent on wellness programing in health care cost reductions and another $2.73 to $1 on absence and related costs after about three years. Itâ&#x20AC;&#x2122;s really about establishment, management and followthrough when it comes to successful preventative measures.

Whether your company opts to make a major change to your health insurance plans, or looks at several smaller cost-saving measures, there are certainly a wide variety of options available to businesses. There is no clearly defined solution that will work for every entity, because companies are as diverse as the staff members that make them run. Carefully examining your options and conducting your research is absolutely necessary for finding the option that best fits your particular business-health needs.

Establish a Health Savings Account (HSA) Health Savings Accounts (HSA) can offer your staff opportunities similar to those of a 401(k) or IRA, in that they are 100% tax deductible and can be used tax-free for qualified medical expenses at any time. HSA plans are typically affordable to purchase for most organizations, and they offer some very interesting additional tax benefits including tax-deductible contributions, and tax-free accumulation of interest and dividends. After an employee retires, the HSA plan becomes a very valuable retirement vehicle because it offers tax-free dollars for one of the largest expenses for retirees â&#x20AC;&#x201C; medical costs. In contrast, if a person puts all of their retirement funds into a 401(k) or IRA, they will have to pay taxes on that income before using it to pay medical costs.

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LOGISTICS

Who Pays the Toll?

New Budgeting Brings More Dollars to Indiana’s Roads

By Nick Dmitrovich

he end of the winter months always brings around a burst of roadway reconstruction to patch up the damage left behind by the ice and snow. But fixing potholes costs money, and the cost of everything is consistently on the rise, so what exactly has Indiana done to increase the available revenue for improvements and reconstruction recently? To answer this question, one must realize that there are two different categories of roads in Indiana which are managed by entities on different levels of administration. Essentially, local roads are maintained by their respective cities, towns or counties, while state roads, U.S. highways and interstates fall under the authority of the Indiana Department of Transportation (INDOT). Methods of funding differ depending on whether the roadway counts as a state or local road. “Most of the money for road maintenance and construction comes from the state’s motor fuel taxes. Motor vehicle drivers pay an excise tax of 18 cents per gallon on gasoline. Commercial truckers pay 27 cents per gallon in special fuel and surcharge taxes. In total, the state netted $870 million from these taxes and some smaller revenue sources for road funding in 2012,” said Larry DeBoer, Professor of Agricultural Economics at Purdue University. 54

“This money must be carved up between the Indiana Department of Transportation, which maintains state highways, and more than 650 county, city and town highway, road and street departments, which take care of local roads. The state’s motor vehicle highway (MVH) account has a formula that divvies up most of this revenue,” DeBoer said. One very interesting change that occurred in the Indiana legislation last year was the modification of how these dollars are distributed to its various recipients. As of July 2013, the gas tax budget will no longer fund the Indiana State Police and the Bureau of Motor Vehicles as it had done in the past. It is estimated that this change will free up roughly $140 million annually in new road funding that will be divided between INDOT and local governments (53 percent to INDOT and 47 percent to local municipalities). The Association of Indiana Counties has released data which stated this money will reflect an average of 35% in additional funding for each local unit. Additionally, the budget also directs one percent of overall state sales tax collected in the state to the motor vehicle highway account. This results in about $75 million per year in new road funding that will be shared by INDOT and local governments in the same 53 percent / 47 percent ratio. Adding in the fact that this fund will no longer be used to support the State Police and the Bureau of Motor Vehicles gives Hoosiers $215 million in new road www.buildingindiana.com | MARCH / APRIL 2014

funding this year. On the local level, the impact of these changes is certainly being felt. “When they told me this had passed in Indianapolis I almost cried,” said Daviess County Highway Superintendent Phil Cornelius. “We have been working on such a tight budget for so long, and now we have the funding to do more.” What makes these changes so interesting is the fact that Indiana’s Motor Vehicle Highway account has remained relatively unchanged over the last three decades. DeBoer explained that reasons behind the change had a lot to do with the current sale volumes of fuel taking place around the state, and increasing costs of road maintenance. “Motor fuel sales have been stagnant for more than a decade,” DeBoer said. “Fuel efficiency is up, so drivers are buying fewer gallons. Fuel prices are high, which discourages sales as people economize on driving. Income has grown slowly, so people try not to increase their spending on fuel. Indiana taxed 3.3 billion gallons of gasoline in 2001, and just under $3 billion in 2012. Revenue from the motor fuel taxes has edged downward.” “Meanwhile, the cost of road maintenance has increased,” he continued. “The federal government’s highway construction cost index has increased an average of 1.7 percent per year since 2001. That’s not a very rapid increase - inflation averaged 2.4 percent during those years - but it adds up to a 20 percent increase. Falling revenues and rising costs have squeezed our state and local road budgets.” Road funding is a top priority for counties because of how critical it is to economic development. Earlier this year Indiana House Representative Ed Soliday said, “Last year alone, over half a trillion dollars of goods traveled on Indiana’s transportation system, and roughly 1.7 million full-time jobs, in areas like manufacturing and retail sales, are dependent upon the state’s infrastructure network. Indiana, along with the rest of the nation, is experiencing a steady decline in tax revenue for infrastructure projects due to higher fuel costs, alternative fuel sources and better fuel efficiency. I am pleased that the House Republicans have emphasized the need to address this loss of revenue.” MARCH / APRIL 2014 | www.buildingindiana.com

Fast Facts about Indiana Roads •

Local Roads are maintained by a town, city or county. There are more than 84,000 miles of local roads in Indiana.

•

The Indiana Department of Transportation (INDOT) maintains interstates, U.S. highways, and state highways.

•

There are more than 12,000 miles of INDOT roads in Indiana.

Building? Maintaining? Expanding? Your Business–Built Better

The go-to site for business owners seeking construction professionals.

www.NwiConstructionDirectory.com Interested in listing your business on the directory? Go to www.NwiConstructionDirectory.com or call 219-226-0300 for more information.

WORKERS COMP

Turning the Tables

Using an Employee’s Own Actions as a Defense to Their Workers’ Compensation Claim

By Justin T. Nestor, Partner, Bryce Downey & Lenkov LLC

the course and scope of employment.

iven the “no-fault” nature of workers’ compensation, Personal Risks Unrelated to Employment Some of the most difficult claims are those which the employers often face an uphill battle in defending employees’ claims for accidental injuries allegedly employee sustained injuries in the course of the employment sustained at work. With the abrogation of the “traditional” (i.e., on the job and during working hours), but a question exists affirmative defenses, what options are left to defend these claims? as to whether the accident and resulting injury arose out of Often, one only has to look at the employee’s own actions to find the employment because the risk was purely personal to the employee or entirely unrelated to the work. The following are a viable defense to their workers’ compensation claim. The basic principle underlying establishment of workers’ some examples of defense strategies available where an employee is injured by activities involving risk personal compensation programs was that injured and unrelated to their employment. workers would receive benefits without The key loss to regard to fault, and employers in return employers with the Intoxication and Drug Use would receive limited liability. Essentially, enactment of “no-fault” In Indiana, a claimant’s entitlement to employees are entitled to benefits if the injury workers’ compensation workers’ compensation benefits is barred if the was caused by their employment, regardless systems was the loss of injury or death was caused by the employee’s of who caused the injury, and employers traditional negligence intoxication or drug use. For an employee’s would be responsible for specific benefits in affirmative defenses intoxication to constitute a defense to their exchange for the elimination of lawsuits for like contributory workers’ compensation claim, there must be negligence. negligence, proof that the worker’s intoxication was a The key loss to employers with comparative fault, and substantial factor in causing the injury. Thus, the enactment of “no-fault” workers’ assumption of the risk. while an employer raising the employee’s compensation systems was the loss of intoxication as a defense has the burden of traditional negligence affirmative defenses proving the intoxication was a substantial like contributory negligence, comparative factor in bringing about the accident, death fault, and assumption of the risk. Employers should look away from traditional methods of or injury, the employer is not required to prove the intoxication defending cases, i.e., the traditional negligence defenses, and look was the sole proximate cause of the accident. This defense will to investigating whether the injured employee’s own actions can require scientific proof of intoxication and employers should also provide a viable defense to their workers’ compensation claim. remember the burden of asserting this defense is on them. Two general categories of defenses based on an employee’s own action which have evolved include an employee’s personal risks B. Assaults and Fights Where Employee is the unrelated to the employment and an employee’s deviation from Aggressor 56

www.buildingindiana.com | MARCH / APRIL 2014

Generally, an injury to an employee as a result of an assault by a co-employee committed in the course of employment and arising out of some incident or condition of employment, is compensable as arising out of the employment. On the other hand, an injury arising from an assault committed for purely personal reasons does not arise out of the employment and is not compensable. The fact that an assault was provoked by the injured employee (i.e., the aggressor) does not necessarily render the injury non-compensable although it may do so if the aggression amounts to willful misconduct. An investigation into the cause and circumstances of the assault is critical to determining whether the employee’s injuries are compensable. C. Acts for Purely Personal Benefit Another area where an employee’s own actions may bar their workers’ compensation recovery is when they are performing acts purely for their own personal benefit. The key determination is whether the employee was injured by the nature of the work they are supposed to be performing or whether the injuries resulted from risks personal to the employee. Generally, the rule for denying workers’ compensation benefits for acts performed by employees solely for their own benefit does not apply to acts of personal convenience or comfort. Thus, acts that are reasonably necessary to the health and comfort of an employee while at work are incidental to the employment and are generally compensable. However, the activity must be reasonably foreseeable and incidental to the employment to entitle the employee to compensation.

not compensable under workers’ compensation because the injuries do not arise out of the employment. Some states, like Indiana, have allowed employers to protect themselves from liability for certain hazards by adopting and publishing rules prohibiting such activities. Violation of Company Rules Generally, violation of a safety rule or company policy may take the employee entirely out of the scope of their employment, and any resulting injury that occurs during the violation is not compensable. Likewise, an employee’s violation of work safety rules will bar recovery where the violation constitutes willful misconduct. Of note, denying compensability for a violation of a safety rule is subject to proof of a causal relationship between the violation and injury. Conclusion The by-product of the “no-fault” nature of state workers’ compensation systems makes it more difficult for employers to defend against claims where the employee’s own actions should be taken into account in determining compensability. Generally, the defenses based on an employee’s own actions will require proof of causation, i.e., that the conduct caused the claimed injury. Employers should carefully review their existing employment and safety rules, and make sure that employees have actual knowledge of the rules. Further, a thorough investigation for all claims where the employee’s own actions possibly caused or contributed to the accidental injuries should be immediately undertaken to determine whether a viable defense exists without reliance on traditional negligence defenses. Through the use of alternative defense theories and thorough investigation, employers and defense counsel can find ways to mitigate abrogation of the traditional common law defenses to defeat workers’ compensation cases.

Deviation from Employment Another category of defenses which will preclude recovery is when the employee’s actions deviate from the course and scope of their employment. But, when do an employee’s own actions completely remove them from the course and scope of their employment? Horseplay Generally, injuries sustained by workers engaging in practical jokes or horseplay are MARCH / APRIL 2014 | www.buildingindiana.com

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LIFELONG LEARNING

From Curriculum to Career How Schools Are Planning to Use Their Awarded Lilly Endowment Grant Funds

By Nick Dmitrovich

Purdue Research Foundation

The Purdue Research Foundation received $5 million from the Lilly Endowment, which they plan to use to implement the “Transforming Indiana into a Magnet for High-Technology Jobs” proposal. Suresh Garimella, chief global affairs officer for Purdue University and Goodson Distinguished Professor of Mechanical Engineering, led the team who developed the proposal. “Purdue already has a strong educational pathway to help our students move into high-tech careers in Indiana and we have a strong collaborative relationship with the Lilly Endowment. So, our working together to support high-tech job growth in Indiana makes sense,” Garimella said. “Some of the strategic goals we have proposed through the grant include the creation of ‘INcareer Express,’ which is a shared, interactive visualization platform for students to develop career mapping and networking. We also are launching the ‘Collaboration Express,’ a program to increase our partnerships with high-tech businesses in Indiana to help connect our students with these companies for internships while in school and possible jobs following graduation.”

ear the end of last year, the Lilly Endowment, a private philanthropic foundation created by founding members of Eli Lilly and Company, provided $62.7 million in grant donations to 39 accredited Indiana colleges and universities intended help improve employment opportunities for Hoosier graduates. These grant funds will give schools the ability to pursue a broad range of activities design to form pathways and connections between college educations and potential career opportunities. Specifically, schools have stated that they plan to use the funds to developing new courses, certificates, credentials and degrees, begin more deliberate career counseling for all students during their freshman year, offer more internship and co-op opportunities, and strengthen their efforts to promote entrepreneurship and technology transfer. The Lilly Endowment stated that: Nearly all colleges and universities will increase the number of internship and other experiential learning opportunities available to their students. More than three-quarters will expand and accelerate their career development and readiness programs. More than two-thirds will modify their curricula to better align courses with employer needs. “We are excited that through this initiative, Indiana’s 39 colleges and universities will pursue a plethora of strategies designed to help more of their students find satisfying job opportunities in the state, from enhancing internship and career guidance opportunities to encouraging entrepreneurship and from adding new courses and certificate programs to strengthening technology transfer efforts. We are impressed by their creativity and commitment to meeting these challenges,” said Sara B. Cobb, Vice President for Education at Lilly Endowment. Here’s an in-depth look at how some of the grant recipients are planning to use their awards: 58

Indiana University Foundation The Indiana University Foundation was awarded $5 million from the Lilly Endowment, which they are planning to use to support several strategic initiatives geared toward fostering a culture of entrepreneurship and innovation, and facilitating college completion through online degree and career development programs. Seven IU campuses will be using the funds to assist graduates find meaningful employment in Indiana. “The goal of this initiative — retaining our talented graduates in the state of Indiana — is fundamentally important to the economic vitality of our state and central to the mission of Indiana University as a public university,” McRobbie said. “The initiatives that we will employ with the support of this generous funding will mobilize the expertise of our nationally renowned faculty in innovation and entrepreneurship to nurture the kinds www.buildingindiana.com | MARCH / APRIL 2014

of ventures that employ our graduates, as well as graduates from Indiana’s other colleges and universities, for decades to come.” IU representatives have announced that the funding is going directly toward programs that are aimed at: • Increasing demand for college graduates in Indiana through discoveries, disclosures, and spin-up companies fostered by faculty and student activities and research at IU Bloomington. • Facilitating degree completion through the new IU Online office, as well as on-campus opportunities. • Providing a system-wide career development program for students, including those pursuing degrees online, that prepares them for knowledge-economy positions.

Ivy Tech Foundation The Ivy Tech Foundation was awarded roughly $4.9 million from the Lilly Endowment, which they are planning to use to implement a four-year transformative set of strategies designed to better align the school’s degree and certificate programs with the needs of Indiana employers. These strategies are intended to engage the entire academic institution and its constituents, along with an extensive array of business, education, economic and workforce development partners. Three key aspects of the plans include regularly gathering and evaluating employer and student survey data, expanding certificate and degree programs that are in demand by Hoosier employers, and augmenting career planning, internships and job

placements across all of Ivy Tech’s campuses. Ivy Tech published data which stated the college anticipates training, certifying and/or graduating 15,000 students with this grant support and placing 80 to 90 percent of certificate and degree completers in jobs.

DePauw University DePauw University received a $1 million grant from the Lilly Endowment, which they have announced will be used in a partnership with the Indiana University Kelley School of Business to launch a new program for DePauw students entitled “The Liberal Arts in the New Economy.” The partnership will offer DePauw students an opportunity to enhance the strengths of their liberal arts coursework with educational programs from the Kelley School of Business involving real-world internship experiences and specialized support designed to help students secure related job opportunities upon graduation from DePauw. “The Kelley School is committed to growing the state’s economy and helping to create future Indiana leaders,” said Idalene Kesner, Dean of the Kelley School and the Frank P. Popoff Chair of Strategic Management. “This collaboration with DePauw will help keep our outstanding liberal arts students in the state by helping them make connections with local organizations, grow their leadership skills and work to solve real-world problems in the Indiana business community.”

NORTHWEST INDIANA’S

ONLY DIRECT MAILED MEETING & EVENT PLANNING GUIDE.

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For more information or to reserve your advertising space contact Diane at 219.226.0300 or dtowle@buildingindiana.com

MARCH / APRIL 2014 | www.buildingindiana.com

GREEN & SUSTAINABLE

Sustaining a Future

ArcelorMittals Energy Saving Programs Save Millions

By Nick Dmitrovich

ast year, ArcelorMittal USA, which has Indiana facilities in East Chicago and Burns Harbor, earned the 2013 Energy Star Award for Sustained Excellence. This was the sixth year in a row that the steelmaking giant earned an Energy Star award from the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy, which issue the award based on a company’s efforts to continue growing their energy management programs and efficiency. Over the last eight years, ArcelorMittal USA has brought its energy costs down by more than $165 million through improvements in energy management. 2012 was a particularly good year for the company, when it achieved a 1.87 percent reduction in energy intensity for U.S. operations compared over the previous year, which is roughly the equivalent of powering 141,648 homes for a year. 60

In part, this reduction was created through the implementation of a $63.2 million project involving the instillation of a new energy-efficient boiler and other upgrades at the Indiana Harbor facility. Heat from the blast furnaces is now used to generate steam that in turn powers the plant. This new boiler has the potential to generate enough megawatts of electricity to power 40,000 homes for an entire year, which helps reduce the facilities carbon footprint by 34,000 tons annually. ArcelorMittal has stated that this new steam-generated power system saves the company an estimated $20 million a year, reducing the cost of producing steel by about $5 a ton. “Clearly, there’s a business imperative to reduce costs because we spend billions of dollars on energy. At the same time, when you’re wasting energy, you’re wasting something that can’t be replaced. In essence, you’re stealing from the next generation,” said Andy Harshaw, Executive Vice President of Operations at ArcelorMittal USA. www.buildingindiana.com | MARCH / APRIL 2014

“We believe that it is our responsibility to develop steel solutions and manufacturing processes that contribute to a more efficient and productive society. The modern world relies on ArcelorMittal steel products for its road, rail and energy infrastructure, its buildings, its household products, its packaging and its vehicles. Steel continues to be a vital part of the world we live in and it has an important role to play in helping to forge a more sustainable future. Because the success of our business is directly linked to the advancement of society, we are supporting transport infrastructure, making cars lighter, stronger and more fuel efficient through innovative solutions such as the S-in-motion and iCARe™ for electric cars,” wrote Michael G. Rippey, President and CEO of ArcelorMittal USA. The company’s automotive energy saving programs include efforts to make cars more environmentally friendly by equipping them with lighter-weight steel to better comply with today’s fuel-efficiency standards. Federal mandates require vehicles to have an average gas mileage of 54.5 mph by the year 2025. The S-in-motion research program looks for ways in which automakers could reduce the weight of vehicles while still using steel. Engineers, some of which include ArcelorMittal’s research team members at their East Chicago location, have already developed designs for vehicle components that are up to 34 percent lighter than older designs. The implications of this program have broad reaching energy saving potential, not just for ArcelorMittal but for the entire country. Another major endeavor that ArcelorMittal undertook was the dredging of the Indiana Harbor Ship Canal, which was conducted through a partnership with the United States Army Corps of Engineers and the EPA. The canal is a major shipping route for both the commercial and industrial sectors, and the dredging project helped restore the canal to its original depth. This allowed companies that utilize the route to carry larger loads per trip, thus reducing shipping costs for a multitude of companies. Additionally, contaminated sediments were removed from the canal, making the entire Lake Michigan tributary cleaner. This project began in the fall of 2012, and is expected to continue into 2018. There are several other major environmental programs that ArcelorMittal has put in place over the years including the recycling of steelmaking refractories that were previously only used a single time and disposed of, minimizing waste management disposal travel to reduce transportation emissions, reductions in air particulate emissions across numerous facilities, conversion to use natural gas in blast furnaces rather than coal, improved efficiency in product shipment, and others. Each of these programs strive to minimize the waste output and improve efficiency in the steelmaking process, thus making ArcelorMittal a leader in industrial environmental management. Lakshmi Mittal, Chairman and CEO of ArcelorMittal, has indicated that the company’s energy goals are clearly defined and simple. “I believe steel has a vital role to play in achieving a lower carbon economy, while ensuring that the world can continue to grow and prosper,” he said. The bottom line here is, these initiatives allow a myriad of companies to follow suit and improve their green standing while reducing unnecessary expenditures that were historically lost to waste – and less waste equates to more capital for everyone. MARCH / APRIL 2014 | www.buildingindiana.com

1600 Gilkey Avenue P.O. Box 350 Hartford City IN 47348 email: info@hpusa.net web: hp4stamping.com ph: 765.348.2710 fax: 765-348-2825

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MIDWEST SMOKE OUT The hottest cigar show in the Midwest is back for its 5th year, more popular than ever! Enjoy a night of cigars, spirits, and luxury at Hammond’s Horseshoe Casino.

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INFLUENTIAL WOMEN OF NORTHWEST INDIANA

Avalon Manor

May 8, 2014 5:00–8:00 P.M.

This one-of-a-kind awards ceremony recognizes Merrillville, the hard work and achievements of the area’s IN women professionals. Join us in honoring these incredible women and the changes they’ve made in their industries and communities. nwiwomen.com Avalon Manor This banquet awards ingenuity and creativity in construction and maintenance projects in Merrillville, Northwest Indiana. Awards are given for safety as IN well as excellence at this incredible banquet—a must-see for any business leader in the area.

CAF/NWIBRT AWARDS BANQUET

May 15, 2014 5:30–9:00 P.M.

nwibrt.org/awards

NWIBRT GOLF OUTING Come for the golf outing, stay for the charitable donations! Join us for 18 holes at the beautiful White Hawk Country Club, and rub elbows with Northwest Indiana’s most influential business owners and professionals.

White Hawk July 21, 2014 Country Club 8:00 A.M. Crown Point, IN

nwibrt.org/golf

To Register Your Event, Contact Diversified Marketing Strategies at 219.226.0300 or visit nwibusinessevents.com

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MARKETING

Marketing for Your Business Online

Tips for Jump-Starting Your Social Media Presence

By Kaitlin Williams, Marketing Coordinator, Diversified Marketing Strategies

here’s no question that social media has edged its way into every aspect of daily life. We’ve got Facebook on our phones and iPads, and the national news often features Twitter comments. The social media world is all around us, and many businesses are making the leap onto social networks in order to better represent their brand and interact with their customers. But is social media necessary for all businesses? Considering that 93% of Marketers say they use social media for business, the answer is a resounding “Yes.” So how do you go about creating and maintaining a business presence for social media? Here are a few tips to get you started: • Only pick a few social media sites to start with You know that old saying, “A jack of all trades is a master of none?” The same logic applies to social networks. It’s easy to get overwhelmed when you’re trying to choose between Facebook, Twitter, LinkedIn, Tumblr, Pinterest, Instagram, Vine, and everything else that’s out there. The goal is to start simply. If your business is heavily product-driven, then perhaps photo-centric sites such as Pinterest or Instagram would be the best way to display your company’s wares. However, if your marketing is mostly business-to-business, then you might see more success when connecting with other businesses through Facebook or LinkedIn. 62

The trick is to focus your time and energy on one or two social media networks and allow your presence (and your social media knowledge) to grow from there. • Concentrate on quality, not quantity In the days of its inception, social media was a numbers game. He with the most followers was king. However, as the online social world has grown and expanded, marketers have found that quality beats quantity every time. What does this mean exactly? Just like in real life, you want to build a committed community around your brand. Having a handful of faithful, returning customers is always better than a bunch of random clients who make one transaction and never return. The same is true of social media. 20 followers who consistently comment, like, and share your business updates will always be preferable to 200 followers who never comment, make purchases, or share what you say. • Start with half an hour a day Just because all the big brands have full-time social media managers doesn’t mean that you have to. One person is perfectly capable of maintaining a strong social media presence for your company—and it may only take 30 minutes each day to maintain! Once you have dedicated who will be managing your accounts, have them schedule a 30 minute time slot into their daily schedule for social media. Every day at this time they can update your account with news, photos, or other business. They can reply to comments, inter-

act with customers, and even post comments on other business’s pages. As your company’s social media presence grows, so will the amount of time you spend maintaining it. Maybe someday you’ll need a fulltime social media manager too, but for now, start small. • Still nervous? Bring in a professional If, after reading all this, the thought of signing up for a Facebook account still makes you queasy, it may be time to call in a professional. Marketing companies and consultants can help you assess your business and choose which social media accounts will give you the best return for your investment and time. Many marketing companies can set up your social media accounts for you, and they may be able to provide custom-made art for your company profiles. Hiring a marketing company can give you the peace of mind that comes with knowing you’re being set up by someone who knows social media inside and out. They can help you avoid rookie mistakes, such as leaving your company profile picture blank, and even help you create a calendar of post ideas and topics to help you engage your followers. Social media offers your business free and effective promotion, as well as an outlet to exemplify your services and products to an ever-growing pool of potential clients. In fact, your company’s presence on social media is inherent to its survival. As social media expert Erik Qualman recently quipped, “The ROI of social media is your business will still be here in 5 years.”

www.buildingindiana.com | MARCH / APRIL 2014

Choose a strong foundation for your growing business.

Purdue Technology Center and AmeriPlex at the Crossroads provide the right locale and environment for entrepreneurs to create and grow their businesses. Right location - close proximity to I-65 & U.S. 30. Room to grow - Purdue Research Park 392-acre site ready for build-to-suit. Superior facility - office and wet lab spaces, flexible space, competitive pricing. Business services - business acceleration, marketing, clerical support, mailroom. Personal learning opportunities - Tech Talk, Technology Road Shows, Angel Network.

For more information visit: Purdue Technology Center. 9800 Connecticut Drive, Crown Point, Ind. (219) 794-1492 www.purdueresearchpark.com/merrillville

MARCH / APRIL 2014 | www.buildingindiana.com

ECONOMIC DEVELOPMENT

Take a gamble, Support Your State

How the Hoosier Lottery Promotes Development Statewide By Nick Dmitrovich

QUICK STATS Fiscal Year 2012 Statewide Hoosier Lottery Distributions Payout to Winners

$415,305,412

Retailer Sales Commissions

$60,399,261

Payments to Indiana Vendors

$28,103,217

Police & Firefighter Pensions

$30,000,000

Teacher’s Retirement Funds

$30,000,000

Build Indiana Fund

$147,589,985

Statewide Total for 2012

$714,517,247

distributions Since the Hoosier Lottery’s inception in 1989 (As of April 2013)

Total Prizes Paid to Players

$9.2 billion

Transfers to the State of Indiana

$4.3 billion

Total to the Build Indiana Fund

$4.3 billion

Total to the Teachers’ Retirement Fund

$705.1 million

Total to Police Officers’ & Firefighters Pension & Disability Funds

$517.2 million

Total to Other Funds

$1.8 million

Total Retailer Commissions & Bonuses

$1.0 billion

any people see the Hoosier Lottery as a fun way to try their luck at hitting that highly sought-after jackpot; we buy a ticket for a small fee, and hope that our yacht and caviar dreams come true. Of course the majority of us walk away without winning anything, but we shouldn’t let the bitterness of losing linger too long, because we’ve made some important contributions to our state. Did you know that the Hoosier Lottery helps support pension funds for retired Indiana firefighters, police and teachers? How about supporting local and state construction projects? There’s a whole lot of statewide benefits that come from playing the Hoosier Lottery, whether you win or lose, we all kind of win. In 2012 (the most recent data available), the Hoosier Lottery contributed $30 million into Police and Firefighter pensions programs, and an additional $30 million into the Indiana State Teachers Retirement Fund. For the Teacher’s Retirement Fund, money is sent into what is referred to as The Pension Stabilization Fund, which is designed to address unfunded liabilities in the account. Because teacher pension payments are an obligation of the state and not local school corporations, it is not possible to allocate these lottery revenues by county. However, residents of each county benefit from this distribution. For the police and firefighter pension plans, the funds are distributed to individual communities each year in accordance with actuarial principles. In the past, police and fire pension payments were the responsibility of cities and towns. Beginning in 2009, the State of Indiana assumed responsibility for payments from the old plans and repealed the formula used to calculate the amount of relief distributed to municipalities from the Pension Relief Fund. Payments to municipalities www.buildingindiana.com | MARCH / APRIL 2014

continue from the Pension Relief Fund which also receives $30.0 to see a listing. “Whether you play the Hoosier Lottery or not, everyone still million of lottery revenues. The primary destination for Hoosier Lottery dollars is the wins. 94 cents of every dollar the lottery takes in goes back to Build Indiana Fund, which is used to support an entire spectrum Indiana, and to communities all across the state. In 1988 the peoof community development programs, including supplemen- ple of Indiana -- by way of a referendum vote -- cleared the way for the lottery to be established the following tal tuition support programs for students, year. Now after 25 years, the Hoosier Lottery property tax replacement funding, state and “Whether you play the has become an institution that continues year local capital projects, excise tax replaceHoosier Lottery or not, over year to give back to this great state,” said ment funding (which comprises the majoreveryone still wins. 94 Sarah M. Taylor, Executive Director of the Hooity of the Build Indiana Fund), and two adcents of every dollar the sier Lottery. ditional transfers to the state’s General Fund lottery takes in goes back to Other key recipients of Hoosier Lottery and Highway Fund. During fiscal year 2012, Indiana, and to communities dollars include the retailers who sell the lotthe Hoosier Lottery contributed over $147.5 all across the state. tery products, and the vendors who produce million to the Build Indiana Fund. - Sarah M. Taylor, Executive Director of the advertising, printed media, signage, etc. Roughly two-thirds of the Build Indiana the Hoosier Lottery Approximately 7% of all Hoosier Lottery money Fund is used towards excise tax relief, spegoes towards the retailers, who in turn support cifically to reduce automobile excise taxes, which helps to reduce automobile excise taxes for Hoosiers by an untold number of jobs throughout the state. “The retailers and 50% each year. Additionally, the money from the Build Indiana vendors create jobs, pay taxes and contribute to communities’ Fund can be used to fund state and local capital projects, fund economic health,” Taylor said. So the next time you buy a scratch-off ticket, or pick some economic development grants, and the Indiana Technology Fund Powerball numbers, don’t be too sad if luck’s not on your side which helps schools and libraries upgrade their technology. Millions of dollars has been allocated to local Hoosier proj- with a winning ticket, because you’ve made a small contribution ects from the Build Indiana fund over the years, including local to numerous important programs throughout Indiana. Consider libraries, Indiana University’s Proton Therapy Center, technology your dollar to be invested in the state, rather than lost completegrants, infrastructure improvements, environmental cleanup ef- ly. You’ve helped support jobs, educators, first responders, eduforts, and so much more. Visit http://www.in.gov/sba/2399.htm cational programs and institutions, and much, much more.

Summer Conference Network with Economic Development leaders throughout the entire state of Indiana.

For more information, or to reserve your spot: Contact Jill Ewing (317)454-7013 jillewing@ieda.org www.ieda.org

Thursday, June 12, through Friday, June 13 in Fort Wayne, IN

MARCH / APRIL 2014 | www.buildingindiana.com

The Last Word The Real Estate Rebound By Brian D. Specht, Vice President and Credit Manager, American Savings, FSB.

uch of Northwest Indiana to manage itself and does not overly (NWI) is starting to see the favor a borrower that is unable to pay rebound in the real estate their mortgage. As a banker, I still think market after almost five years of that the system is slower than it should significant decline in new home sales be, but it is better than in neighboring and home values. There are several states. This has allowed the banking different reasons as to why NWI did not industry to take possession of the see as significant a decline in property homes more quickly and sell them more values as our neighbors in Illinois and quickly, limiting their inventory. This why our rebound is ahead of some puts new buyers that have the ability to pay the mortgage in these homes and communities in Illinois. First, the builders in NWI never held does not run down the neighborhood as large a land position as builders in with vacant and abandoned homes. Illinois did. Many of the builders in NWI were smaller builders who had The court systemâ&#x20AC;&#x2122;s ability to help give lenders an ample supply of lots, but did not the ability to foreclose on properties when have a massive 5-10 year supply of borrowers are unwilling to pay or unwilling to lot inventory or raw land like many restructure their mortgage has assisted in a of the larger builders in Illinois. quicker turnaround for the market. This allowed them to manage their inventory better during the slowdown and continue to operate While this may sound harsh, it is reality. and build homes without the huge land The fact that banks have been able to get the inventory back and resell it to burden. Another reason that I believe has qualified buyers has truly assisted in had a significant impact on the NWI the market rebound. Across the border in Illinois there housing market may surprise many. One of the more significant factors is are still a large number of abandoned the court system in Indiana. The court properties that the banks cannot systemâ&#x20AC;&#x2122;s ability to help give lenders gain control of due to the delays in the ability to foreclose on properties their court system. While the Illinois when borrowers are unwilling to pay or courts believe that they are protecting unwilling to restructure their mortgage consumers, they are really doing has assisted in a quicker turnaround more damage to the neighborhoods for the market. The Indiana court and neighbors of those consumers system allows the foreclosure process that are unable to pay their mortgage.

Further, because these homes become abandoned and the banks cannot gain control of them, some homes may fall into disrepair and become unrepairable. In some instances, even the banks may completely walk away from the property, leaving a boarded-up and abandoned building in a neighborhood that is trying to stabilize and rebuild. Obviously, this continues to delay the recovery. Finally, builders in NWI have continued to build during the downturn. While the building slowed and financing was more difficult to obtain, the builders used their own resources or found investors to continue to build, if on a limited basis, to keep the new home market moving forward. While some NWI builders may have been selling 50 homes a year before the downturn, they downsized and were able to move forward while selling only 10 homes a year. These same builders are now seeing the recovery more quickly than builders in other surrounding communities. While we are enjoying the rebound, both builders and lenders need to continue to proceed with caution and make sure that supply meets demand without oversaturating the market. As a lender, I look forward to a few years of improvement in the homebuilding industry, rather than the foreclosure business.

The opinions expressed in this article are the views of the authors. We welcome your response. If you are interested in writing an opinion piece, send an e-mail to editor@buildingindiananews.com.

www.buildingindiana.com | MARCH / APRIL 2014

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