Building Indiana: March / April 2015

Beer Money 34 | Great Things on the Horizon 41 | Lafayette Takes to the Skies 46

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2015 Financial Issue

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Publisher’s Desk Breaking the Ice

www.buildingindiana.com www.buildingindianablog.com

Finally, the icy grip of winter is beginning to loosen and Indiana is coming back to life.

Spring is such an inspiring time of year, especially for business in Indiana. It feels like this season is ripe with creative thought and new ventures, when professionals from throughout the state break free from their office and set out to meet new friends and clients. I say, go for it! Get your people out there to network, and you’ll be surprised by what they bring back with them.

When opportunity meets availability, great things happen. Which is why it’s so impor-

tant to always be branching out. Opening doors allows revenue to enter, and paves the way for companies to expand.

The central element of any successful business is its revenue stream. To place a stron-

ger focus on the core of Hoosier business, our March-April 2015 issue highlights numerous topics that fall under the umbrella of finance. We’re taking a close look at the money behind several of Indiana’s largest news stories, including the new $100 million GE Aviation facility in Lafayette, small business financing, the economic impact of Indiana’s alcohol manufacturing industry, the hidden costs of a workplace injury, and so much more.

There are so many developments taking place regarding Hoosier money every day, it

was exciting to boil everything down into our concise format. Ultimately, we decided to select a diverse pallet of information to present our readers with array of fresh topics.

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CORPORATE HEADQUARTERS 1330 Arrowhead Court Crown Point, IN 46307 Publisher Andrea M. Pearman apearman@buildingindiana.com Sales Ted Lykowski tlykowski@buildingindiana.com Tammie Reynolds treynolds@buildingindiana.com John Moore jmoore@buildingindiana.com Writer/Editor Nick Dmitrovich ndmitrovich@buildingindiana.com Art Directors Jeff Fogg jfogg@buildingindiana.com Jeanette Cherry jcherry@buildingindiana.com Accounting Craig Marshall cmarshall@buildingindiana.com

As always, our goal is to deliver the very best Indiana business news right from our desk

to yours. For this issue, we’ve assembled an outstanding group of contributing financial experts. These individuals have enhanced our publication with decades of knowledge acquired from numerous aspects of Hoosier finance, and we truly appreciate their expertise.

Our hope is that our finance issue enlightens and inspires our readers during this

wonderful season as much as they inspire us. Without our readers, we wouldn’t have a magazine. We’d thank each and every one of them for joining us

Indianapolis Office Business Development Manager Lee Ann Richardson 888.226.0330

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in celebrating the best of Indiana business.

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Andrea M. Pearman Publisher

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Copyright ©2015 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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Yes, smoking is allowed. for tickets visit WWW.MIDWESTSMOKEOUT.COM or call 219.226.0300

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Contents

9

MARCH/APRIL

2015

EVERY ISSUE

D E PA R T M E N T S

04 Publisher’s Desk 08 Contributors 10 Business Buzz 20 People News

43

EXPERT ADVICE

24

State of the Industry

RULE OF LAW Fraud: No Company is Immune

28

30

Safety Zone Stand Down for Construction Safety The bottom line The Only Constant

34

22 32

PHOTO FEATURE

Small Business Spotlight

What Can You Do with

an SBA Loan?

34 cover story

46 6

38 41

Beer Money

Construction Feature Lafayette Takes

to the Skies

49

Construction Feature

Keep Indy Rolling

52

YOUR WELL-BEING Safe from the Affordable Care Act Penalties

54

LOGISTICS Keeping Things Rolling

56

58

60 F E AT U R E S

46

26

BEING PRODUCTIVE

Elements of Excellence

62

WOrker’s comp Uncovering Hidden Costs of Workplace Injuries LIFELONG LEARNING It CAN Be Done Green & sustainable Sustain Your Business marketing Video Marketing

64

Economic Development

Regional Cities Initiative

66 the last word

Human Capital and the Art of Giving Back

Facts & Stats mass Production Great Things on the Horizon

We welcome our readers to provide our editorial staff with suggestions on emerging issues, trends and opinions offering a different perspective.

Contact: editor@buildingindiana.com

www.buildingindiana.com | MARCH/APRIL 2015

Lung Cancer Alliance

SCREENING CENTER OF EXCELLENCE

Responsible Screening & Care

inspiring health MARCH/APRIL 2015 | www.buildingindiana.com

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Contributors The American Society of Safety Engineers (ASSE)

Matt Glaros

Founded in 1911, the American Society of Safety

Matt Glaros is Chief Strategy Officer at Meyers Glaros

Engineers (ASSE) is the world’s oldest professional

Group, a leading an insurance agency in Northwest

safety society. ASSE promotes the expertise, leadership

Indiana. Matt has been recognized with many

and commitment of its members, while providing them with

awards and speaks regularly on healthcare reform. Matt lives in

professional development, advocacy and standards development.

Valparaiso with his wife Kelly and three children. He is an avid

It also sets the occupational safety, health and environmental

golfer and enjoys skiing and running.

community’s standards for excellence and ethics.

James Bianchi and Jonathan Zeiler Jim Sandrick

James Bianchi, CPA, CCIFP, is a senior

Jim Sandrick is a Navy Veteran and has forty-two

manager in the construction services group

years experience as an independent agent. Jim works with families and business owners from start up

of Crowe Horwath LLP, one of the largest public accounting and consulting firms in the U.S. He has 12 years

through transition. Although he primarily services NW Indiana

of experience in the public accounting industry, providing financial

and Chicago, he works with agents around the state that he trusts.

statement audit and preparation services to multiple industries,

He loves providing financial literacy workshops for businesses,

including construction.

organizations and schools.

Jonathon Zeiler, CPA, CCIFP, is a partner in the construction Dewey Pearman

services group of Crowe Horwath LLP. He has more than 20 years

Dewey Pearman serves as Executive Director for the

of public accounting experience in managing and performing audit,

Construction Advancement Foundation. He has a

accounting, and management consulting services to contractors,

Master’s in Economics from Indiana State University.

AE firms and other construction industry related companies.

The foundation promotes the union construction industry of northwest Indiana by helping to enhance its efficiency and

Cathy Csatari

competitiveness via labor relations and government management,

Cathy Csatari is a Senior Environmental Manager with

education, training, safety and workforce development.

the Indiana Department of Environmental Management (IDEM). She has been in the environmental field for over

John Freyek

20 years in both the private and the public sector. In her position at

John Freyek is Vice President/Senior Relationship

IDEM, Cathy crosses many different disciplines, offering regulatory

Manager at First Merchants Bank. He is a lifelong

compliance assistance to manufacturers and other sources as well as

resident of Northwest Indiana, and a graduate of Purdue

presenting on topics of interest at conferences in the region.

University Calumet. John lives in Winfield, Indiana with his family.

He is passionate about community service, and currently serves as

Eric Doden

Board President of Mental Health America of Lake County, Inc.

Eric Doden serves as the president of the Indiana Economic Development Corporation where he helps lead

Linda Woloshansky

the state’s economic development efforts. Doden most

Linda Woloshansky is the President and CEO of

recently worked as a principal for Domo Ventures LLC, a boutique

the Center of Workforce Innovations, Inc. and the

private equity firm located in Fort Wayne, IN. Prior to this role, Doden

Northwest Indiana Workforce Board. She has 28

worked as director of investments for Ambassador Enterprises where

years of experience as a CEO of four companies. Her experience

he developed and executed strategic investment plans. He has more

includes working for the private sector, school systems, the state

than 15 years of management and economic development experience.

of Indiana and non-profits in many different capacities. She is a certified Six Hats trainer, School-to-Work Specialist, Certified Training Consultant (from Ball State University), and has taught at state universities and economic development institutes throughout the country.

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www.buildingindiana.com | MARCH/APRIL 2015

Main Buzz

The Legend Continues

Midwest Smoke Out Returns with New Location and Added Accommodations

By Nick Dmitrovich

T

he 2015 Midwest Smoke Out is officially just around the corner!

This year, the 6th annual Smoke Out is bigger and better than ever and will be held at the Radisson Star Plaza Hotel in Merrillville, Indiana, on Thursday, April 30th. If you’re in the mood for an evening of premium cigars, luxurious comforts, top-shelf spirits and gourmet food, then you definitely need to get your tickets to the Midwest Smoke Out as soon as possible.

One of the most interesting and unique aspects about the Smoke Out applies directly to business professionals and other corporate entities. While the event certainly contains something fun for everyone – smokers and non-smokers alike – professionals have keenly taken advantage of the relaxed and enjoyable networking opportunities found only at the Smoke Out. Whether you’re looking to entertain clients, or provide an exciting night out for your employees, the atmosphere and amenities of the Smoke Out provide a guaranteed way to create an unforgettable impression.

For those with an eye for the absolute best-of-the-best, the Smoke Out has exceptional hospitality suites available for reservation.

These locations can facilitate an ideal way for corporate groups to give their clients a night they’ll never forget, with a private bar, incredible food brought right to the suite, available

service staff, and the chance to relax and chat without having to worry about the crowd.

This year, for the first time in the event’s history, guests at the Smoke Out have a special discount available for hotel rooms at the Radisson Star Plaza Hotel. The Smoke Out’s coordinators want each and every guest to have the time of their lives, and the proximity and convenience of the Radisson’s accommodations ensure everyone a peaceful night’s sleep. There’s no reason to worry about driving home safely when you can simply spend the night!

The 2015 Midwest Smoke Out is coming to The Radisson Star Plaza Hotel in Merrillville, IN on April 30th.

Don’t miss your chance to be a part of the largest and most exciting cigar and luxury event found anywhere in the Midwest!

Visit www.midwestsmokeout.com for ticket, vendor and sponsorship information.

Similar to previous years, the Midwest Smoke Out will be accommodating both smokers and non-smokers. 12 premium complimentary cigars will be given to all General Admission ticketholders, and non-smoking tickets will be offered at a lower admission rate. Smok-

MARCH/APRIL 2015 | www.buildingindiana.com

ing will be allowed inside the Celebrity Ballroom of Radisson Star Plaza as well as outside at several of the tented lounge areas.

No other event in the Midwest region brings together more cigar-loving experts and enthusiasts. More than 1,000 people attended last year’s event, which provided the environment for local fans of cigars to mingle with some of the nation’s leading experts in the cigar industry.

One exciting new element coming to the 2015 Midwest Smoke Out is the addition of food pairings to the event’s lineup of gourmet foods and top-shelf alcohols. Complimentary sprits will be paired with selected tastings that will showcase local, national and global flavors. A great deal of anticipation is growing around this new addition, given the Smoke Out’s history of gathering incredible craft beer, liquor, and amazing dining options among its lineup of vendors.

Don’t miss your chance to attend the biggest party of the year. Visit www.midwestsmokeout.com for ticket, vendor and sponsorship information today.

To learn more about room reservations, call the Radisson’s toll-free number at (800)333-3333 or reserve online at Radisson.com. The discount code for room reservations can be found on www.midwestsmokeout.com. Blocks of rooms are available but space is limited.

9

Business Buzz

Northwest American Machine Works, Inc. Moves to Indiana

American Machine Works, Inc., an international machine shop specializing in industrial valve components, recently made the move from Illinois to Indiana, bringing

nine jobs with them. The company was established in 1999 in Lansing, Illinois, and recently built a new ­­­­16,000 square foot facility in Munster, Indiana.

Representatives from the company cited a more favorable tax climate in Indiana as one of the primary reasons for relocating.

American Machine Works refers to itself as a “job shop” machine shop. The company utilizes a variety of CNC and manual machines, and also offers welding and fabricating services, including hardfacing.

They have machine capacities of up to 72

inches. Over the past few years, the company has achieved continued growth due to their commitment to excellence and their rapport with clients throughout the industrial sector.

Company Invests $5 Million in East Chicago Property

Mayor Anthony Copeland and the City of East Chicago announced the purchase of 29 acres at 3600 Michigan Avenue by Chrome, LLC. The company is investing $5 Million in property acquisition, improvements and beautification.

The company is also in final stages of securing an anchor tenant which would be an investment of at least an additional $2 Million with approximately 30 jobs as part of a relocation, additional property improvement and development. Chrome, LLC is also facilitating conversations with workforce development and Ivy Tech to ensure a qualified and skilled local employees.

The Lake County IN Economic Alliance (LCEA), the county economic development group, is extremely pleased with Chrome, LLC’s initial investment and look forward to working with them and the City of East Chicago on additional projects at this site.

Investment Firm Adding 31 Jobs in Chesterton

Lakeside Wealth Management, an investment management firm, announced plans to expand its operations in Chesterton, creating up to 31 new jobs by 2020. The homegrownHoosier company invested $2.64 million to renovate and equip a 13,800 square-foot second floor of an existing office building in Chesterton, which opened in October. The new facility, which includes five client-facing conference rooms, two staff conference rooms, five staff focus rooms and an event space, will allow the company to hold multiple client meetings a day and host events for its clients, staff and the community.

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www.buildingindiana.com | MARCH/APRIL 2015

Drewrys Brewing Company Expanding in South Bend

Drewrys Brewing Company, a recently revived historic beer maker from South Bend, Indiana, has entered into a distribution agreement with Bartholomew County Beverage to serve communities in the Columbus, Indiana region, including Bartholomew and Jackson counties in Indiana.

Now, with several investors already on board, Drewrys has moved forward with its capital raise and plans to expand its reach to customers throughout the Midwest. Investors take an active role in the future of Drewrys as stockholders help to shape and share their visions for the company, which continues its return to Indiana, Michigan and Illinois markets. The classic Drewrys lager should be on the shelves in area stores in plenty of time for the holidays.

B&B Manufacturing Expanding in La Porte

B&B Manufacturing, a producer of custom and standard synchronous drive products including timing belt pulleys, roller chain sprockets and related parts announced plans to expand its operations in the City of La Porte retaining 74 employees and creating 40 new jobs in the State of Indiana. The company has been in operation for over ten years and continues to experience strong growth in the market.

B&B Manufacturing will invest $6.85 million to construct and equip an 80,000 sq. ft. facility on its 52 acre site located in East Gate Industrial Park.

Thermoplastic Manufacturer Investing in South Bend

Chase Plastic Services, Inc., a specialty engineering thermoplastic stocking distributor, announced plans to expand its operations in South Bend, creating up to 14 new jobs by 2017. The Clarkston, Michiganbased company will invest $5.82 million to construct and equip a new 125,000 square-foot facility in South Bend. The facility, which will be fully operational by September 2015, will

NIPSCO Extends Option for Customers to “Go Green”

Northern Indiana Public Service Company (NIPSCO) announced that its Green Power Rate pilot program, which launched in May 2012, has been approved by the Indiana Utility Regulatory Commission as a long term program.

The Green Power Rate program allows residential, commercial and industrial electric customers to designate 25, 50 or 100 percent of their monthly electric usage to be attributed to renewable energy sources.

Commercial and industrial participants also have the flexibility to designate five or ten percent of their monthly usage.

Customers who enroll in the Green Power Program will pay a monthly premium in addition to NIPSCO’s standard electric rate— approximately $2 per month for the average home. The added costs are passed through directly to participating customers with no mark up or financial return for NIPSCO. Currently there are about 940 homes and businesses enrolled in NIPSCO’s Green Power Program.

MARCH/APRIL 2015 | www.buildingindiana.com

11

Business Buzz

allow the company to expand its bulk storage space and enhance packaging and logistics capabilities by doubling its loading dock area.

The Indiana Economic Development Corporation offered Chase Plastic Services, Inc. up to $114,000 in conditional tax credits based on the company’s investment plans.

The city of South Bend approved additional incentives at the request of the Chamber of Commerce of St. Joseph County.

Amazon Supports Benton County Wind Farm

Amazon Web Services, Inc. (AWS), an Amazon.com company, announced that it has teamed with Pattern Energy Group LP (Pattern Development) to support the construction and operation of a 150 megawatt (MW) wind farm in Benton County, Indiana, called the Amazon Web Services Wind Farm (Fowler Ridge). This new wind farm is expected to start generating approximately 500,000 megawatt hours (MWh) of wind power annually as early as January 2016 - or the equivalent of that used by approximately 46,000 US homes in a year.

The energy generated by Amazon Web Services Wind Farm (Fowler Ridge) will be used to help power both current and future AWS Cloud datacenters.

Custom Molding Company Investing in South Bend

South Bend Modern Molding, a manufacturer of custom molded rubber products founded in 1942, plans to make significant investments to expand production capacity and add new product lines at the company’s 100,000 square-foot facility in Mishawaka, nearly doubling employment by creating up to 80 new jobs by 2023. The company, which was named a 2014 Indiana Company to Watch, is currently experiencing exponential growth from its new products using recycled rubber materials, with up to 50 percent of its sales coming from these product lines. South Bend Modern Molding currently employs approximately 100 full-time Indiana associates and plans on expanding employment more than 50 percent over the next three years.

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Faith Always, Action Now Campaign Concludes with $105 Million Raised, Exceeding $80 Million Goal

Saint Mary’s College proudly announced the conclusion of “Faith Always, Action Now,” a comprehensive campaign, which raised a total of $105 million in gifts and pledges - nearly $25 million more than the initial goal. The campaign began in mid-2008 and concluded in December 2014. It is by far the largest fundraising campaign in Saint Mary’s 171-year history of educating women. The campaign will benefit students in a myriad of ways, including: improved science facilities, new research experiences for science students, real-world learning, student-focused faculty, graduate programs, and an enhanced athletic/wellness environment.

Gary Receives HUD Grant

Building on a commitment to help local communities redevelop distressed public or assisted housing and transform neighborhoods, U.S. Housing and Urban Development (HUD) Secretary Julián Castro announced seven new Choice Neighborhoods Planning Grant awards, including $500,000 to the City of Gary, Indiana. These awards will help grantees craft comprehensive, locally driven plans to revitalize and transform distressed neighborhoods.

Part of the Obama Administration’s effort to build Ladders of Opportunity to the middle class, HUD’s Choice Neighborhoods Initiative promotes a comprehensive approach to transforming neighborhoods struggling to address the interconnected challenges of distressed housing, inadequate schools, poor health, high crime, and lack of capital.

Purdue’s Discovery Park Reaches $1 billion Milestone

Purdue’s Discovery Park reached the $1 billion milestone this year for the amount of generated sponsored research, private gifts and endowments. The park is advancing global efforts in areas ranging from energy, cancer treatment, nanotechnology, drug discovery and the environment to health

care, life sciences, and innovative learning in the STEM disciplines of science, technology, engineering and mathematics.

Launched on campus in 2001, Discovery Park has created nearly 150,000 square feet of new research laboratory space and 100,000 square feet of office and meeting space in $200 million worth of new facilities, and another $34 million in new laboratory and research equipment.

The new research and office buildings are the Birck Nanotechnology Center, Bindley Bioscience Center, Mann Hall, Burton D. Morgan Center for Entrepreneurship, and the Hall for Discovery and Learning Research, along with two that opened to researchers this fall - the Drug Discovery Facility and the Bindley Multidisciplinary Cancer Research Facility.

For other Northwest Indiana news items, visit our website at www.buildingindiana.com.

Northeast Fort Wayne Airports Report Record Growth

Passenger traffic at Fort Wayne International Airport (FWA) increased 8.5 percent in 2014, marking the fifth consecutive year of growth for the airport. On the northern side of the city, Smith Field Airport (SMD) also had a record year for general aviation fuel sales.

At FWA, passenger enplanements, or the number of people boarding flights, increased 8.5 percent last year for a total of 324,151, compared to 298,661 in 2013.

Total traffic for the airport, which includes enplanements and deplanements, totaled 643,887 in 2014 compared to 592,943 in 2013, an increase of 8.6 percent.

The airport’s capacity, or number of available outbound seats, increased 12% in 2014 thanks to the addition of new nonstop flights to Philadelphia and Charlotte via American Airlines/US Airways.

Smith Field Airport also experienced record growth last year, where general aviation fuel sales totaled 58,030 gallons, topping 2013’s previous record of 57,586 gallons. The airport had a number of significant improvements in 2014, including the expansion of the taxiway and ramp areas and the main parking lot.

www.buildingindiana.com | MARCH/APRIL 2015

Medical Device Manufacturer Expands in Columbia City

SGS Specialty Group, a contract manufacturer for the development of medical devices, surgical instruments and specialized cutting tools, announced plans to expand its operations, creating up to 17 new jobs by 2019.

The company, previously known as Oak View Tool Company, will invest $773,767 to equip its 9,500 square-foot facility at 724 Swihart St. in Columbia City. As a subsidiary of Munroe Falls, Ohio-based SGS Tool Company, the company anticipates expanding its distribution channel to include opportunities throughout the United States, Canada, Europe, Mexico and China, doubling its business within the next five years.

The Indiana Economic Development Corporation offered Oak View Tool Company, LLC up to $175,000 in conditional tax credits based on the company’s job creation plans. The city of Columbia City approved additional incentives at the request of the Whitley County Economic Development Corporation.

Urban Farm Plan Progressing in Fort Wayne

The Housing and Neighborhood Services (HANDS) Board recommended that the City of Fort Wayne enter into a contract with Growing Minds Educational Services and Urban Grow to operate an urban farm in the Renaissance Pointe neighborhood.

The farm will be located at 2518 Winter St. and will be the City’s pilot site for establishing a template for development of urban farms in Fort Wayne. It is located in a food desert, or an area with very little access to fresh fruits and vegetables.

City plans for the property include the adaptive re-use of former fire station 9, which is located on the site, into a community center with a commercial kitchen and space for a farmers market. Surrounding property will be developed into farmland.

A final contract has not been written, but Growing Minds and Urban Grow propose federal Community Development Block Grant (CDBG) payments of approximately $41,000 in the first year, $31,000 in the second year and $21,000 in the third and final year of the contract. After three years, the organization will be self-sustaining with no payments from CDBG dollars needed.

Major Food Hub Planned for Bluffton

The Bluffton City Council along with Mayor Ted Ellis viewed the first drawings displaying the long-discussed food development and educational facility to be located in Bluffton, IN. This facility, entitled the Bluffton Food Innovation Center, possesses the mission of supporting and growing businesses that add value to agricultural and food products grown and produced throughout the greater Northeast Indiana region.

The City of Bluffton has committed nearly $1 million in funds available through a former USDA grant to the community generated from the closing of a food-related facility several years ago. This fund is currently earmarked as a low-interest loan for economic development efforts.

The Bluffton Food Innovation Center will now aggressively market this strategy and seek additional funding to develop the facility, estimated with equipment and initial operating costs to total $5.5 million. It is anticipated this process could take several years and a phasing of the construction MARCH/APRIL 2015 | www.buildingindiana.com

13

Business Buzz

may be necessary. Wells County Economic Development will lead this aggressive and game-changing effort.

Machining Company Adding Two Facilities in Columbia City

Columbia City based Impact CNC, LLC, a production machining company, announced plans to add two additional facilities, creating up to 80 new jobs by 2018. The company will invest more than $5 million to purchase and equip 35,000 and 50,000-square-foot facilities in Columbia City to provide computer numerical control (CNC) machining services for customers in the automotive, heavy-truck and agricultural industries.

Impact CNC was named an “Indiana Company To Watch” in 2014. The program celebrates high-performing, second-stage companies in the state. Impact CNC already has more than 70 full-time employees at its location in Gateway Industrial Park, which was recently expanded to provide additional office and warehouse space. The Indiana Economic Development Corporation offered Impact CNC, LLC up to $220,000 in conditional tax credits and up to $60,000 in training grants based on the company’s job creation plans.

For other Northeast Indiana news items, visit our website at www.buildingindiana.com.

Central Southeastern Equipment Company Announces Two New Hires

Southeastern Equipment Company the appointment of two new individuals who will be functioning in Indianapolis. Doug Kyle has joined the company as sales representative and Dan Depinet has joined the company as the environmental products specialist for Indiana.

Kyle is selling Kobelco, Bomag, and Kubota equipment throughout numerous Indiana counties, and Depinet is selling Vacall, Schwarze and Aries equipment throughout the state.

14

Allison Transmission Holdings Celebrates 100 Years of Business

Lilly Makes Grant to Hire 300 Teachers

Allison Transmission Holdings Inc. (NYSE: ALSN) announced that it will celebrate its centennial throughout 2015 with a variety of special events and activities.

Allison traces its corporate lineage back to the founding of the Indianapolis Speedway Team Co. on Sept. 14, 1915. As a co-founder of the Indianapolis Motor Speedway and part owner of several racing teams, James A. Allison, a prominent entrepreneur, innovator and businessman, established a precision machine shop and experimental firm on Main Street in Speedway called the Allison Experimental Co. to support his racing endeavors.

Today, Allison Transmission is the world’s largest manufacturer of fully automatic commercial-duty transmissions and a leader in hybrid-propulsion systems. With approximately 2,700 employees and a market presence in more than 80 countries, including manufacturing facilities in the U.S., Hungary and India, the company has annual revenue of approximately $2 billion.

million grant from Lilly Endowment Inc. to

John Morrell Food Group Adding 260 Jobs

John Morrell Food Group, the oldest continuously-operating meat manufacturer in the country, announced plans to locate a distribution center in Greenfield, IN, creating up to 260 new jobs by the end of 2016. The company will invest $43.5 million to build and equip a meat products distribution center, scheduled to begin operations by the end of this year. John Morrell, an independent operating company of Smithfield Foods, has 17 manufacturing facility across the country, including a plant in Peru, Ind.

The Indiana Economic Development Corporation (IEDC) offered John Morrell & Company up to $1,500,000 in conditional tax credits based on the company’s job creation plans. The IEDC will also provide the community with up to $250,000 in infrastructure assistance from the state’s Industrial Development Grant Fund. Hancock County approved additional tax abatement at the request of the Hancock Economic Development Council.

The Mind Trust has received a $3.42

recruit and support 300 talented educators to teach and serve Indianapolis public school students, leaders of The Mind Trust announced.

During the next two years, The Mind Trust will work with the Indianapolis offices of Teach For America (TFA) and TNTP (formerly The New Teacher Project), both national organizations, to recruit teachers and school leaders to Indianapolis’ public schools and provide them with ongoing support.

Sun King’s Second Production Facility Moving Forward

106th Street Partners, LLC recently closed on the sale of 12.76 acres of its Delaware Park commercial development to Indianapolisbased craft beer maker Sun King Brewing Co. Sun King plans to build a second production facility and a tasting room on the Delaware Park property which is located at the southeast corner of Kincaid Drive and Park Central Drive in Fishers. Designs call for up to a 40,000-squarefoot facility which will include the brewery, office and retail space as well as an expansive tasting room. Construction is expected to begin soon with the goal to be brewing at the new facility by this summer.

State Releases New Website to Attract Foreign Business

1InvestIndiana.com, a multi-language website promoting foreign direct investment in Indiana, has launched as a resource for international businesses considering Indiana for investment and job creation.

The website is available in English, Italian, German, French, Chinese and Japanese, targeting private-sector leaders in countries currently experiencing business success in Indiana. Along with information about Indiana’s business climate and workforce, the website highlights locations across the state where international companies have selected Indiana for their U.S. operations. It also includes facts

www.buildingindiana.com | MARCH/APRIL 2015

about thriving Indiana industries and their key companies in the state, ranging from agribusiness to diesel engines.

Last year Governor Mike Pence led four international jobs and economic development missions to Germany, the United Kingdom, Canada and Israel, meeting with company and government officials to celebrate cultural bonds and discuss the advantages of doing business in Indiana. The trips helped propel Indiana to secure deals with 38 international firms last year, which plan to invest $1.3 billion into the state and create more than 2,700 projected new jobs for Hoosiers in the coming years.

square-foot addition and retrofit an 800 squarefoot spray booth at its current 8,784 square-foot facility in Cloverdale.

The facility, which will be fully operational by June 2016, will allow the company to optimize and expand operations and increase production capacity to support growth in the protective coating systems market for the automotive, industrial, military and consumer sectors. The Indiana Economic Development Corporation offered Scorpion Protective Coatings, Inc. up to $150,000 in conditional tax credits based on the company’s job creation plans.

Specialty Coating Study Finds Indiana is Manufacturer a Broadband Leader Investing in Cloverdale More Hoosier households than ever are

Scorpion Protective Coatings, Inc., a manufacturer of specialty coatings, window films and truck bed liner systems, announced plans to expand its headquarters in Cloverdale, IN, creating up to 25 new jobs by 2018. The homegrown Hoosier-company will invest $270,000 to construct and equip a new 2,115

on the verge of having broadband access to Internet, thanks to nearly $5 billion commercial carriers have pumped into infrastructure development over nine years and the easing of state regulations.

Those efforts, coupled with ongoing work to expand fiber optic cable reach, mean

MARCH/APRIL 2015 | www.buildingindiana.com

Indiana is swiftly becoming a regional standardbearer in the ongoing push by state and federal officials to ensure those who live in rural and urban areas alike have reliable and dependable Internet access. Nearly 44 percent of Hoosier households are “passed by fiber” meaning the infrastructure required by a commercial provider is already in place. That number is more than four times greater than the next closest neighbor.

The information comes from research completed by the Digital Policy Institute, a group founded in 2004 at Ball State focusing on issues relevant to digital media. The findings are detailed in the group’s “Indiana Rural Broadband Report 2015.”

Hyatt Regency Indianapolis Acquired

Executives of Davidson Hotels & Resorts, one of the nation’s largest, independent hotel management companies, and Silverpeak Real Estate Partners, a privately held real estate investment manager, announced that its joint venture has acquired the 499-room Hyatt

15

Business Buzz

Regency Indianapolis from Hyatt Hotels Corporation. Davidson, which facilitated the transaction, also will operate the hotel, marking the ninth full-service Hyatt branded hotel the company has managed.

The hotel has undergone significant renovations since 2012. Davidson plans further upgrades to the hotel’s guest rooms and lobby, as well as enhancements to food and beverage outlets and meeting space.

IndyGo Reports Record Passengers

IndyGo’s ridership hit a 23-year peak in 2014, soaring to 10.29M passenger trips with seven individual months hitting highs that had never been seen before. Additionally, 2014 brought several awards to IndyGo for the June Dump the Pump campaign, public engagement exhibit and outreach campaign for the Downtown Transit Center, ROSE Award Lifetime Achievement to Professional Coach Operator Sam Garrison, excellence in financial planning and high marks from the TSA for security preparedness.

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IU Health to Open 12 New Urgent Care Centers

Indiana University Health plans to open 12 urgent care clinics across central Indiana over the next two years. IU Health recently started offering same-day primary care appointments for adults and children, and continues to expand access to expert physicians to meet the need for urgent care in central Indiana.

The new IU Health urgent care clinics will be managed through an exclusive Indiana partnership with Premier Health, an urgent care company specializing in joint ventures and management services, based in Baton Rouge, LA. The first IU Health Urgent Care Clinic is expected to open in 2015, with 12 clinics becoming operational by the end of 2016.

Hamilton County Sees Record-Setting Tourism Numbers

Visitor spending in 2014 as a result of regional advertising initiatives by Hamilton County Tourism, Inc. exceeded $100 million, a 42 percent increase from 2013, according to a research study released by the agency.

Carmel-based Strategic Marketing and Research Insights conducted the annual research study to measure the success of advertising campaigns in influencing travelers to visit Hamilton County. The report revealed visitors spend $225 for every dollar the organization spent on advertising in 2014, as compared to an already record $158 in 2013.

Among all visitor trips to Hamilton County in 2014, about 193,000 household trips can be attributed to the agency’s advertising and promotions efforts, resulting in more than $105 million in visitor spending.

Hoosier Electronic Health Record Company Expanding

Homegrown-Hoosier company iSALUS is a provider of a fully-unified electronic health

www.buildingindiana.com | MARCH/APRIL 2015

records and practice management cloud-based platform. Expanding upon its 15 years of experience in the healthcare industry, iSALUS plans to invest $485,100 to lease and equip its 5,280 square-foot office at the Stutz Business Center in downtown Indianapolis, creating up to 136 high-wage jobs by 2023.

Hiring software engineers and members for its customer service, sales and administrative staffs, iSALUS currently employs 26 full-time Indiana associates and plans to begin hiring next year.

Kite Realty Group Expands Offices

Indianapolis-based Kite Realty Group is a full-service, verticallyintegrated real estate investment trust focused on the ownership, operation, management, leasing, acquisition, construction, redevelopment and development of neighborhood and community shopping centers. Following the company’s merger with Illinois-based Inland Diversified Real Estate Trust earlier this year, Kite Realty plans to invest $205,000, expanding its corporate offices by 5,865 square feet in June and creating up to 69 new jobs by 2018.

Now one of the largest real estate investment trusts in the nation, Kite Realty employs more than 140 associates, with 115 based in Indiana.

Marketing Solutions Company Adding 185 Jobs

An email marketing solutions provider, nimblejack plans to invest $555,000 to lease and equip its current 4,000 square-foot office space in downtown Indianapolis, creating up to 185 new jobs by 2019. Providing consulting, campaign management, automation, custom coding and systems integration and reporting and analytics, nimblejack has locations in New York and Phoenix, Arizona serving customers across the country and was recently presented with the Salesforce Marketing Cloud Services Partner of the Year award.

Probo Medical Creating 62 New Jobs

Indianapolis-based Probo Medical purchases, repairs and resells refurbished medical equipment to the healthcare industry. The company, which launched operations earlier this year, plans to invest $835,000 into its business, creating up to 62 new jobs by 2018. Its north side facility is located at 9855 Crosspoint Blvd. Probo Medical was founded by David Trogden, the former president of Ultra Solutions, a California-based ultrasound equipment business with 55 employees when the company was sold in 2013.

Auto Manufacturer Expanding in Columbus

Impact Forge Group, LLC, a manufacturer of critical safety forged components for the automotive industry, announced plans to expand its operations in Columbus, IN, creating up to 30 new jobs by 2015. The company, which is a subsidiary of Dearborn, Michigan-based HHI Forging, LLC, will invest $7.5 million to install state-of-the-art, German-designed forging equipment into its 138,000 square-foot Columbus facility.

With its new equipment, the company plans to update its forging

MARCH/APRIL 2015 | www.buildingindiana.com

17

Business Buzz

2015

AWARDS BANQUET HONORING EXCELLENCE IN CONSTRUCTION The CAF/NWIBRT Safety Awards honors companies and individuals that exhibit outstanding performance on local construction projects in industries such as construction, safety, and healthcare.

capabilities, increase overall capacity, lower its energy usage and add a third shift to its operations to expand production of components for new eightand nine-speed transmissions. The Indiana Economic Development Corporation offered Impact Forge Group, LLC up to $250,000 in conditional tax credits based on the company’s job creation plans.

Duke Energy Adding More Solar Capacity

Duke Energy has signed 20-year agreements with three solar developers to purchase up to 20 megawatts of solar power for its Indiana customers. The company has filed a request with the Indiana Utility Regulatory Commission to approve the agreements.

Pending regulatory approval, the developers will build and operate four solar panel projects, each producing up to 5 megawatts of electric power. The projects include: • Pastime Farm LLC in Clay County and McDonald Solar LLC in Vigo

County, developed by Solexus Development and Strata Solar • Geres Energy LLC in Howard County, developed by Inovateus Solar • Sullivan Solar LLC in Sullivan County, developed by juwi solar

The projects in Clay, Howard and Vigo counties are expected to provide renewable energy by the end of 2015. The Sullivan County project is expected to provide renewable energy by March 2016.

Indiana Toy Maker Expands to New Markets

Walmart Canada will soon be carrying Greenlight’s authentic die-cast replicas in Spring 2015. Walmart Canada Corp. is the Canadian division of Walmart which is headquartered in Mississauga, Ontario. Total store count is 382, with 148 discount stores and 234 supercenters. Walmart Canada will be stocking some of Greenlight’s most recent releases including Black Bandit, GL Muscle, Motor World, and Fast & Furious series.

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Dow AgroSciences Completes Merger

Dow AgroSciences, a wholly owned subsidiary of The Dow Chemical

Company (NYSE: DOW), has completed the acquisition of Coodetec’s seed business. This acquisition marks the second largest by Dow AgroSciences and is in line with Dow’s plans to expand participation in attractive, high-value growth markets, a key component of the Company’s strategy. The acquisition also expands the Company’s corn and soybean genetics, and strengthens the Company’s breeding and production capabilities in the Americas.

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The conclusion of the Coodetec acquisition also represents a

significant addition to Dow AgroSciences’ soybean capabilities across the Americas, enhancing the Company’s genetics portfolio, operations breeding, and ramp-up of new technologies. It is expected that the current operational structure of Coodetec will be maintained.

For other Central Indiana news items, visit our website at www.buildingindiana.com.

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www.buildingindiana.com | MARCH/APRIL 2015

South Port of Indiana Mount Vernon Breaks Records

The Port of Indiana-Mount Vernon handled 735,000 tons of cargo in December, which was the highest ever single-month total at any of Indiana’s three ports, and also produced the highest fourth-quarter shipments by any port in Ports of Indiana history.

December’s results were 31 percent higher than the previous single-month record set in 1993 and the port’s fourth quarter shipments broke its own quarterly record established in 2013. The port finished 2014 with 4.85 million tons, up 17 percent from 2013 and the highest annual total since 1994. Coal, grain, ethanol, dried distiller grains (DDG) and steel were the dominant cargoes in 2014. The port handled approximately 2,500 barges, 130,000 trucks and 25,000 railcars in 2014.

Southern Indiana Insurer Grows Radius

Old National Insurance (ONI), a subsidiary of Evansville-based Old National Bancorp (Nasdaq:ONB), announced that Mutual Underwriters Insurance in Louisville, Kentucky and ONI have agreed to join forces.

As part of the transaction, current Mutual Underwriters owners, Courtney Ball and Frank Rassiga, will join ONI’s Louisville insurance sales team. Mutual Underwriters Insurance consists primarily of commercial and personal property/casualty accounts. The transaction is structured as an asset purchase and will be effective on Feb. 1. During the transition, the name will continue as “Mutual Underwriters Insurance, a division of Old National Insurance.”

Two Companies Partnering to Expand Jefferson Port Plant

One Southern Indiana (1si) and the City of Jeffersonville announced the intention of Chemtrusion, Inc. and Mytex Polymers US Corp. to expand their facility located at 1403 Port Road in the Port of Indiana - Jeffersonville.

Chemtrusion, Inc. and Mytex Polymers US Corp. jointly developed the Jeffersonville plant beginning in 1995. Chemtrusion, Inc. provides dedicated compounding services to Mytex Polymers at the Jeffersonville plant.

Upon approval of tax abatement by the Jeffersonville City Council, the two companies will invest over $7.5 million to expand the production capacity of the Jeffersonville compounding plant, creating approximately 11 new full-time positions with an additional annual payroll of $436,000. The project would include the removal and relocation of existing equipment, acquisition and installation of new equipment, expansion of rail storage facilities, and expansion of warehouse capacity. This expansion project would increase production capacity by roughly 25 percent, as well as update technologies intended to improve competitiveness. The Indiana Economic Development Corporation has also offered the companies up to $80,000 in Economic Development for a Growing Economy (“EDGE”) conditional tax credits.

For other Southern Indiana news items, visit our website at www.buildingindiana.com.

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People News MEP Construction Management Veteran Joins Miller-Ead’s Executive Leadership Team Thomas Boyd has joined Miller-Eads Electric as a member of their executive leadership team. As Director of Construction Services, Boyd will lead the firm’s estimating and project management divisions. Boyd brings over 25 years of operational and project management expertise to the Miller-Eads Company.

Boyd served in the US Navy and graduated from Purdue University. Most recently, Boyd owned TAM Consulting Group, LLC, a veteran-owned small business, which led construction projects for Citizen’s Energy Group and Johnson Controls’ deployment of new integrated technologies for the New Eskenazi Health Hospital Facility.

Association Veterans Launch Consulting Firm in Indianapolis Senior association executives and marketing veterans, Michelle Boyd and Michelle Travis, launched m2 Performance Strategies, a consulting firm focused on association management, PR and marketing consulting, event planning and community engagement designed to accelerate economic growth. Together, the pair leverage more than 40 combined years of experience working with associations and corporate groups interested in engaging in their corporate communities to spur growth.

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Benjamin Bochnowski Appointed President of the Northwest Indiana Bancorp and Peoples Bank Peoples Bank, and its holding company Northwest Indiana Bancorp, announced the promotion of Benjamin Bochnowski to president and chief operating officer of the locally managed, independent community bank and the Bancorp.

Ben Bochnowski joined Peoples in 2010 and served most recently as executive vice president and chief operating officer. As president and COO, he takes on an expanded role of overseeing day-to-day banking activities as well as coordinating with the Chairman and CEO in the overall administration of the Bank.

Methodist Hospitals Names New Chief Executive Officer The Methodist Hospitals Board of Directors announced that Mr. Raymond Grady has been named President and CEO of Methodist Hospitals.

Mr. Grady has spent the majority of his career at NorthShore University Health System just north of Chicago, where he served as President of the hospitals and clinics division and CEO of The Evanston Hospital, its flagship hospital. Mr. Grady has also served as the Chief Administrative Officer of Aurora Healthcare, a 15-hospital integrated delivery system. He is a fellow of the American College of Healthcare Executives and has chaired the Illinois Hospital Association, The Institute for Diversity and currently serves on the board of the Association of University Programs in Health Administration.

IU Health La Porte, Starke Hospitals name new CNO and CFO Indiana University Health La Porte and Starke hospitals have named Craig Felty, RN, BSN, MBA, CEN, EMT-P, Chief Nursing Officer of both organizations effective immediately. Felty, who also is President of IU Health Starke Hospital, has been serving as Interim CNO since November 2014. Felty brings more than 25 years of patient care and healthcare management experience to the position.

Additionally, the hospitals have named Kevin Higdon Chief Financial Officer effective immediately. Higdon, formerly Vice President of Finance and Information Services for the organization, brings more than 30 years of experience in healthcare finance to the position.

Southeastern Equipment Co., Inc. Names New Director of Service Southeastern Equipment Co., Inc. announced that Jason Milligan has joined the company as the director of service for all locations.

Milligan is overseeing all shop and on-site service to assure customers receive a consistently high level of support at every branch. He earned his MBA from Franklin University, served in the U.S. Army 82nd Airborne Division, and received his undergraduate degree from Ohio Wesleyan University.

Pastoor Appointed as St. Joseph’s College’s 18th President The Saint Joseph’s College Board of Trustees named Dr. Robert

A. Pastoor the College’s 18th president. Pastoor has more than 30 years of experience in higher education administration and comes to SJC from Marietta College of Marietta, Ohio, where he has been the vice president for student life since 2010. His time at Marietta College, the University of San Diego, Carroll College, and Mount St. Mary’s gives Pastoor 20 years of vice presidential experience. Pastoor also served as the president of Saint John’s Catholic Prep from 2005 to 2009.

He has multiple experiences in other areas of college leadership, including fundraising, academic excellence, strategic planning, and financial operations.

Ice Miller Names Reese Office Managing Partner Ice Miller LLP is pleased to announce that Melissa Proffitt Reese will serve as the office managing partner for the Firm’s Indianapolis office. Melissa Proffitt Reese is a partner, former managing partner of the Firm, chairs the Agribusiness Group, co-chairs the Employee Benefits Group, and co-chairs the Firm’s Energy Group.

She has focused her practice in employee benefits, counseling both regional and international clients. In doing so, she advises clients on complex employee benefit matters, including the intricacies of Health Care Reform.

Reese has represented energy, utility and pipeline companies including Citizens Energy Group, Indianapolis Power & Light Company, Energy Systems Group, Inc. and Vectren Corporation with many of their legal needs.

Indiana Subcontractors Association has New President Chip Parsley is the new President of

www.buildingindiana.com | MARCH/APRIL 2015

the Indiana Subcontractors Association. Parsley is Poynter’s Business Development Manager, and has worked for the company since 2005.

Additionally, he served a 5-year apprenticeship with the Sheet Metal Workers Union and graduated from Indiana Wesleyan University with a BA in Business.

Atlas Die Announces CEO Atlas Die, LLC announced the promotion of Scott Daniel to the position of Chief Executive Officer. Daniel has served as President of the company since June of 2014.

Prior to joining Atlas Die, Daniel served as President of Hexacomb Corporation in Buffalo Grove, Illinois. Daniel has an extensive background in senior leadership and operations.

Greene County EDC Names Executive Director The Board of Directors of the Greene County Economic Development Corporation has announced new leadership, appointing longtime GCEDC Community Development lead, Brianne Jerrels, to be Executive Director. Jerrels began her career with GCEDC in January 2008.

She completed her education in economic development through Oklahoma University’s Economic Development Institute (EDI) as well as Ball State University’s Basic Economic Development Course. Jerrels will also serve on the board of Radius Indiana.

Northeast Indiana Regional Partnership Adds Development Director The Northeast Indiana Regional Partnership recently welcomed Kylee Shirey as the organization’s development director. In this new role, Shirey oversees the Partnership’s investor relations. Her responsibilities include engaging and growing the Partnership’s network of investors and stakeholders throughout Northeast Indiana.

Prior to joining the Partnership, Shirey was an attorney with Barrett & McNagny LLP, where she concentrated her practice in the areas of Business and Corporate Law and Securities.

Hamilton County EDC Adds New Staff Member The Hamilton County Economic Development Corporation (HCED) announced a new staff member, Brad Coffing. Stepping into the role of Research Manager, Coffing will create a data center for both business and visitor attraction. Coffing will support both tourism and economic development initiatives through the development, management, and execution of research efforts. Coffing joins the team after working for the Indiana Utility Regulatory Commission (IURC), where he researched and analyzed electric utility cases regarding rate changes, certificates of need and integrated resource planning.

Lilly Names Carroll Senior Vice President of Corporate Business Development Eli Lilly and Company (NYSE: LLY) announced the promotion of Darren J. Carroll to Senior Vice President of Corporate Business Development. During his 18-year career at Lilly, Carroll has helped to lead and/ or created new business models for the company, including e-Lilly, InnoCentive, Lilly Ventures, and Lilly Asia Ventures. He was the driver behind the company’s Capital Funds Portfolio strategy with several venture capital fund managers, which has thus far led to the creation of 11 new companies aimed at developing novel molecules to clinical proof of concept.

MARCH/APRIL 2015 | www.buildingindiana.com

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21

Photo Feature Amazon Opens its First Staffed Store, at Purdue Amazon announced the grand opening of Amazon@Purdue, its

President Daniels (second from left) and Paul Ryder, Amazon Vice President of Media and Student Programs, talk with students and staff inside the Amazon space.

first-ever staffed customer order pickup and drop-off location, housed in the Krach Leadership Center on Purdue University’s West Lafayette campus.

Amazon@Purdue gives Purdue students a convenient, costsaving new option for receiving textbooks and other college essentials from Amazon, as well as a hassle-free way to return textbook rentals and other orders.

This photo shows an overview of the Amazon@Purdue store.

President Obama Visits Ivy Tech, Indianapolis President Barack Obama delivered a town hall speech at Ivy Tech in Indianapolis recently, during which he spoke about budget plans and his goals to provide support and tax relief for middle class citizens. This was the first time in Ivy Tech’s history that a sitting president spoke at one of its campuses.

The event was also significant because of the president’s announcement of the America’s College Promise proposal several weeks prior — which calls for tuition assistance for any community college student that maintains a 2.5 GPA, and demonstrates that they are working toward a credential.

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www.buildingindiana.com | MARCH/APRIL 2015

Influential Women of Northwest Indiana Donates $8,000 to Local Charities

(L to R) Nivia Paredes, with Salvation Army; Rebecca Simmons, with Salvation Army; Laura Mannion, with Franciscan Alliance; Betsy Clark, with Salvation Army; Tony Englert, with Franciscan Alliance; Janelle St. John, with Edgewater Services; Mylinda Cane, with Dunes Learning Center; and Andrea Pearman, Influential Women Event Coordinator.

Influential Women of Northwest Indiana is proud to award $8,000 to four local charities associated with the United Ways serving Lake and Porter Counties.This year’s incredible recipients were: Dunes Learning Center, Edgewater Behavioral Health Services, The Salvation Army, and Franciscan Alliance’s St. Monica Home.

Throughout its history, Influential Women has donated over $50,000 to charities and non-profits that are dedicated to assisting women and children. Each year, the recipients are selected based on their mission and values, and how the funds would be used to empower women and girls. Applications are now being accepted for this year’s non-profit donation recipients. The application is available online at www.nwiwomen.com, and can be submitted electronically or by fax at 219-226-0303.

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State of the Industry

RESPONSIBLE GOVERNMENT, COMMON C SMART FOR BUSINESS RESPONSIB buildingstrongcommunities.org | SMART FOR

Common Construction Wage Protects Market Share and Labor Supply $1.75 • © IBJ MEDIA 2013

Common Construction Wage Protects Businesses from Corporate Tax Increases

CENTRAL INDIANA’S BUSINESS AUTHORITY

• Common construction wage is a de-facto local preference law. It keeps out-of-state contractors from coming in and underbidding local contractors that contribute to their communities.

• Having a ready, local, highly-skilled workforce for projects is critical to finishing projects on time, on budget while keeping the work site safe. It’s much more effective to have a pool of high-skilled workers who do the job right the first time than to pay lower wages for workers who don’t have the right skills and can’t do the job at hand.

• Skilled workers on common construction wage jobs are 15% more productive than less-skilled workers and are key to contractors’ business models. This productivity enables contractors to do high-quality work quickly and move on to the next project, keeping them competitive.

VOL. 34 NO. 15 • OCTOBER 24-30, 2013

Common Construction Wage Protects Market Share and Labor Supply

• Construction workers in common construction wage states contribute 36% more in federal income taxes than workers in states without the law.

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• Without common construction wage, Hoosier construction workers would see their wages reduced by $246 million. Businesses won’t locate to communities where the population can’t financially support them.

COMMON CONSTRUCTION WAGE. GOOD FOR BUSINESS. GOOD FOR TAXPAYERS. When we put local, experienced construction professionals to work and pay them fairly, we get higher-quality projects, a stronger middle class and vibrant local economies. Without common construction wage, not only does the local economy suffer, but so do state taxpayers when millions of state tax

dollars are shipped out of state. Risks of contractor nonperformance and degraded quality increase, and depressed wages mean more full-time workers on public assistance — a tax increase on everyone else.

buildingstrongcommunities.org |

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buildingstrongcommunities.org

www.buildingindiana.com | MARCH/APRIL 2015

RESPONSIBLE RESPONSIBLE GOVERNMENT, GOVERNMENT, SMART FOR BUSINESS COMMON CONSTRUCTION WAGE– SMART FOR BUSINESS RESPONSIBLE GOVERNMENT, $1.75 • © IBJ MEDIA 2013

SMART FOR BUSINESS

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CENTRAL INDIANA’S BUSINESS AUTHORITY

VOL. 34 NO. 15 • OCTOB

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• contribute Better atostronger support them.where the population can’t financially communities • Skilledwages workers on common wagefairly to w • Better wages means a stronger and more fairly distributed taxmore base, helping than policy makers balance stron jobs are 15% productive less-skilled support them. distributed tax base, helping policy makers balance budgets without raising taxes on businesses. workers and are key to contractors’ business stron com models. without This productivity enables to budgets raising taxes oncontractors businesses. com

• Common construction wage is a de-facto local preference law. It keeps out-of-state contractors from coming in and underbidding local contractors that contribute to their communities.

• Having a ready, local, highly-skilled workforce for projects is critical to finishing projects on time, on budget while keeping the work site safe. It’s much more effective to have a pool of high-skilled workers who do the job right the first time than to pay lower wages for workers who don’t have the right skills and can’t do the job at hand.

• Skilled workers on common construction wage jobs are 15% more productive than less-skilled workers and are key to contractors’ business models. This productivity enables contractors to do high-quality work quickly and move on to the next project, keeping them competitive.

• Construction workers in common construction wage

OVER 4000

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C C

OVER OVER

COMMON CONSTRUCTION WAGE. GOOD FOR BUSINESS. GOOD FOR TAXPAYE Common Construction Wage Drives Economic Development

HOOSIER CO

suffe do high-quality work quickly and move on to the Common Wage HOOSIER CONTRACTORS SUPPOR When Construction we put local, experienced construction professionals dollars are shipped out of state.

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• project That’s money spent at do local businesses such aswhen millions suffer, but soat state taxpayers of state tax • Common construction wage jobs support 2,000 Economic Development •Drives That’s money spent local businesses such as restaurants, shopping malls, and grocery stores • restaurants, Every dollaradditional spent onjob amalls, common construction wage shopping and grocery stores – spurring creation that keeps local • Every dollar spent on a common construction wage generates in localstrong. economic activity.

–project spurring additional job creation that keeps local communities and $1.50 businesses generates $1.50 in local economic activity.

••project That’s money spent at local businesses such as communities and businesses strong.

Common construction wage jobs support 2,000 •• That’s money spent at local businesses such as restaurants, shopping malls, and grocery stores Common construction wage jobs support 2,000 non-construction jobs in Indiana. shopping malls, andwage, grocery stores –Without spurring additional job that keeps local non-construction jobs increation Indiana.

•restaurants, common construction Hoosier spurring additional job creation that keeps local communities and businesses strong.

• –Without common construction wage, Hoosier construction workers would see their wages and businesses strong.

• communities Common construction wage jobs support construction workers would see their wages reduced by $246 million.

Businesses won’t2,000 locate to • Common construction wage jobs support 2,000 non-construction jobs in Indiana. reduced by $246 million.

Businesses won’t locate to communities where the population can’t financially jobs Indiana.

• non-construction Without construction wage, Hoosier communities theinpopulation can’t financially supportcommon them.where • Without common construction wage, Hoosier construction workers would see their wages support them. construction workers would see their wages reduced by $246 million.

Businesses won’t locate to reduced by $246 million.

Businesses won’t locate to communities where the population can’t financially communities support them.where the population can’t financially support them.

buildingstrongcommunities.org |

MARCH/APRIL 2015 | www.buildingindiana.com

non-construction jobs in Indiana.

• Without common construction wage, Hoosier construction workers would see their wages reduced by $246 million. Businesses won’t locate to communities where the population can’t financially support them.

COMMON CO

When we put local, e COMMON CONSTRUCTION WAGE. GOOD work and pay them COMMON CONSTRUCTIONtostronger WAGE. GOOD middle class

common construction

COMMON CONSTRUCTION WAGE. GOOD COMMON CONSTRUCTION WAGE. GOOD

When we put local, experienced construction suffer,professionals but so do state When putpay local, experienced construction professionals to workwe and them fairly, we get higher-quality projects, a to work and pay them fairly, we get higher-quality projects, a stronger middle class and vibrant local economies. Without stronger middle class and vibrant local economies.

Without common wage, not only does the local economy When weconstruction put local, experienced construction professionals common construction wage, not only does the local economy When we put local, experienced construction professionals suffer, dothem statefairly, taxpayers millions ofprojects, state tax to workbut andsopay we getwhen higher-quality a suffer, sopay dothem statefairly, taxpayers millions ofprojects, state tax to workbut and we getwhen higher-quality a stronger middle class and vibrant local economies.

Without 25Without stronger class and vibrant local economies. commonmiddle construction wage, not only does the local economy

Fraud:

Rule of Law

No Company Is Immune, but the Risk Can Be Reduced

By James C. Bianchi, CPA, CCIFP, and Jonathan K. Zeiler, CPA, CCIFP, of Crowe Horwath LLP

N

o one likes to think about fraud – especially internal fraud that could be committed by a trusted employee. As uncomfortable as the subject is, however, fraud is a fact of life in all industries. A recent global fraud study conducted by the Association of Certified Fraud Examiners (ACFE) provided some insight into the ways different companies are affected by this issue.

The ACFE’s 2012 “Report to the Nations on Occupational Fraud and Abuse,” which surveyed fraud patterns from 2010 and 2011, suggests that the construction industry is at risk for larger-than-average fraud losses. While industries such as financial services, manufacturing, and healthcare reported more fraud cases, the average size of loss per case was notably high in the construction industry.

Among all 21 industries surveyed, construction posted the third-highest median loss rate: $300,000 per incident. This rate was more than twice the median loss figure for all industries combined.

The survey also revealed that privately held companies generally are more susceptible to certain types of fraud and that smaller

26

companies account for the majority of fraud cases. More than half the fraud cases in the survey occurred at companies with fewer than 1,000 employees.

Recognizing the Conditions That Enable Fraud Criminologists tell us that three conditions generally are necessary for fraud to occur. As Donald Cressey explained in his landmark 1953 book “Other People’s Money: A Study in the Social Psychology of Embezzlement,” these conditions are: 1) Motivation (or pressure). The person who commits fraud generally does so in response to a financial motivation.

2) Opportunity. In many industries, work often is performed at remote locations away from company headquarters, and materials that are difficult to track and can be diverted easily. Poorly designed financial controls can be another factor.

3) Rationalization (or attitude).

Employees who commit fraud do not view themselves as criminals. Instead, they find a way to rationalize their dishonest behavior.

Fraud Risks Just as three general conditions enable fraud, the various types of fraud schemes can be grouped into three broad categories: 1) Theft or misappropriation.

Companies can be particularly vulnerable to theft of materials, but a related risk involves the misappropriation of equipment for personal use.

2) Corruption. This category includes subcontractor kickbacks and other bidrigging schemes, payments to shell companies, fraudulent billing, and substitution of specified products with lesser-quality materials.

3) Financial reporting. Although financial reporting fraud often is associated with publicly traded companies, this type of fraud also can occur in smaller, privately held businesses.

Though not as common as theft or corruption cases, financial reporting fraud can be extremely costly. In the 2012 ACFE global fraud survey, only 8 percent of the cited cases involved financial reporting fraud, but the median loss involved in those cases was $1 million – four times the median loss in corruption cases and more

www.buildingindiana.com | MARCH/APRIL 2015

than eight times the median loss from misappropriation of assets.

Beyond these general categories, some common risks should be of particular concern to companies: • Billing and payment fraud. Billing-related schemes accounted for more than 36 percent of construction industry fraud cases in the ACFE study.

• Kickbacks. A formal bid review process that requires multiple bids can help reduce vulnerability to kickback schemes..

• Manual checks. Some day-to-day on-site costs must be paid at a time that does not fall within the normal disbursement process. Limits on the size of manual checks are a must.

• Payroll fraud. Without proper controls, a project manager or payroll clerk easily can authorize paychecks to a “ghost” employee and deposit the funds into a personal account.

• Vendor or supplier fraud. Unscrupulous suppliers and subcontractors can falsify information on invoices or payment applications to generate greater costs.

Steps to Reduce the Threat A proactive anti-fraud program will address all three of the conditions that enable fraud, with particular emphasis on the second element – opportunity. Several important principles should guide the effort: • Tone at the top. Company management must visibly demonstrate its commitment to ethical behavior in all aspects of the business.

• Employee involvement. Alert employees to the most common fraud schemes and the red flags they should watch for.

• Fraud hotline. Establish a tip line or another way for employees to anonymously report concerns. In 2012, 43 percent of all fraud cases came to light as the result of tips, and more than half of those tips came from suspicious employees.

• Segregation of duties. The authority for collecting cash, depositing receipts, disbursing funds, and recording and reconciling accounts must be spread among a number of people, with clear requirements for documentation and accountability.

• Internal controls. In addition to establishing strong internal controls, management must insist that these controls be applied consistently.

• Management involvement. Company owners and senior managers must be involved personally – in ways that are not always predictable.

Such steps are just the beginning – a starting point. Although it is impossible to eliminate completely the possibility of fraud, a strong, thorough, and consistent anti-fraud program can significantly mitigate the risk. With the median loss in construction industry fraud cases standing at $300,000, no company – whether large and sophisticated or small and closeknit – can afford to be complacent.

2015 Summer Conference Network with Economic Development leaders throughout the entire state of Indiana.

“Report to the Nations on Occupational Fraud and Abuse,” ACFE, 2012, www.acfe.com/uploadedFiles/ACFE_Website/Content/rttn/2012-report-to-nations.pdf, pp. 28-29.

Ibid, p. 26. A summary of Cressey’s book can be found at https://theturnaroundauthority.wordpress. com/tag/ther-peoples-money-a-study-in-social-psychology-of-embezzlement “Report to the Nations,” p. 11. Ibid, p. 31. bid, pp. 14 and 16.

For continued updates on this topic and others like it, visit our website at www.buildingindiana.com.

MARCH/APRIL 2015 | www.buildingindiana.com

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

Thursday, June 18, through Friday, June 19 in Lawrenceburg, IN See www.ieda.org/wp for more details.

27

Safety Zone

Standing Down for Construction Safety

By: The American Society of Safety Engineers (ASSE)

A

ccording to the U.S. Occupational Safety and Health Administration (OSHA), more than 3,500 workers in the U.S. have died from falls over the past 10 years. The statistics are even more troubling in the construction industry, where falls account for more than one-third of work-related deaths each year.

The hazards of falling from height are well known, yet lack of proper fall protection has long topped OSHA’s annual list of most frequently cited regulatory violations.

To bring attention to this pervasive problem and build awareness of proven solutions, OSHA is again partnering with National Institute for Occupational Safety and Health (NIOSH), The Center for Construction Research and Training (CPWR), American Society of Safety Engineers (ASSE) and others to hold the second Fall Safety Stand-Down May 4 - 15, 2015.

“With the economy on the rebound and

28

housing starts on the rise, now is the time for all of us to renew our commitment to sending workers home safely every night,” says Secretary of Labor Thomas Perez.

“Responsible employers understand that safety is not a luxury, it is a necessity.”

Adds NIOSH Director John Howard, “The Stand-Down serves as an important opportunity for work sites to recognize the hazards

“With the economy on the rebound and housing starts on the rise, now is the time for all of us to renew our commitment to sending workers home safely every night,” Thomas Perez, Secretary of Labor

that cause those falls, and train employers and workers how to avoid them so that these tragedies can be prevented once and for all.”

What Is a Safety Stand-Down?

A safety stand-down is a voluntary event that offers employers a dedicated opportunity to talk directly to employees about safety.

Essentially, everyone on a site stops work and actively engages in discussing effective ways to work safely.

As one participant from the 2014 StandDown explains, “It allows everyone to take an extra moment to come together for discussion about safety. We practice it daily as a crew, but when everyone is forced to stop what they are doing to discuss the importance of safety, it seems to take on a larger impact.”

OSHA’s first National Safety Stand-Down to Prevent Falls in Construction in 2014 reportedly reached more than 1 million workers and thousands of employers. Activities ranged from handing out brochures and fact sheets to videos, quizzes and T-shirts, and common events included toolbox talks, equipment inspections and fall protection demonstrations.

www.buildingindiana.com | MARCH/APRIL 2015

“Almost 5,000 stand-downs were reported in all 50 states and internationally,” the agency says, adding that its Susan Harwood Training Grantees trained more than 105,000 workers and employers on fall hazards during the 2014 observance.

While the construction industry is the primary target of the observance, OSHA says it issued nearly 15% of its stand-down certificates to non-construction employers. As one 2014 participant reflects, “Technically, we are general industry and are not exposed to most of the fall hazards you may encounter on construction sites, but it was a great exercise to just bring awareness.”

For 2015, the stand-down has been extended to two weeks. OSHA is hoping for more than 20,000 stand-downs, which the agency estimates would reach 3 million workers—or four out of every10 construction

OSHA’s first National Safety Stand-Down to Prevent Falls in Construction in 2014 reportedly reached more than 1 million workers and thousands of employers. workers in the U.S.--with the important message of avoiding fall hazards.

“Given the tremendous response we have received, it is clear that this is an important issue to a great number of people across this nation,” says Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “We are so pleased to work toward preventing these tragedies through innovative and collaborative efforts like the Safety Stand-Down.”

Industry groups such as ASSE have been strong supporters of OSHA’s efforts to stop preventable falls on the job. The Society has been part of the agency’s Plan-Prevent-Train campaign, which the agency launched in 2012, and is working with OSHA to promote the 2015 Stand-Down among its 37,000 occupational safety professional members, many of whom deal firsthand with fall protection programs each day.

“As the economy continues to grow and the need for construction workers increases, we hope the Stand-Down will remind employers and workers that fall prevention is an important part of every workplace safety plan,” says 2014-15 ASSE President Patricia M. Ennis, CSP, ARM. “We urge all of our members to use this opportunity to reach out to employers in every industry to create safer work environments by participating in this year’s Stand-Down and continuing to help prevent workplace fatalities, injuries and illnesses.”

As secretariat of the American National Standards Institute (ANSI) Z359 Accredited Standards Committee that oversees the widely used Z359 Fall Protection Code, ASSE has a long history of interest in preventing work-related falls. The Fall Protection Code is a series of more than 10 national consensus standards that offer employers an overall blueprint for preventing falls from heights. To help employers build their knowledge of preventive measures, ASSE offers the first standard in the series, ANSI/ASSE Z359.0-2012, Definitions and Nomenclature Used for Fall Protection and Fall Arrest, as a free download on its website.

The 2015 Stand-Down coincides with ASSE’s 2015 North American Occupational Safety and Health Week, May 3-9, and the National Construction Industry Safety Week, May 4-8.

MARCH/APRIL 2015 | www.buildingindiana.com

29

Bottom Line

The Only Constant to any Business or Family can Count on is Change

The “Processing of Your Money” $2,000,000 Average Lifetime Income

By: Jim Sandrick, Sandrick Financial Group, LLC

T

he economic and social changes that we face in today’s world have become second only to the Great Depression. Hundreds of banks have closed or merged into fewer, but larger, financial institutions that historically provided a “safe haven for your life savings.”

People who chose bank CD’s to protect and grow their Traditional IRA accounts years ago are awakened by the reality that the government, which has only allowed minimum growth, is now forcing seniors to take Required Minimum Distributions each year that are greater than their annual CD growth. This will rapidly diminish the money these seniors thought they could count on for the rest of their lives. Pensions, not IRA’s, provide guaranteed lifetime income.

Employers who provided life, health and disability insurance as well as a lifetime guaranteed income once retired have diminished as well.

Author John Tyner proposed the question, “Where can assets be placed that provide safety and security in uncertain times?” The answer lies in life insurance companies. The Legal Reserve System was created to make sure that life insurance carriers put away enough reserves to take on all of their prospective claims. Dissimilar to banks, which might only be obligated to have 10% of its assets in reserves, life insurers, are mandated to keep as much as 90% of their assets in reserves.

Legal Reserve Life Insurance companies had their strongest showing during the Great Depression.

Thousands of banks closed while the overwhelming majority of life insurance companies kept their doors open. No insurance client lost their life insurance, plus it was the Insurance Companies that ultimately bailed out the banks. That same strength will con-

30

Living Expenses, Debt,Taxes

3% Saved

$60,000 Average Total Assets at Age 65 www.buildingindiana.com | MARCH/APRIL 2015

tinue because the same laws are in effect today, designed to protect and grow businesses and families who own life insurance. These were whole life policies that are just as valuable today.

Also, during the Great Depression, life insurance companies offering annuities kept many people’s financial lives intact under the same law. Baseball legend Babe Ruth invested 100% of his money in annuities and never worried about losing money, and he didn’t.

Allow yourself to really think about what is on the horizon. Below are a few topics that will affect business owners, their families, employees and their families.

• The increasing numbers of grandparents raising their grandchildren are faced with emotional, social, financial, and legal challenges at a time when their parenting days seemed to be over.

• Social Security may need to be reduced by 25% to maintain social security benefits while health care costs are predicted to eventually overtake Social Security benefits.

• The same tools that were available during the Great Depression are available today, but are consistently portrayed as “the dark side of the force.” The AM Radio money talk shows are generally geared toward investments. They make it a point to put insurance as the last thing you would want to consider, especially annuities. But the annuity they discourage, with high fees and risk of loss, are the ones they themselves offer -- variables. When all is said and done, annuities offer the maximum degree of security of any investment.

“Insurance as Solutions Education Workshops” focus on reduction of debt, taxes and credit card interest. You have a choice of a dividend paying Whole life or Fixed Index Life contract. Making these changes can improve your life as you age, retire, need or provide homecare. Structured properly, money in these policies is free of any Federal or State Income tax. With Fixed Index Annuities you can have pension-like benefits which can include inflation protection or additional income for a period of time to provide for additional costs of home or facility care.

MARCH/APRIL 2015 | www.buildingindiana.com

Making the change to safe insurance solutions will definitely improve your business or family’s financial security.

Outpace emotional or societal issues with the powerful, successful tools the insurance industry provides. One of the key rules of investing is “don’t lose money while you are participating in the growth of the market.” With a Fixed Index Annuity you will be making money whether the market goes up or down. Annual gains are locked-in, a similar effect to “selling high,” while the annual reset has a similar effect as “buying low.”

One of Indiana’s greatest coaches, Bobby Knight, once said, “As his team prepares, a coach’s entire being must be concentrated on winning games.” If you are a business owner, in order to be successful you know this as “It is important to work on your business, not in your business.”

So ask yourself, are you doing everything you can to make your business increasingly successful? What if there was one business tax savings idea, one business asset protection idea, or one cash flow efficiency ideal that you could implement to make your business 10%-20% more profitable, would you want to learn more?

31

Small Business

What Can You Do with an SBA Loan?

Small Business Loans Present Companies with Limitless Options

By Nick Dmitrovich

F

ifty percent of America’s workforce is employed by companies with fewer than 500 employees – making small businesses the underrated backbone of the American economy.

Forty-four percent of the nation’s payroll and two-thirds of all new jobs created each year are generated by small businesses, and these companies are about as diverse as one could possibly imagine. From tiny “mom and pop” stores to industrial manufacturing companies, small businesses consist of a wide array of different companies that serve an even more diverse client base - and each one of these small businesses has unique needs.

Across all of the specialized circumstances that small businesses find themselves in, one thing remains consistently evident: Small Business Administration (SBA) loans carry the ability to bring growth potential to each one, regardless of type or industry. No one knows

32

that better than the certified developers at the Regional Development Company (RDC).

Throughout its 20+ year history, the RDC has seen small companies of all shapes and sizes take advantage of SBA loans to grow their unique operations. Whether it’s through the purchase of new equipment, new facilities, acquisitions or renovations, SBA 504 loans can help any type of small business satisfy its own exclusive needs.

“I’m still surprised by all of the different things that companies have used 504 loans for, you wouldn’t believe how many different projects we’ve helped people bring to life over the years,” said Erica Dombey, President and Executive Director of the RDC. “Just to name a few, we’ve seen 504 loans used to finance funeral homes, cemeteries, golf courses, soybean farms, fitness clubs, sporting complexes, breweries, car dealerships, slaughter houses, gas stations, hotels, liquor stores, doctor and dental offices, assisted living facili-

ties, chicken farms, numerous manufacturing facilities and restaurants, and so much more.

It’s been amazing,” she said.

SBA 504 loans can finance any hard asset, such as the purchase of real estate, purchase of land, construction of a new building, purchase and renovation of an existing building, and purchase of new equipment (the RDC even helped finance an MRI machine once).

“As long as there is owner occupied commercial real estate involved, the loan can include ALL the costs, including appraisals, architectural costs, surveys, furniture, office equipment, phones, security systems, landscaping, anything involved in the real estate,” Dombey said.

“The SBA 504 loan is a great tool to help growing small businesses,” said Niccole Zell, Vice President of Lending with the RDC. “Several small businesses have come back to the RDC a few years after the initial 504 loan to finance building additions, to increase space,

www.buildingindiana.com | MARCH/APRIL 2015

or to purchase new equipment to expand product lines.

The RDC helped one machine tool shop grow by financing the construction of a new building when the company outgrew its location. A few years later the company came back to the RDC to help finance an addition to the building to accommodate the growth of sales the company was experiencing. A few years later they were back at the RDC again! That machine tool shop ended up with a total of five

One in three small businesses that received credit in the first half of 2014, received that credit in the form of an SBA loan

ny looking for initial capital, or an experienced business looking to grow its operations, the SBA 7(a) loan program can be used for everything from working capital and operating expenses, to purchase inventory, to acquire another business and even for accounts receivable lines of credit.

SBA 7(a) loans are administered through banks and are a great option for loan requests that need additional collateral support. The SBA provides a guarantee to the bank for a portion of the loan amount, which makes the bank more likely to approve the loan and gives more security to the bank in the event that the borrower defaults.

In the end, it all comes down to one thing: helping small businesses – a vital component of the American economy – find the right pathways for continued growth.

If you’re a small business owner with dreams of expansion, or a new product line, or other business goals, make an appointment to discuss these ideas with your local financial institution or the experts at the Regional Development Company. Learning that your dreams can very likely become reality may just surprise you.

Source: Joint Small Business Credit Survey Report, 2014. Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia

504 loans over a 10 year time span.”

“The variety of business that have utilized the SBA 504 loan is remarkable. The RDC has helped companies like a coffee bean roaster, a spice manufacturer, several beauty salons and even a grocery store,” she added.

SBA 504 loans are administered by Certified Development Companies like the RDC, who partners with local financial institutions. One of the greatest benefits of 504s are low down payments they require, which enables business owners to retain their cash for other associated expansion needs, such as increased payroll, inventory, and working capital. SBA 504 loans offer long-term, low-fixed interest-rate financing for all of a company’s hard asset needs. In most cases, a bank will finance the first 50 percent of the project costs, the RDC finances the next 40 percent, and the borrower provides a 10 percent down payment.

With just 10 percent required up front, most small businesses find that their particular plans for growth or expansion are more readily obtainable than previously thought. And yet, there are still numerous other ways in which SBA loans can assist small companies with more than just hard assets.

SBA loans differ from typical bank loans in several key ways, many of which are advantageous for small companies.

As Dombey explained, traditional bank loans often require a 25 percent down payment on commercial real estate purchases, and many small businesses do not have access to a sufficient level of capital to fund the projects they are hoping to complete. Other businesses need a line of credit to fund the purchase of inventory or to carry their accounts receivable.

Banks do not assign a high value to these items as collateral for loans, so requests for credit are often denied for that reason.

This is exactly the point at which SBA loans can really step in and help, beyond the hard assets that 504 loans are used to purchase. Regardless of whether it’s a start-up compa-

MARCH/APRIL 2015 | www.buildingindiana.com

When planning your company’s next major project, reach out to the Regional Development Company for expert advice on how 504 loans can help you achieve your business goals.

33

Cover Story

Beer Money Indiana Alcohol Producers are Brewing Up Economic Development

By Nick Dmitrovich

34

I

ndiana is lauded as a manufacturing intensive state. Everything from automotive components, to aerospace technologies, medical devices, and agricultural innovations are produced right here within Hoosier boarders. These incredible industries, specifically the ones in science and technology, receive lots of attention and numerous accolades each year for their achievements throughout the state’s business news stream. But there’s another, often overlooked and certainly much more “spirited,” Indiana-made product that has been continually gaining new ground over the last decade with increased demand – Indiana alcohol production.

Today, Indiana’s breweries, wineries and distilleries are recognized as some of the top-shelf producers of their respective beverages from every corner of the United States. And, perhaps most importantly, the rise of smaller operations has helped generate new and exciting economic development opportunities and job creation in almost every Indiana city.

“Hoosier manufacturing doesn’t stop at auto parts,” said Eric Doden, President of the Indiana Economic Development Corporation. “Growth is brewing for craft alcohol producers around the state, in turn supporting growth and quality of place development across Indiana’s communities and regions.”

www.buildingindiana.com | MARCH/APRIL 2015

Indiana Beers – On the Rise

The craft beer market in Indiana has nearly doubled in size over the past few years. In terms of job creation, Indiana’s breweries have increased in size exponentially. Among the largest brewers in the state, Sun King Brewery, in Indianapolis, went from 5 full-time employees at the end of 2009 to 58 full-time employees at the end of 2014, plus over 60 part-time employees. Upland Brewery, in Carmel, employs 75 full-time and 65 part-time workers.

Three Floyds Brewery, in Munster, is the largest brewer in the state. Their brewpub is a draw for beer tourists from all over the world, and they currently employ 66 full-time employees in Indiana and 17 part-time workers.

When the remaining 95+ breweries in Indiana are tallied, upwards of two thousand jobs have been created across the state.

The craft industry in Indiana had an estimated economic impact of $609 million in 2013 (the most current data available). But it is important to remember that in 2013 there were 57 small breweries in the state, which has nearly doubled as of today, to 100.

Indiana has gone from a “fly over state”

in craft beer to a “destination state” bringing a large agri-tourism industry to fruition.

Tristan Schmid, Communications Director with the Brewers of Indiana Guild, provided some insight into projections for the future of Indiana’s beer industry.

Number of Alcohol Production Licenses in Indiana, by Type

•

•

•

•

•

•

•

Artisan Distillers = 9 Distillers = 10 Small Breweries = 118 Wine Vintner = 1 Farm Wineries = 121 Farm Winery, Brandy Distiller = 1 Additionally, there are thousands of other wholesale, retail, and vendor licenses.

Source: Indiana Alcohol and Tobacco Commission, Nov. 2014

“There is room for growth in the craft beer industry on every end of the spectrum: There are still plenty of small towns in Indiana that do not have a brewery but could easily have one. We’ve seen numerous town squares

and basically abandoned areas begin to be revitalized in large part thanks to the jobs and patrons that breweries attract,” Schmid said.

“On the other end of the spectrum, there’s a lot of room for more production breweries like Three Floyds, Sun King and Upland; the more these bigger craft beer brands can find their way into bars, restaurants, and grocery stores, the more likely the average beer consumer will be to discover them and begin purchasing instead of macro beers like Coors or PBR,” he added.

“Last but not least, the craft brewing industry in Indiana truly offers the opportunity to enhance Indiana’s image as a destination state for fine beer,” Schmid continued. “Three Floyds is known worldwide, and breweries like Flat12 in Indianapolis attract people from across the world who come to Indianapolis for conferences or major sporting events.”

Developing alcohol and agri-business tourism in the near future is a major goal of the Brewers of Indiana Guild.

Schmid said, “With an eye on further developing the tourism industry in Indiana, we’re working on an Indiana Craft Beer Trail which will reward people for visiting breweries all

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35

Cover Story

across the state. We’re looking forward to developing this with the help of local convention and visitors associations and media.”

With increased demand, and newly acquired national attention, new breweries are beginning to open their doors throughout the state. William Kerr and Jason Phillips are two individuals who will be making their debut in Indiana’s brewing industry this year. The pair will be opening The Guardian Brewing Company this summer in Muncie, IN. “We are aiming for a July 4th, 2015 opening,” Kerr said. “We have our brewers notice

well people enjoy your product.”

The new brewers chose to locate The Guardian in their hometown of Muncie due to the strong craft beer following in the area.

Kerr cited several reasons why the partners felt that now was the right time to get into the brewing industry.

“Jason and I love drinking a good craft beer,” Kerr said. “Sometimes it gets expensive, so we started making our own about eight years ago. We found that we can make beers just as well, and in some cases better, than some of the big brewers for a lot less money.”

…And let’s not forget the wine.

In addition to its breweries, Indiana also receives a tremendous amount of economic benefits from the wine industry throughout the state. As of today there are 78 wineries across the state, with over 1,000 total jobs supported by their operations. According to a recent analysis by John Dunham and Associates, New York-based economic research group, Indiana’s wineries generate an economic impact of more than $3 billion annually.

“Indiana wineries not only bring jobs to the state, but they bring visitors,” said Jeanette Merritt, Marketing Director for the Indiana Wine Grape Council and the Purdue Wine Grape Team. “Our wineries attract over 2 million visitors a year. Each of those visitors not only visit the wineries, but other attractions in those communities. That is providing a positive economic impact to communities that need those visitor dollars to grow.”

through the Alcohol Tobacco Tax and Trade Bureau (TTB), so the next step is getting state approval through the Alcohol and Tobacco Commission (ATC). Our building/operation needs to be 99% complete before we get approval. We won’t be ready for several months, as we are still in demolition / construction phase, but we will order our equipment at the end of February or early March.”

The Guardian will be a small batch brewery, operating on a 3.5 barrel system (3.5 bbl).

In the beginning it will only be creating up to four jobs for the Muncie area, but the owners have aspirations for growth.

“If things go well for us then we will definitely be hiring more,” Kerr said. “You never really know until you get started and see how

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“When you can make great beer, it’s almost addicting. We were always trying different combinations and it’s always fascinating to discover how the slightest change to a recipe could change the flavor of your beer. We were constantly making upgrades to our starter 5 gallon system. Eventually we built a fully automated, 30 gallon electric brewery from the ground up. You can actually run it from a laptop or tablet. When we got to this point, we started thinking, maybe we can go bigger and start our own spot,” he said.

“Jason is a CPA, and I am an engineer so we have a good mix of the skills needed to start a business,” Kerr added. “Muncie is a great town, and this town is doing great things. The location is primed for a quality brewery.”

Facts about Indiana Wineries, and their Impact on our Economy

•

•

•

•

•

•

Indiana is home to 78 wineries These wineries are in 45 of Indiana’s 92 counties and attract over two million visitors per year Between five and ten new wineries are typically added each year Indiana produces roughly 1.3 million gallons of wine annually Together, Indiana wineries employ approximately 1,000 Hoosiers Indiana has over 650 acres of vineyards that generate over $15 million dollars in retail value to the state’s economy

Source: Indiana Senate Republicans

Brown County, IN, is a hub for wine production as well as other alcohols. Over the past few years, this part of the state has seen growing interest, increased tourism, and continued investment taking place due to increased demand from craft and artisan alcohol enthusiasts.

Aubrey Sitzman, Public Relations Coordinator with the Brown County Convention and Visitors Bureau, said, “Alcohol production seems to be growing in Brown County and is an attraction for many visitors and locals. With all of our producers offering tours, tastings, or

www.buildingindiana.com | MARCH/APRIL 2015

ers to being true craftsmen in their trade.”

“Just within the last four years here in Brown County, we have added one brewery (Big Woods Brewery), one new winery (Cedar Creek Winery) to go along with our other two (Brown County Winery and Chateau Thomas Winery), as well as a distillery (Bear Wallow Distillery), which is one of the first craft distilleries in Indiana,” Sitzman added. “We are seeing growth in both interest and the establishment of producers.”

A Sample of some of the Best Wineries and Breweries in Indiana

both, they are definitely a draw for visitors and have had an impact on the local economy. Additionally, our producers here really embrace and continue to honor Brown County’s “handmade” heritage, taking their profession to the next level from merely being alcohol produc-

• • • • • • • • • • •

MARCH/APRIL 2015 | www.buildingindiana.com

Big Woods Brewing Company, Nashville Blue Heron Vineyard, Cannelton Brugge Brasserie, Indianapolis Chateau Pomije, Guilford Coal Creek Cellars Winery, Crawfordsville Indian Trail Wines, Royal Center Country Heritage Winery, LaOtto Mad Anthony Brewing Company, Fort Wayne Mallow Run Winery, Bargersville Monkey Hollow Winery, Saint Meinrad New Day Craft, Indianapolis

• • • • • • • •

Oliver Winery, Bloomington Shoreline Brewery & Restaurant, Michigan City Thomas Family Winery, Madison Three Floyds Brewing Co., Munster Tomlinson Tap Room, Indianapolis Upland Brewing Company, Bloomington Whyte Horse Winery, Monticello Wildcat Creek Winery, Lafayette

Source: Honest to Goodness Indiana, IN.gov

The Future Looks Bright Each passing year only seems to bring increased demand for new craft and artisan alcohols, which carries the potential for continued growth for Indiana’s producers. As the public’s taste for spirits broadens, more opportunities arise for small operations to stand out among the crowd, and new avenues of economic activity begin to form. One thing is for sure, if the past few years are any indication, the future certainly looks bright for Indiana’s alcohol industry.

For continued updates on this topic and others like it, visit our website at www.buildingindiana.com.

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Finance

2015 Facts & Stats

S

Median Household Incomes, by State Banks with the Most Branches in Indiana PMorgan Chase Bank PNC Bank

Old National Bank Fifth Third Bank

First Merchants Bank First Financial Bank

193 branches 144 branches 139 branches 134 branches 94 branches 79 branches

Source: US Bank Locations

Stats from the State: Highlights from 2014 Indiana Governor Pence’s office released a 2014 progress report with a collection of the state’s best stats from the last twelve months, including: •

•

•

•

•

•

•

•

$185 million in tax relief for job creators, including reduction in corporate tax and financial institution tax 36% additional reduction over 2013 in the number of regulations thanks to the ongoing Cut Red Tape initiative Successful international trade missions to Germany, the United Kingdom and Canada by the governor, as well as many other trips made by regional leaders Unemployment down to 5.7% as of October 2014 Rated 1st in the Midwest and 6th in the nation as a “best place to do business”

by Chief Executive magazine Rated 1st in the nation for spending transparency according to the U.S. Public Interest Research Group Education Fund Rated 1st in the Midwest and 8th in the nation for business tax climate by the Tax Foundation Maintained its AAA rating from all three major credit rating agencies

Source: Office of Governor Michael Pence, Indiana

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5.7%

Indiana

$50,553

Illinois

$57,196

Michigan

$46,398

Ohio

$46,398

Kentucky

$42,158

United States

$51,939

Source: Census Bureau, annual household income report for 2013, released Sept. 2014

Cost of Living Comparing Indianapolis to Other U.S. Cities • Housings costs in New York City (Brooklyn) are 279% higher than Indianapolis.

• Grocery costs are 14% higher in Los Angles

(Long Beach) than in Indianapolis.

•

Utility bills are about 6% higher in Chicago than they are in Indianapolis.

•

•

Transportation costs are about 36% higher in New York City (Brooklyn) than Indianapolis.

Healthcare costs are about 9% less in Orlando than Indianapolis.

6%

Source: CNN Money’s Cost of Living Calculator, results depict cost of items in other cities relative to Indianapolis

Did you know?

Indiana’s homeownership rate is 70%, which is above the national average of 64.9%.

Source: Census Bureau, annual household income report for 2013, released Sept. 2014

70%

Indiana’s S&P Bond Rating: AAA Source: IEDC

More than 700 companies, from 31 countries, have invested in Indiana.

Source: IEDC

Indiana’s GDP of more than $294 billion in 2013 ranked its economy 16th largest among the states.

Source: Indianapolis Star, Aug. 2014

Some National Stats on Credit Cards Total U.S. credit card debt in 2014… $793.1 billion.

Average credit card debt per household… $15,799.

Average balance per open credit card… $1,157.

Source: Federal Reserve, Join Economic Committee, Sallie Mae, TransUnion

www.buildingindiana.com | MARCH/APRIL 2015

Indiana Cities with the Highest Monthly Apartment Rent 10. Kokomo - Average rent: $574.

9. Anderson - Average rent: $580.

8. Fort Wayne - Average rent: $603.

7. Evansville - Average rent: $637.

6. South Bend - Average rent: $673.

5. Indianapolis - Average rent: $738.

4. Muncie - Average rent: $741.

3. Lafayette - Average rent: $789.

2. Columbus - Average rent: $821.

1. Bloomington - Average rent: $894.

Nice Crib The most expensive home currently for sale in Indiana is in Carmel. The $25 million property boasts 7 beds, 24 baths, and 51,267 square feet of space.

Source: Zillow

Source: The Indianapolis Star, 2015

Final Quarter Job Generation Indiana added 15,800 private sector jobs in November of 2014, which was the largest one-month gain in 15 years.

Source: IEDC

Facts about Hoosier Property Taxes Indiana has one of the lowest median property tax rates in the United States, with only ten states collecting a lower median property tax than Indiana.

The median property tax in Indiana is $1,051.00 per year for a home worth the median value of $123,100.00.

Counties in Indiana collect an average of 0.85% of a property’s assessed fair market value as property tax per year.

Source: Tax-Rates.org

79% of Guests Have Been Disappointed with Food At An Event.* Don’t Make the Same Mistake.

Find the Best on NWI’s ONLY Meetings & Events Resource Guide at www.BuildingIndiana.com. *Warwick Conferences

MARCH/APRIL 2015 | www.buildingindiana.com

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www.buildingindiana.com | MARCH/APRIL 2015

CONCERNED FOR TOMORROW

Mass Production

The 2014 Indiana Manufacturing Survey, now in its 8th year, reveals Indiana manufacturing is in better shape today than at any other time in the last decade. However, future growth could be threatened by regulatory, tax and energy costs.

ECONOMIC OUTLOOK

78%

predict growth in the next two years

2014

Great Things Are On The Horizon Indiana’s Manufacturers and Builders are Predicting Growth

By Nick Dmitrovich

I

t’s an exciting time for business in Indiana. All throughout our state, companies are reporting some very optimistic outlooks for the coming months, and many are predicting some outstanding growth potential. With specific regard to the manufacturing and construction industries, recent market surveys and industry reports are reflecting some very inspiring concepts.

The “2014 Indiana Manufacturing Survey” was recently released as part of an annual collaborative effort between the Indianapolis accounting firm Katz, Sapper & Miller, Indiana University’s Kelley School of Business, the Indiana Manufacturers Association, and Conexus Indiana – each of which serve as an independent hub for Indiana business information.

The 200+ companies from around Indiana that responded to the survey represented a balanced assortment of various manufacturing industries; including industrial equipment (20%), automotive (18%), and aerospace and defense (9%). An additional 20% of the respondents were distributed among high-tech (5%), healthcare (4%), furniture/home goods (5%) and food/beverage (6%), and the remaining 25% of companies in the “other” category consisted of energy/power companies, construction and publishing, agriculture equipment and recreational vehicles (RVs).

One key finding of the report stated that, “In terms of the overall economic outlook, this survey’s results suggest that Hoosier manufacturers are more upbeat about Indiana’s prospects versus the nation as a whole.”

Just a few years ago, in the middle of the Great Recession, nearly half (47%) of the respondents to the 2009–10 survey stated that they would use the term “challenged” to describe their performance, with 30% reporting “stable,” and only 23% viewed their financial performance as “healthy.”

Last year, the report found that companies were feeling exactly the opposite. 47% described their performance as “healthy,” 35% as “stable” and only 17% as “challenged.”

“Cumulatively, this steady shift from predominantly challenged to healthy suggests that Indiana’s manufacturing base has largely shaken off many problems dating back to the Great Recession,” the report stated.

MANUFACTURING SURVEY

150%KEY FINDINGS

increase in number of companies that hope to open a new manufacturing facility in the next two years STRONG FOR TODAY CONCERNED FOR TOMORROW

The 2014 Indiana Manufacturing Survey, now in its 8th year, reveals Indiana manufacturing is in better shape today than at any other time in the last decade. However, future growth could be threatened by regulatory, tax and energy costs.

INDUSTRY ECONOMICTHREATS OUTLOOK

78%

predict growth Regulatory in the next two Burdens years

Energy Costs

“Keeping up with the rule of ‘experts’ is getting to be too expensive and makes grass appear much greener in [other] areas of the world...” -respondent

>60% 150%

of respondents these issues increase in number ofsee companies that themanufacturing viability of hope as to critical open a to new Indiana facility in the manufacturing next two years

CALLS TO ACTION INDUSTRY THREATS

MANUFACTURERS:

Invest Regulatory Burdens

Adopt advanced Tax methods Policy

Create Energy apprenticeships Costs

LEGISLATORS: “Keeping up with the rule of ‘experts’ is getting to be too expensive and makes grass appear much greener in [other] areas of the world...” -respondent

Recognize impact of regulation

Competitive taxes

>60% Talk with students

Close skills gap

EDUCATORS:

of respondents see these issues as critical to the viability of Indiana manufacturing

Field trips to manufacturers

Facilitate internships

SEE THE REPORT

CALLS TO ACTION

KSMCPA.COM/2014-INDIANA-MANUFACTURING-SURVEY-RESULTS

MANUFACTURERS:

SURVEY COMPILED THROUGH THE COMBINED EFFORTS OF:

© 2014 KSM BUSINESS SERVICES, INC.

Invest

MARCH/APRIL 2015 | www.buildingindiana.com

Tax Policy

Adopt advanced methods

LEGISLATORS:

Create apprenticeships

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2014’s survey results continue to show, on average, positive improvements across many key financial metrics, but most measurements show that the rate of improvement has slowed. What’s encouraging is that net profit margins remained pretty much the same, at 10% on average.

Perhaps even more encouraging is the group of respondents who plan to open a new manufacturing facility Indiana in the near future; which increased from 8 percent on the last survey to 20 percent for the most recent report.

And among the group who said they planned to expand, more than half of them said that their new facilities will be used to grow existing product lines and produce new ones.

On the subject of expanding operations, just a few weeks ago Governor Mike Pence’s office announced that 16 companies announced new investments across Indiana which are expected to create a combined 2,153 new jobs over the next few years.

“Looking through the numbers, I see another promising year in Indiana’s future,” said Pence.

“From tech developers to manufacturing powerhouses, the collective energy of these Hoosier businesses will help power our economy into 2015, creating jobs, promoting opportunities and

investing in our future.”

Another group of industry professionals that’s predicting growth over the near future is Indiana’s building contractors, particularly in the residential sector. Indianapolis-based Angie’s List, Inc. surveyed more than 1,000 contractors in the home improvement and residential categories of building construction and reported that contractors are very optimistic about business in the coming year.

“We asked contractors what their conversations with customers were showing, and 62 percent of them say their customers aren’t just wanting to make improvements next year, they’re willing to spend more on them than customers spent in 2014,” said Angie’s List Founder Angie Hicks. “More than half of the contractors said customers were planning to add $5,000 to what the average project cost last year.”

When asked about home remodeling trends for 2015, the survey respondents said that many homeowners’ budget expectations have changed.

One contractor said his usual bathroom remodel project was in the $15,000 range for years.

His average bathroom project is now starting at

$20,000. Another contractor said it’s not unusual for homeowners to spend $50,000 on high-end facilities; nothing that well-done bathroom and kitchen makeovers traditionally give homeowners the highest return on home improvement investments, often in the 80 percent range.

Another interesting finding in additional commentary to the survey was high interest in wood flooring over other materials, and interest in higher grade and more efficient lighting systems – all of which signifies increased consumer spending trends.

So, using information straight from the industry professionals who are at the forefront of their respective fields, it would seem that a considerable amount of faith has been placed in Indiana’s coming manufacturing and construction futures.

With the notion in mind that manufacturing is the centerpiece of the Hoosier economy, and increased construction typically spurs economic development, these words of optimism should signify an uptick in other industries throughout the state that will in turn benefit from growth in these two sectors.

For continued updates on this topic and others like it, visit our website at www.buildingindiana.com.

INFORMATION That Matters!

BCRC is a non-for-profit organization that provides an array of services to its members in the construction industry: members include contractors, labor unions, commercial and industrial owners and related workers.

We continuously educate our participants on the adverse effects of drugs and alcohol thereby reinforcing our commitment to establishing and maintaining a drug and alcohol free workplace.“STRIVING TO BE DRUG FREE FOR A SAFE INDUSTRY!

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www.buildingindiana.com | MARCH/APRIL 2015

Being Productive

Elements of Excellence

Identifying Key Characteristics that Allow Companies to be Recognized as “The Best”

By Linda Woloshansky, President and CEO, Center of Workforce Innovations, Inc., Northwest Indiana Workforce Board

A

merica loves winners. Laid-back foreigners are taken aback by our love of competition. It’s part of our DNA. The New England Patriots and Tom Brady: Super Bowl Champs. Apple and Tim Cook: The stock price has risen more than 44% over the past year. The company’s value now stands at more than $700 billion.

So what are the drivers within a company or organization that allow it to be recognized as “the best?”

Member of the workforce board and I have met extraordinary business leaders in northwest Indiana. And, while their stories don’t garner much media attention, we know they have

created an environment within their workplace permitting their companies to prosper in today’s highly competitive global marketplace.

They welcome employee feedback knowing that an open communications process promotes employee engagement. Business writer James C. Price says employees can become passionate about their work if they know the boss is a “listener” and values their comments about improving the workplace. “Make passion the key to your company culture,” writes Price, “and you will breed excellence in all aspects of your service or product.”

Price cites a lesson learned early in life by J.W. “Bill” Marriot, executive chairman and former CEO of Marriott International. On a cold

MARCH/APRIL 2015 | www.buildingindiana.com

winter day, Marriott’s parents had invited then President Eisenhower to their farm. The order of the day was quail hunting; but, before they agreed to step outside, the president turned to the young Marriott and asked, “What do you think, Bill?” Marriott suggested that it was too cold to venture outdoors. The President agreed.

Seeking out the opinions of others was a lesson Marriott never forgot in the many years he managed the international hotel chain.

Toyota—a champion of lean manufacturing and employee empowerment—says it received more than 700,000 suggestions to improve its car manufacturing and assembly systems; the Japanese automaker says 99% of the suggestions were implemented.

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You’re never too old to have a mentor, someone who is part coach, part consultant.

Consider the friendship forged between two of the world’s richest men, Warren Buffet and Bill Gates. It’s clear the two men are very good friends despite a first meeting back in 1991 that tells a different story. “What the hell are we going to spend all day with these people?” barked Buffet. “How long do we have to stay to be polite?” Gates voiced similar enthusiasm and wondered what he would talk about with a man 26 years his senior. Well, the two men found common ground on several subjects. These days, they can be involved in fighting a stubborn Third World disease, or just hanging out.

You’re never too old to have a mentor, someone who is part coach, part consultant.

A few years ago, the CEO of Holiday Inn Club Vacations announced a 10 year growth plan that would result in annual revenue reaching $1billion. The company website says the firm provides “exceptional resort-

44

style experiences in top leisure destinations across the country.” The company has properties in Orlando, Florida; Las Vegas, Nevada; and Myrtle Beach, South Carolina.

The responsibility for supporting this growth plan fell to Scott Doggett, who directs learning and development. Doggett believed the company had many excellent managers who would be excellent candidates but lacked key business skills to accept a promotion within the firm.

Doggett partnered with a training firm that offered competency-based learning and then created a tuition reimbursement plan that covered most but not all of the training cost. The company added this to their training and education support of their employees.

Often the most critical decision points for business is the recruitment and selection process. Seasoned hiring managers will tell you they observe the following rule: “Hire slow. Fire fast.” Extending a job offer to the wrong candidate is an expensive mistake.

How can you be sure that the impressive resume and glowing references is a true indicator of the person you are about to bring

on? More and more companies are beginning to realize the value of internships. Some companies fail to appreciate the true value of the opportunity to eyeball a promising candidate over the course of a six to eight week paid internship. Savvy managers quickly figure out if the person has real potential and someone who can be a true asset to the future of their business. Such businesses understand that the internship gives them a more realistic assessment of the intern’s true potential as compared to a resume or reference.

To be the best requires passionate workers inspired by leaders who allow the workers to be highly proficient in their jobs. They have established clear expectations as to what it takes to be the best in the world. And then as leaders they use the best hiring tools and training strategies while they communicate with, listen to and mentor their employees who then contribute to turning their businesses into world class operations.

The workforce board remains committed to our role in assisting businesses and workers reach their full potential utilizing many of these best practices.

www.buildingindiana.com | MARCH/APRIL 2015

MARCH/APRIL 2015 | www.buildingindiana.com

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Construction Feature Construction Partners for the GE Aviation, Lafayette Facility

Lafayette Takes to the Skies

New GE Aviation Plant in Lafayette brings a Great Deal to Indiana CSO Architects Brasfield & Gorrie General Contractor Architecture and Interiors

LBYD Civil and Structural Engineers Civil and Structural Engineering Crider & Crider Earthwork Lithco Contracting, Inc Concrete ATMI Precast Concrete Wall Panels Geiger & Peters Structural Steel CE Reeve Roofing Roofing Ryan Fire Protection Fire Protection SM Lawrence Company Mechanical Gaylor Electric Electrical

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By Nick Dmitrovich

A

whole new era of collaboration between academia and industry is growing in Lafayette, IN, as construction continues on the new $100 million GE Aviation facility. The company, which is a global leader in jet engines and aircraft systems, expects to create 230 jobs by 2020 and implement strong ties to Purdue University as production moves forward with the LEAP aircraft engine.

“Indiana is a manufacturing state, with decades of experience in building the items that power our world. But we are also a state of innovation, developing the technologies of tomorrow.” said Indiana Governor Mike Pence. “GE Aviation’s plans in Indiana fuse the two. By selecting Indiana for its new jet engine facility, the company gains a workforce skilled at both developing the big ideas and bringing them to life.”

This photo depicts Gaylor Electric setting conduit banks 40’ in the air. The company completed 4 weeks of work in one 10 hour shift by prefabricating these components in their shop.

This method is much safer than building high in the air.

www.buildingindiana.com | MARCH/APRIL 2015

Construction on the project officially began in early autumn of 2014, when Indiana-based developer Pure Development closed on the 50-acre property for the facility, which sits at US 52 and Veterans Memorial Parkway in Lafayette. Presently, GE Aviation has already begun the hiring process for Lafayette employees - more than 400 people applied for the first ten positions. Construction is currently ahead of schedule and is expected to be complete by autumn of 2015, with the building becoming fully operational by January of 2016.

“The structure of the building itself is amazing,” said Drew Sanders, Principal of Pure De-

Indiana Governor Mike Pence speaks in front of a GE Aviation engine during early celebrations of the new Lafayette facility.

velopment. “The heavy structure supports the large cranes that GE needs to move its large engines, and the electrical infrastructure throughout the building is very heavy-duty to supply

their power needs.”

“There are also interesting architectural designs incorporated into the building that you don’t see very often on industrial facilities,” Sanders continued. “For example, from an aerial view, the entryway to the building represents a large turbine blade like you would see in one of GE’s engines. The architectural team, and the construction teams have done a terrific job.”

“When we start planning a project, we build our construction team around the project’s needs. We find the best organizations suited to the particular building we’re working on. Everything is tailored to the client’s needs, which allows us to execute efficiently and remain extremely competitive,” Sanders said.

Globally, there’s already a great deal of anticipation surrounding the new 300,000-square-foot GE Aviation facility. More than 8,000 of the new LEAP engines have been ordered and committed to airlines all around the world, and it does not enter service until 2016. GE will be making an additional $15 million investment in machinery and equipment that will allow for maintenance, repair and overhaul capabilities for the engines at the Lafayette site.

MARCH/APRIL 2015 | www.buildingindiana.com

The LEAP engine is a product of CFM International, which is a joint company of GE and Snecma (Safran), of France. The engine will be used to power aircraft such as the Airbus A320neo, Boeing 737 MAX, and COMAC (China) C919 for airlines worldwide. GE Aviation announced that the Lafayette facility will operate a highly advanced assembly line incorporating several new technologies, including automated vision inspection systems and radio frequency parts management to easily spot parts on the shop floor.

“We are thrilled by the airline industry’s enthusiasm for the new LEAP engine and its groundbreaking technologies,” said David Joyce, President and CEO of GE Aviation. “Beginning in 2015, the LEAP engine will experience a dramatic production ramp-up for the remainder of the decade. We are grateful to the entire Indiana team for ensuring that our Lafayette assembly plant will be soon up and running.”

Numerous state and local entities worked closely with GE Aviation to bring the new facility to Lafayette. Governor Pence’s office, the Indiana Economic Development Corporation (IEDC), the city of Lafayette, and Tippecanoe County of-

47

Construction Feature

ficials have each provided technical support and incentives to ensure the manufacturer’s operations become successful in Indiana.

“We are proud to be a partner with GE Aviation for this next generation of aircraft engines,” said Lafayette Mayor Tony Roswarski. “The commitment in jobs and investment that GE is making is significant and will help raise our community’s standard of living and quality of life. This is a top priority of mine and is especially gratifying.”

Even more exciting is the fact that GE Aviation is working with two Indiana universities - Ivy Tech at Lafayette and Purdue University – to prepare for skills and training support at the new facility.

Purdue University in West Lafayette, which

Pictured are (from left to right) Congressman, Todd Rokita, Senator, Joe Donnelly, Commissioner, John Knochel, Vice President & General Manager, Assembly, Test and Overhaul, GE Aviation, Tony Aiello, Governor, Mike Pence, Mayor, Tony Roswarski, Senator, Dan Coats and Purdue President, Mitch Daniels.

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is only a few miles from the new plant, has a long history of collaboration with GE Aviation

“Purdue and GE are continuing to build a broad and strong collaboration in both research and talent recruitment,” Mitch Daniels, President of Purdue University

and its parent, General Electric Co. The company employs more than 1,200 Purdue University alumni, including more than 400 at GE Aviation.

GE Aviation announced the company

intends to use the new facility in Lafayette as a catalyst for identifying talent and research capability in manufacturing technology among Purdue University’s students, and has met with Purdue officials to explore opportunities that will closely align the university to the new Lafayette facility.

“Purdue and GE are continuing to build a broad and strong collaboration in both research and talent recruitment,” said Mitch Daniels, President of Purdue University. “In today’s world, a strong research university is the best economic magnet a state can have, and the construction of the new GE Aviation facility is a perfect example of that principle in action.”

With the establishment of this new production center, this is truly an exciting time for Hoosier industry. Manufacturing higher learning institutions will be working together to create state-of-the-art aircraft engines and components for a global network of clients. Considering how much effort went into securing GE’s commitment to Indiana, and the ripple effect that the new facility is most likely going to produce, this entire project stands as one of the best examples of how “Indiana works for business.”

www.buildingindiana.com | MARCH/APRIL 2015

Construction Partners for the IndyGo Downtown Transit Center Project

Keeping Indy Rolling

URS Corporation Axis Architecture Rundell Ernstberger Associates LLC Architectural, Engineering and Design Partners Weddle Bros.

Construction Companies Primary Construction

By Nick Dmitrovich Contractor Shiel Sexton Owner’s Representative Banta Electric Electrical Commercial Air Inc. Plumbing/Mechanical Skyline Roofing & Sheet Metal Co., Inc. Roofing Fox Contractors Corp.

Sitework Marion Steel Fabrication, Inc. Structural Steel Circle City Rebar Reinforcing Steel VS Engineering, Inc. Surveying Irving Materials, Inc. Concrete Materials Hagerman Construction Corp.

Masonry Blakley’s Flooring Harmon Steel, Inc. Rebar Installer Poynter Sheet Metal Sheet Metal Gibson Lewis of Indianapolis, LLC Drywall/Acoustic/Metal Soffit Panel Geyer Fire Protection, LLC Fire Protection Waltek Company, Ltd. Glass & Glazing Capital City Fence Co., Inc. Fencing ndyGo’s ridership hit a 23-year peak last year, Patriot Engineering & soaring to 10.29 million passenger trips. Seven Environmental, Inc. Testing individual months achieved record high numPPMI Firestop bers for the company, and those figures are Firestopping only projected to grow with the new Downtown ProClad Inc. Transit facility.

Metal Wall & Soffit Panels “We expect the new facility to increase ridRobert Haines Co., Inc. Waterproofing/Joint Sealants ership once it opens,” said Bryan Luellen, DirecThyssen-Krupp Elevator Corporation tor of Marketing and Customer Information for Elevator Underwood Machinery Transport IndyGo. “One big challenge that bus transit sysBarrier Wall Hauling tems face when attracting riders is somewhat Deco Group of a lack of visible infrastructure, unlike trains Painting which have platforms and clearly distinct rail Earth Images Landscaping lines. Having a brick-and-mortar facility will be

New IndyGo Downtown Transit Center will be a “Signature Structure” for Indianapolis

I

MARCH/APRIL 2015 | www.buildingindiana.com

important for us, and the location will be ideal.”

The site for the 14,000-square-foot building was chosen due to its size and proximity to the “downtown loop,” which most IndyGo routes serve. Publically-owned land was donated by the City of Indianapolis, allowing tax payer dollars to be stretched to the fullest. Amenities across the two-acre site will offer a public indoor waiting area with Wi-Fi access, available retail space, realtime bus arrival information, 19 canopied bus bays, and facilities for bus operators and IndyGo customer service representatives.

Lee Carmichael, President of Weddle Bros.

Construction Companies, general contractor for 49

Construction Feature

the project, said, “Weddle Bros. Building Group is very excited to be a part of the new IndyGo Transit Center project. As a Builder and General Contractor, the opportunity to be a part of a project that will benefit the many patrons of IndyGo and contribute to the downtown Indianapolis landscape is easy to get excited about.”

“This state of the art facility will serve as the downtown hub for IndyGo and provide commuters with a comfortable, inviting and productive space to make their transit connections,” Carmichael continued. “The materials used in the design and construction of the building, the canopies and numerous other unique features of this facility certainly makes this a one of a kind project. It allows Weddle the opportunity to utilize both our construction process management expertise and our master builder’s expertise. Weddle looks forward to providing IndyGo and the City of Indianapolis with this exceptional facility.”

The transit center is applying for a LEED Silver Certification. Environmentally friendly features of the project include solar power in the canopies, storm water management, curbside rain gardens, and energy efficient

lighting and HVAC. IndyGo has also made significant investments in bus stop amenities and infrastructure throughout the city last year, installing more than 4,000 square feet of sidewalks and concrete pads for benches and shelters in collaboration with the Department of Public Works.

Funding for the Downtown Transit Center project came from several different sources.

IndyGo received $13.5 million in federal funds through a combination of grants which includ-

ed special appropriations attained with the help of the late U.S. Representative Julia Carson, and formula funding from the Federal Transit Administration based on IndyGo’s service area. An additional $6 million in local matching funds came from IndyGo’s capital budget.

Construction began on the Downtown Transit Center in autumn of 2014, and work is expected to be completed by the end of this year. Indianapolis city officials have mentioned that the center may serve as a “signature structure” that could spur continued development

ARE ALL

Our operator made a successful pick. But what made it successful was the team that supported him. The oilers who maintained the crane and kept it ready to operate. The drivers who hauled the equipment to the site. The people that worked on the lift plan. And this team is part of a much bigger team, the ALL Family of Companies.

www.allcrane.com © ALL Erection & Crane Rental Corp., an Equal Opportunity Employer

50

www.buildingindiana.com | MARCH/APRIL 2015

in the surrounding area, which is already in the midst of revitalization.

To the northeast of the Downtown Transit Center, on the former site of the Market Square Arena, Columbus, IN-based engine manufacturer Cummins Inc. has announced plans to establish a $30 million division headquarters for over 400 of its employees.

Immediately north of that, Flaherty & Collins Properties is expected to begin construction on an $81 million, 28-story residential high-rise this year.

Indianapolis Mayor Gregory Ballard said, “Simply put, Indy needs to raise its game. We need more signature structures that define our skyline. IndyGo’s new Downtown Transit Center definitely fits that mold.”

Additionally, demand for downtown living is at an all-time high throughout the city, according to Bob Schultz, Vice President of Marketing with Downtown Indy. He said that many younger individuals are becoming less reliant on their own vehicles, and public transportation is becoming a critical draw for attracting people to the downtown area.

““Simply put, Indy needs to raise its game. We need more signature structures that define our skyline.

IndyGo’s new Downtown Transit Center definitely fits that mold.”

Gregory Ballard , Mayor of Indianapolis

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With the new infrastructure of the IndyGo Downtown Transit Center serving as a logistical anchor for the revitalization area of Indianapolis, the city is certainly in a good position to attract new residents and supply their transportation needs. Additionally, continued investment from numerous companies has provided hundreds of new jobs over the last year, leading one to conclude that Indianapolis is certainly “going places.”

For continued updates on this topic and others like it, visit our website at www.buildingindiana.com.

MARCH/APRIL 2015 | www.buildingindiana.com

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51

Well Being

I Offer Health Insurance to my Employees;

I’m Safe from the Affordable Care Act Penalties, Right?

By Matt Glaros, Chief Strategy Officer – Benefits Producer, Meyers Glaros Group

N

ow that the Affordable Care Act, otherwise known as ObamaCare is in full swing, we hear many employers making the statement “I offer Health Insurance to my employees, I’m safe from the Affordable Care Act penalties, Right?” Unfortunately, offering health insurance is just one of the many hurdles you must pass before you are completely free from penalties that could be levied on employers in the coming years. We spend a lot of time discussing the Pay or Play rules for employers with 50 or more employees. Realistically, employers should have already addressed this issue or are addressing this issue this year. If not, this should be a top priority immediately! In this article, I am going to forgo that topic and touch on the less well known risks to employers.

Many individuals believe that in order to pay for the costs of the ACA law, the government is going to have to collect additional revenue. The first place they will look to is you, the employer. Since the passage of the ACA bill, the government has been slowly implementing portions of the law that have serious financial risks to the employers who do not comply.

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www.buildingindiana.com | MARCH/APRIL 2015

Here are just a few common penalty risks we find: 1.) Doing Mid-Policy Year Changes- Since the passage of ACA, the employers who make mid policy year changes (this means off renewal date) and do not provide employees at least a 60 day notice of the change can be subject to a $1,000 per employee fine for not giving proper notification.

2.) Not providing the Summary of Benefits and Coverage- Once an employer makes a plan decision they must notify employees with an updated Summary of Benefits and Coverage to ALL ELIGIBLE EMPLOYEES, for all plans offered in the appropriate time. If you fail to comply, the penalty can be up to $1000 for each willful failure and it may also trigger a $100 per day per individual fine as well.

3.) IRS CODE 6055 and 6056 (form 1094 and 1095)- These forms will be filed in 2016 for 2015 wages for all Applicable Large employers, meaning an employer with more than 50 full time employees. These forms are the indicator of who in the workplace was offered coverage and if it was deemed affordable. These forms will be sent to the employees to file with their taxes and ultimately will be coordinated to see if either the employer or employee is penalty/fine eligible. Most fully insured employers will only be responsible for the 6056 portion and most self-insured employers will be responsible for both 6055 and 6056. The fine for not providing these forms or doing them incorrectly would be $100 per statement.

4.) Form 5500- Generally employers with more than 100 covered employees must file a Form 5500 with their accountant by the last day of the seventh month. The Form 5500 covers costs and fees associated with the plans offered. The fine for not filing the 5500 is based on employer size and generally should not exceed $4,000 per plan for large employers.

We find that most employers are unaware of the above risks because few, if any, have been penalized for not complying. However, as the ACA costs become more prevalent these are just a few of the easiest ways the government can generate significant revenue quickly without having to raise taxes. The general public and employees will rarely see the effects of these fines as the media rarely reports on fines that hit owners of the businesses.

There are a few other notices/requirements that employers are asked to do today which have no penalty attached with them for not complying.

However, as the costs go up, the penalties for non-compliance could be added to generate revenue if needed. We recommend complying with the following notices and filing: 5.) Exchange Notices- Employers must provide all new hires and current employees with written notices about the health insurance exchanges and how it pertains to the health plan offered. For new hires, it must be provided within 14 days of hire. For current employees, it must have been provided by October 1, 2013 or if there has been a change to the eligibility.

Choose Methodist for

Award Winning Cancer Care Cancer is scary. It’s even more frightening if you don’t know where to turn. Fortunately, nobody in Northwest Indiana should have that problem.

Methodist Hospitals has been setting the standard for cancer diagnosis and treatment for years. Our Comprehensive Cancer Program has been accredited by the American College of Surgeons for 40 years, and was one of just 74 U.S. cancer programs to earn the Commission on Cancer’s Outstanding Achievement Award for its most recent accreditation.

All of the recognitions we have earned are the result of our unwavering commitment to quality of cancer care certified by the Commission on Cancer – because everything our physicians, nurses and staff do is in the pursuit of excellence: in knowledge, continuing education and direct patient care.

6.) Medicare Part D Credible Coverage notice- Every October 15th employers must notify their covered employees if their health plan is considered credible or non-credible, even though there may be no covered individuals under the age of 65 on the plan. We recommend that employers distribute this notice regardless.

7.) Disclosure to CMS- Within 60 days of the beginning of a new plan year, every employer must disclose to CMS if their prescription drug plan is credible or non-credible, by filing online at CMS.gov.

To wrap up, as of today, we have not seen many employers being hit with fines for not complying with the above requirements. We recommend that employers get into the practice of complying and make sure they stay as compliant as possible. Once the audits start happening, it could be too late to shore up the house.

Unfortunately, as business owners and operators, a lot of these responsibilities fall back on you. Make sure your teams are up to speed and you have a trusted advisor in your circle.

MARCH/APRIL 2015 | www.buildingindiana.com

MethodistHospitals.org

53

Logistics

Keeping Things Rolling Updates on Indiana Logistics

By Nick Dmitrovich

A

s the winter months begin to defrost, and the state of Indiana begins to open itself up to an entire new season of possibilities, many thoughts turn to our literal economic pathways - our logistics network. Indiana’s roads, railways and waterways provide the circulatory system for our manufacturing monster, which is responsible for thousands of jobs and billions of dollars across the state.

In the following paragraphs, we’ve condensed some of the most interesting news items that have been released in recent weeks - providing you a snapshot of several important developments taking place throughout our logistics network.

Pence Releases $200 Million for “Major Moves 2020” In early January, Indiana Governor Mike Pence announced his decision to release the remaining $200 million set aside for the “Major Moves 2020” highway construction program.

“When we call ourselves the Crossroads of America, we need to have the roads to back it up,” said Governor Pence. “Projected revenue reports show good overall financial health for the state, and I am confident an additional $200 million can be invested in a fiscally responsible way to put Hoosiers to work on Indiana’s infrastructure.”

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Design-build contracts to be bid next year will expand three heavily-traveled sections of four-lane interstates: •

•

•

I-65 from State Road 44 near Franklin to Main Street in Greenwood I-65 from Sellersburg (Exit 9) to Memphis (Exit 16) in Clark County I-69 from State Road 37 in Fishers to Southeastern/Campus Parkway (Exit 210) in Hamilton County

“When we call ourselves the Crossroads of America, we need to have the roads to back it up,” Mike Pence, Governor of Indiana

Two contracts have been awarded with the initial funding and construction will begin later this year: •

•

I-65 from Main Street in Greenwood to Southport Road in Indianapolis I-65 in the Lafayette area from State Road 38 to State Road 25

Additionally, over the last few years, Governor Pence’s administration has dedicated $800 million in new money available for roads and bridges, including $200 million for local governments.

Illiana Corridor Though the project is currently stalled due to administrative changes in Illinois, progress on the Illiana Corridor reached a major milestone at the tail end of 2014 when the project’s environmental planning phase received approval from the Federal Highway Administration. Presently, officials in both Indiana and Illinois are transitioning into the implementation phases of the project, which means they are actively seeking publicprivate partnerships to help design, build, and maintain the $1.5 billion, 47-mile road.

Land acquisition efforts can also begin.

The expressway, planned to connect Interstate 55 near Wilmington, IL, with Interstate 65 near Lowell, IN, still faces sharp criticism from many constituents in both states.

Environmental groups, property owners and other planning officials have expressed strong concern that the road will be a costly project with many negative side effects including reduced farmland production, and low return on investment. On the opposite side

www.buildingindiana.com | MARCH/APRIL 2015

of the spectrum, supporters of the highway feel that the road will be a major generator of jobs and economic development, while simultaneously providing a pathway to avoid much of the greater Chicago area’s heavy traffic congestion.

“Leaders from around the region have expressed concern that the Illiana project would siphon dollars from other transportation projects and undermine planning for a strong Chicago region,” said Jack Darin, Director of the Sierra Club, Illinois Chapter.

Indiana state Representative Ed Soliday, also chairman of the Indiana House Roads and Transportation Committee, said, “This is not somebody’s Bridge to Nowhere. The studies are pretty compelling. There is no more room to build additional lanes on 8094, where traffic is expected to increase by 50 percent in the coming years.”

Milton-Madison Earns National Recognition Last but not least, when drafting an article that discusses Indiana logistics, we simply couldn’t ignore the fact that the Milton-Madison bridge project continues to earn national recognition. During December’s National ABC (Accelerated Bridge Construction) Conference in Miami, the Milton-Madison bridge was named “Best Project” for 2014 in the lateral slide category.

Nearly eight months ago, the MiltonMadison Bridge, at 2,428 feet, became the longest bridge in North America — and perhaps

the world — to be slid laterally into place when it was moved 55 feet from temporary piers onto refurbished permanent piers. The 30-millionpound new steel truss bridge is 40 feet wide with two 12-foot lanes and 8-foot shoulders – twice as wide as the original 1929 structure that it replaced. All told, this project will stand as an outstanding example of the strength of Indiana’s logistics network for years to come.

For continued updates on this topic and others like it, visit our website at www.buildingindiana.com.

US 31 - Updates on Several Sections Just before Thanksgiving last year, INDOT’s construction crews opened a section of US 31 in Hamilton County between Old Meridian and 136th streets. Two lanes of traffic are open on northbound and southbound sides of this portion of US 31.

Upon completion of construction in late 2015, three travel lanes will open on northbound and southbound US 31 in Carmel.

Earlier in the year, Governor Mike Pence joined Congresswoman Jackie Walorski to celebrate and officially open 20 miles of divided, four-lane highway between the U.S. 20 Bypass in South Bend and U.S. 30 near Plymouth.

In between, traffic is only able to access the new freeway through entrance and exit ramps at three interchanges: Kern Road (South Bend), State Road 4 (Lakeville) and U.S. 6 (LaPaz). A fourth interchange at 7th Road near Plymouth is under construction and will open to traffic by the end of this year.

All of the U.S. 31 projects near South Bend, Kokomo and Indianapolis are a key part of the Major Moves construction program supported by the 2006 lease of the Indiana Toll Road. They are intended to reduce congestion, improve safety and provide continuity of commerce and regional travel for a U.S. highway that stretches from Michigan to Alabama.

MARCH/APRIL 2015 | www.buildingindiana.com

55

Workers Comp

Behind the Scenes Uncovering Hidden Costs of Workplace Injuries

By Nick Dmitrovich

T

he direct costs of a workplace injury, or worker’s compensation claim, are often easy to identify and calculate - medical costs and indemnity payments for an injured or ill worker stand out as the initial costs that companies typically face under these circumstances. But, for most businesses, the buck certainly doesn’t stop here – there are often numerous indirect expenses that arise long after the injury has occurred, and can wind up costing companies considerably more money than the direct costs of an injury.

Behind the scenes, businesses face background costs relating to training and paying re-

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placement worker to fill the injured employee’s position, repair or replacement costs for damaged property, accident investigative costs, corrective action expenses, and potential increases in insurance premiums. All of which continually adds to the overall costs of a simple injury.

Diving even deeper, we find that there are still further expenses lurking beneath the aforementioned costs – many of which are difficult, if not impossible to fully calculate. An injury can lower employee morale, for example, which could spiral into increased absenteeism and reductions to the positive relations between staff and client bases. Schedule delays could

arise from decreased productivity, reducing profit margins, and added administrative oversight could be required to route the company back on track – all of which could put serious constraints on a company’s budget.

Negative reports through the media can also be a potentially serious problem for businesses.

Due to the fact that many of these costs are spread out over time, they are often not specifically linked with the initial costs of the accident by most employers. Which is why, when a workplace injury occurs, companies should be focused on a long-term plan to adequately budget for the loss in revenue over time.

www.buildingindiana.com | MARCH/APRIL 2015

The National Safety Council provides an injury cost calculator that uses OSHA figures and national statistics to describe the types of expenses, both hidden and obvious, that companies can expect to face when determining what the overall actual costs will be after a workplace injury.

Here’s a breakdown of the surprising figures hiding behind the average injury claim: • Right off the bat, $38,000 in expenses relating to the direct cost of the injury. This $38,000 figure is taken from an average work related injury, as noted by the National Safety Council, and reflects costs including emergency room and doctor visits, medical bills, medicines, and rehabilitation.

• Indirect costs of the injury = $152,000. As the online calculator explains, “Indirect costs of an injury are often overlooked. These cost can amount up to 4 times the direct cost of the injury. Indirect costs include administrative time dealing with the injury and medical care, raises in insurance costs, replacing the hours lost of the injured employee with hiring another employee, loss of reputation and confidence

in employees and clients, unwanted media attention, and more.”

• Total costs (indirect + direct) = $190,000. This is the actual amount that companies can expect to spend when an accident happens on their jobsites. However, there are still a few additional factors to consider.

• The profit margin of a business, in this case we’ll say 10%, determines the revenue required to offset losses from an injury.

• Revenue required to offset the company’s loss = $1,900,000. This figure is calculated by ( Total Cost ) / ( % Profit Margin / 100 ). This figure represents the total dollar amount a company must earn to pay for the costs of the initial injury and indirect costs. A business must make a profit on revenue to recover those costs.

These figures highlight the reality of the real costs of a workplace injury scenario, although it’s important to note, what you’re seeing described here is only an average based on national statistics. Actual prices of differing

injuries vary widely based on the type of accident, the treatment required to remedy said injury, and the role the injured employee plays within the company. For example, a foreman experiencing a severe head injury could present costs that are astronomically above and beyond what these numbers describe.

This is why it’s important to prioritize safety. Investing in proper safety techniques, and even going so far as to employ expert safety professionals, is certainly cheaper for any organization against the costs of incurring multiple injuries over a company’s history.

According to a study cited by OSHA, every dollar a company invests into a safety and health program saves $4 to $6 in potential injury expenses.

Also, in turn, companies with stronger performances in safety tend to earn the business of more clients than those who have higher incidence rates – making safety the absolute smartest business investment.

For continued updates on this topic and others like it, visit our website at www.buildingindiana.com.

Public Works • Municipal • Commercial Industrial • Heavy Highway • Petro-Chemical

2011-2013 NMAPC ZISA Gold Star Award 2013 NWIBRT Contractor Safety Excellence 2014 CAF Project of the Year 2008-2014 ICA Golden Summit Award

Over 21 million work hours over the past 15 years at the BP Whiting Refinery without a lost time incident!

www.superior-construction.com

MARCH/APRIL 2015 | www.buildingindiana.com

57

Lifelong Learning

It Can Be Done High School to Registered Apprenticeship Programs are Possible under State and Federal Law

By Nick Dmitrovich

T

here are many misconceptions floating around about the legality of school-to-work apprenticeship programs throughout Indiana’s business community. Given that so many Hoosier companies often mention a strong desire for skilled labor, one would think that more organizations would be looking into recruiting and training young people as a valuable solution to the skills-gap issue, but the fact is many just believe that it’s not possible.

From the top down, many government officials, school officials, and employers say “it can’t be done”, or “Department of Labor regulations prohibit kids from working on the shop floor” – but these notions simply aren’t true. State and federal regulations do allow 16 and 17 year old high school students to

58

participate in registered apprenticeship programs, provided that these programs adhere to a specific set of basic stipulations.

“I have been an advocate for these types of school-to-work or school-to-apprenticeship programs for several years as one tool to help bridge the “skills gap” for those young people who choose not to follow the traditional college-education path, or who may not be quite ready to attend college immediately after high-school,” said Rick J. Ruble, Indiana Department of Labor Commissioner.

“Young people can get into USDOL bona fide apprenticeship programs at age 16,” Ruble said. “There are even exemptions under the federal Fair Labor Standards Act (FLSA) that allow 16-year old and 17-year old workers to perform jobs that they would otherwise be prohibited

by federal law from performing.”

School-to-registered-apprenticeship programs could stand as a very proactive approach that employers can take to directly impact the skills-gap problem, and there are numerous benefits that companies should recognize. For one, employers will be given the opportunity to provide input regarding industry standards and student occupational education and training. Which in turn will give companies a platform for developing occupational standards and a customized occupational training plan that will be capable of producing individuals uniquely skilled to meet the needs of their business.

Subsequently companies will also be given the noble benefit of working closely with a student who could very well grow into a full-

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time employee. Working closely with the student, parents, classroom instructors, counselors, and Office of Apprenticeship will help companies ensure the student’s program success, as well as support program activities and goals.

There are four conditions required to establish a school-to-registeredapprenticeship program, as noted by the Indiana Department of Labor (IDOL) and the U.S. Department of Labor.

• There must be a student who is minimally (according to employer’s criteria) qualified for the job and has the ability and interest to pursue employment and training in the field.

• There must be an employer willing to provide supervised paid on-the-job training.

• There must be related instruction available which directly supports the on-the-job training.

• Upon graduation, the student must be able to engage in 144 hours/year of related instruction and 2000 hours/year of on-the-job training in order to complete their apprenticeship program.

Program flexibility is possible based on employer and apprentice need.

With regard to hazardous occupations, young people in Indiana are still eligible to participate because they receive safety training both at school and on-the-job. The apprentices are required to be closely supervised by at least one professional worker at all times, which helps to ensure safety and best practices are closely observed.

In addition to the outlined conditions that must be met, Commissioner Ruble mentioned a few other key suggestions that may help entities help a program of this type become established.

“Collaboration with all involved parties (i.e. local business, school officials, labor union, etc.) is very important. Also, input or involvement should be sought from USDOL – ETA,” Ruble said.

He also said that companies interested in implementing programs of this kind should involve their worker’s compensation insurance carriers in the discussion process from the onset, to cover all legal and liability obligations.

For employers who feel that taking on apprentices isn’t possible for their particular company, it’s important to remember there are over 1000 occupations that can qualify for registered apprenticeships under the U. S. Department of Labor’s guidelines.

In order to qualify, the occupation only needs to meet the following criteria: • Be widely recognized as a distinct occupation throughout an industry • Be customarily learned in a practical way through a systematic program of supervised on-the-job training • Involve training in manual, mechanical or technical skills and knowledge • Require approximately 144 hours of related instruction for each 2,000 hours of on-the-job-training.

This means that there is a wide variety of different companies that can legally begin growing their own skilled labor from within through the use of apprenticeships – far beyond the typical perception of apprenticeships only existing in the construction trades.

Many companies throughout Indiana are certainly missing out on some incredible young people who could grow to be valuable employees, all due to a silly misconception about youth labor regulations. At the same time, many young Hoosiers aren’t being exposed to some terrific career paths. Moving forward, consider implementing a school-to-registered-apprenticeship in your company – it just might prove to be extremely valuable.

MARCH/APRIL 2015 | www.buildingindiana.com

59

Green & Sustainable

Sustain Your Business Sustain Your Business with Pollution Prevention!

By Cathy Csatari, Senior Environmental Manager, Indiana Department of Environmental Management (IDEM)

A

re you looking for savings at the

prevention can decrease corporate liability and

In 2010, Metaldyne BSM in Fremont

top-line and the bottom-line?

regulatory burden, as well as reduce health risks

switched lighting from T12 to T8’s and added

Consider becoming more sus-

for employees and customers.

insulating window film. This resulted in an

tainable by implementing pollu-

Companies are looking past the next

energy consumption reduction of 757,512 kWh

tion prevention strategies.

quarter’s financials to more long-term thinking.

and a cost savings of $38,484. In 2014, Metaldyne

“Companies that implement pollution

They are moving past simple paybacks or

started a glove laundering program saving

prevention measures often save money be-

return on investments when making decisions

$4,500 while reusing 3,339 pairs of gloves.

cause efficiency is gained in their manufac-

on capital improvements to a more life-cycle

turing processes, raw materials are saved, and

cost over the life of the investment. They are

lumbus, worked with suppliers to return pack-

less waste is generated,” said Rick Bossingham,

looking at the soft benefits such as a more

aging materials for reuse instead of disposing of

assistant commissioner for the Office of Com-

pleasing work setting, leading to less employee

them at the plant. Overall the company was able

pliance Support at the Indiana Department of

stress and increased productivity, and better

to reduce the amount of pieces landfilled from

Environmental Management (IDEM).

lighting, leading to improved quality control

32 to 1.7 percent and saved $113,964 in landfill

The potential benefits of pollution preven-

Quality Machine and Tool Works, Inc., in Co-

and reduced work place accidents.

fees, which is expected to continue.

tion are numerous. Pollution prevention is good

for the environment, saving natural resources

on daylight harvesting, installing motion sen-

mated $113,333 dollars per year just by switch-

and preventing discharges to the air, land and

sors, and programmable thermostats, to large

ing out pre-1980 toilets that used, on average,

water. Pollution prevention is also good for busi-

investments such as complete lighting retrofits

five to seven gallons per flush to new toilets

ness, offering the financial benefits of increased

or modifications to manufacturing lines, compa-

that use as little as 1.6 gallons per flush.

efficiencies in the use of raw materials, energy,

nies across Indiana are seeing the paybacks of

water and other resources, as well as improv-

their pollution prevention activities. Many Indi-

Technical Assistance (OPPTA) supports pollu-

ing public image and market share. Pollution

ana companies have success stories to share.

tion prevention! By offering voluntary recogni-

60

From low hanging fruit such as capitalizing

Camcar LLC in Rochester is saving an esti-

IDEM’s Office of Pollution Prevention and

www.buildingindiana.com | MARCH/APRIL 2015

tion and technical assistance programs, IDEM promotes pollution prevention and other environmental stewardship activities in businesses and communities throughout the state. Activities such as recycling and waste management help ensure that Indiana’s environment and economy are sustainable for future generations.

The following are OPPTA programs and the benefits of participation The Indiana Partners for Pollution Prevention is an organization comprised of Hoosier industries, businesses, nonprofit organizations, and governmental entities interested in pollution prevention (P2), as well as the financial and environmental benefits P2 projects can bring. Commonly referred to as “Partners” and “P4P2,” this organization provides a forum where businesses network and exchange ideas, share P2 experiences, and discuss how P2 fits into IDEM’s regulatory programs The Environmental Stewardship Program (ESP) is a voluntary, performance-based leadership program designed to recognize and

reward Indiana businesses for going above and beyond current environmental regulatory requirements. Businesses are recognized as ESP members after implementing an Environmental Management System and committing to continual environmental improvement through pollution prevention and source reduction activities. In return for exemplary environmental performance, members are eligible for incentives, including regulatory flexibility, public recognition, and networking opportunities.

The CLEAN Community Challenge is a voluntary recognition program rewarding cities, towns, and counties for proactively managing environmental impacts associated with the community’s operations. CLEAN members develop and implement a Quality of Life Plan (QLP) and select environmental priorities to focus on during a designation period. CLEAN can potentially help communities cut operating costs while improving the quality of life for residents. Making small, positive changes encouraged by the program benefits the environment and can reap valuable rewards, including decreased costs, increased efficiencies, state-wide recognition, improved relationships with regulators, and financial and

regulatory incentives from IDEM and its state agency partners.

DEM’s Compliance and Technical Assistance Program (CTAP) is a non-regulatory program offering free, confidential compliance assistance designed to help Hoosier businesses understand and meet their environmental responsibilities.

CTAP staff members are highly-skilled environmental professionals who provide guidance at no charge on environmental regulations and requirements. More specifically, CTAP staff can assist via telephone and email; on-site consultations, training and workshops; and online resources.

IDEM understands the ongoing challenges businesses and communities face in meeting regulatory requirements while still trying to efficiently and effectively operate.

That is why we offer our pollution prevention and technical assistance programs to ease concerns, coordinate efforts, create an atmosphere of networking and education, and incentivize thoughtful actions that improve both the environment and the economy

Growing

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Your Business

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Visit us online or call a Business Banker at 219.853.7500 to get started today!

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Marketing

Video Marketing Killed the Radio Star

By Michael Goodpaster

W

hile technology has grown, getting your company or brand seen by your audience is still not as easy as it seems. The social media explosion has produced a false perception in the world of marketing. It’s true that anyone can post an image or video and connect to millions of potential viewers and new customers, but sadly, this approach will not get your company very far.

Due to the fact that the price of video marketing has been drastically reduced over the last decade, more and more companies have begun to take advantage of this medium as an affordable way to enhance their advertising campaign.

In turn, video marketing has become competitive than ever. Beyond just rival companies, your videos will be competing against every facet of entertainment, information and content that passes busy viewers. In this current screenfaced society, technology has given everyone direct access to virtually any content they want.

Why should they want yours? It’s not just about getting attention anymore. It’s about getting the right attention. The common video viewer is so oversaturated with content that you need something that will not only catch their eye, but also their mind. This will require production value and attention to detail.

You do this the old fashioned way: creativity, persistence, a marketing plan, and professional production. It’s the same as design. You can throw together a general page of information with most word processing programs in your office, but is this the quality you want your customer, your company or the world to see? Of course not.

There is a reason Super Bowl commercials sell for millions of dollars per spot. It’s because most companies know the value of captivating

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an audience at the right time. While every company doesn’t have a Super Bowl commercial, every company should have a video presence.

Here are a few things to consider: -Call to Reaction: With video marketing it’s not as cut and dry as just using a video to promote a brand without any rhyme or reason. The advert needs to convince the viewer to do something. Be it make a new purchase, attend an event, take advantage of a new promotion or engage in the brand. With this, it’s not just a call to action, it’s a call to reaction. The best “viral” videos captivate an audience to the point they share it with others. Your video may do that through entertainment, general sales, discounts to viewers or in numerous other appealing ways.

Got a plan already? Great! Now what perception do you want the customer to have?

-Company Voice and Message: First impressions are vital. The point of view a consumer or business associate has of a brand or company is often hard to sway once developed. It’s been said “If you don’t like the show, change the channel,” and that’s exactly what customers do. If they don’t connect with your company’s message, they will “change the channel” by turning to your competition or an alternative option. Your brand or company should already have its own identity and it’s always best to be true to that.

-Production Quality: We’ve already established that cell phone video is a big red flag to those looking to take your brand seriously. However, this doesn’t mean a huge blockbuster budget or years of film school are needed. With proper lighting, clear

and bold graphics and fonts, a nice setting, and a solid game plan, a professional quality video can be produced very economically by video marketing agencies. Your main consideration should be what the viewer gets out of it. If it’s a shaky camera with hard to read texts on top of underwhelming edits, you’re likely to lose a customer whose perception has been formed.

-Promotion/Broadcast: When starting a new project, it’s best to ask what your means of distribution will be. Is the video being made for television broadcast, internet, or to be used as part of the company’s in-house video series? There is a lot to consider once distribution is decided upon. If it’s for the internet you have to ensure that it’s clear and cohesive enough to hold the viewer’s attention for the duration. If it’s for television, it’s best to make sure the project looks good on a television screen before finalizing. A paramount video rule to live by is to “know where it’s going to be showing before you really start going.”

-Time Spent: You can literally spend years on making a great video, but you don’t have to. Too often video makers will get caught in the “unfinished trap” and have a hard time stepping away from a finished project. Set a clear objective and achieve it.

Whether it’s a Super Bowl commercial, an advert to promote strictly on line, an introduction or orientation for your company, or a digital bio, every company, business or brand needs to be seen, heard and experienced. A good video will provide good exposure, but a great video will knock down walls between you and the world.

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Economic Development

Indiana’s New Look at Economic Development: Indiana Regional Cities Initiative

by Eric Doden, President of the Indiana Economic Development Corporation

I

ndiana prides itself as a catalyst for growth.

We have a consistent track record for attracting new companies and investment from all over the world. In the last year, Indiana led the nation in manufacturing job growth.

Now we’re leading the way toward delivering a new, 21st century workforce, with industries from aerospace to life sciences thriving here.

These industries are bringing innovation to the global marketplace with Hoosier ingenuity, talent and determination. With a sound business environment, a triple-A credit rating and a rate of job growth that continues to outpace the nation, Indiana is unquestionably the leader in economic development in the Midwest.

Despite these significant achievements, Indiana and the Midwest face serious threats to long-term economic growth. The single biggest threat to Indiana’s economic development is population stagnation. Over the last decade, 80 percent of Indiana’s population growth was attributed to the birth rate outpacing the death rate, growing from around 6 million to 6.4 million. In contrast, the Southern and Western states are experiencing the fastest-growing populations in the country, which is widely attributed to at64

traction and retention of its people. From 2000 to 2010, the Southern U.S. grew by 14.3 million people and the West added 8.7 million residents, while the Midwest only saw a gain of 2.5 million people in the same timeframe. That adds up to the Southern and Western states claiming 84 percent of the nation’s population growth in the last ten years. For example, on average Austin, Texas

The single biggest threat to Indiana’s economic development is population stagnation. sees 120 people move to its city daily, and Denver, Colorado sees more than 270 people move to its city each day. Population stagnation in the Midwest is evident, and it becomes clear that talented workers want more than just a good paying job. They want a lifestyle and an atmosphere that pay dividends with strong ties, cultural resources and a community that inspires, educates and fosters personal growth. Finding the pulse of these workers and bringing that energy to our regional communities is crucial for growing our popula-

tion and retaining our best and brightest.

That’s the challenge facing Indiana as we look at sustainable economic growth for the future. We’ve already built a better business environment through deliberate planning, sound fiscal policy and a collaborative business spirit. The next logical step is to implement those same principals of planning and collaboration to build a better quality of place that will continue to attract and retain the next generation of Hoosiers, bolstering our economy and continuing to build upon the strong fiscal foundation Indiana has created.

The Regional Cities Initiative is doing just that. Through this initiative, Indiana is looking at economic development in a unique way and encouraging our cities and regions to transform into national economic powerhouses. As part of the initiative, last year the Indiana Economic Development Corporation studied cities that led the nation in economic growth over the last 20 years and analyzed successful quality-of-place initiatives using 74 economic indicators. By building prosperous cities, they are building prosperous states.

These cities, which we call Indiana’s “peer cit-

www.buildingindiana.com | MARCH/APRIL 2015

ies,” were examined to understand what was required to achieve a national brand. The executive summary that details these findings can be found at IndianaRegionalCities.com.

With the study complete, Indiana is now focused on our state’s regions, aiming to combine assets in individual cities and towns to deliver a network of culture and attraction, with the end goal to attract and retain talent to live, work and play in Indiana.

A huge component of our quality of place in Indiana comes from our people.

Hoosiers have helped make us become the motorsports capital of the word, the orthopedics capital of the world and a fantastic place to live and make a living. The racing community, the science and research community and the amateur and professional athletic communities are all flourishing here in regions across the Hoosier landscape. Indiana already has some of the top destinations for sport, education and recreation, so we recognize the successes our people have reached.

But when competing with locations across the country that are retaining and attracting top talent at a rapid pace, Indiana sees the necessity of continuously improving our regions and quality of place.

We’re encouraging local regions and communities to craft collaborative solutions to put Indiana on the national map as a sought-after location for quality of place.

Studies show that by collaborating and executing their shared vision, communities position themselves for economic growth. When regional communities implement long-term strategies for growth, the entire region, both urban and rural, benefits. Our goal is to work alongside local public and private leaders to build and enhance regions. We aim for these leaders to not just create their own regional visions and actions plans, but to also implement these plans to amplify Indiana’s quality-of-place message as a state that is serious about becoming not just a business leader, but a cultural leader in the Midwest.

We believe Indiana has a unique opportunity to pursue excellence in quality of place due to its economic stability and low cost of living that few places on the planet can match. Indiana has worked tirelessly over the last decade to make our state a destination for business. Now is the time to make our state a destination for talent.

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L s V o

The Last Word

Human Capital

and the Art of Giving Back

By John Freyek, Vice President/Senior Relationship Manager, First Merchants Bank.

F

or those of us in the business world

vest in community service.

business. But then I want you to determine

of Indiana, we are sometimes over-

Consider the commitment of employers

what speaks to your soul, and go out and find

whelmed by the sheer number of

in Indiana to the greater good, that they are

a non-profit doing that type of work and offer

fundraisers, galas, and ribbon cut-

willing to allow (and in certain cases, expect)

your help, because they need it.”

tings we attend annually. We get dressed up,

their employees to provide labor, leadership,

have a nice dinner, see the same faces, and catch

and organization to local charities – time

good for the soul is generally good for business.

up on the latest news in each others’ lives. But

which could be spent generating income for

In other words, yes, the non-profit world needs

underneath the social aspect of these events is

their own businesses.

your funds. But they also need YOU. Your pas-

the common theme of service and support to

sion. Your commitment. Your leadership.

the organizations that help our citizenry.

deduced that the act of giving back pays un-

expected dividends, too. Few things prepare a

ever. Not by a long shot. The real work is

Our community is a prime (and proud)

example of good corporate citizenship, as

But perhaps our business leaders have also

our largest industries (steel, healthcare, and banking) at each of these events. The funds

We are not doing this by ourselves, how-

done by the thousands of people who have

What is good for the soul is generally good for business.

seen by the financial support provided by

The message was, and is, clear: What is

made these charities their life’s work. From the social workers going into homes and apartments to teach young parents how to

these corporations give back to the not-for-

change diapers or the proper way to lay their

profit community are the lifeblood by which

young professional for management better than

babies down to sleep, to the therapists who

these wonderful organizations continue to

being involved in a fundraising committee or

teach children how to walk, and talk, and

operate and thrive.

board of directors, where the act of bringing

swallow unassisted. To the counselors, fight-

The business community expends quite

a diverse group of professionals together for a

ing every day to help people throw off the

a bit of capital for these events, supporting

common purpose hones his or her leadership,

chains of addiction, and the folks delivering

myriad charitable causes and not-for-profits

diplomacy, problem-solving, and public speak-

meals to those who can’t drive. To the self-

in the communities where we live and raise

ing skills in real world situations.

less volunteers at soup kitchens and home-

our families. But of equal importance (if not

less shelters.

more) is the HUMAN capital businesses in-

brate my 20th anniversary in banking in Indi-

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They are, each in their own

way, heroes.

ana. For that entire time I have

been the beneficiary of the

I am proud to have been raised here, and to

type of corporate leadership

raise my children here. There is no doubt

like I just mentioned.

I am proud of the Indiana’s communities.

As an

that from the largest of our charitable orga-

example, when I was a young

nizations to the smallest, we are INVOLVED.

banker, a wise man told me:

We CARE. We GIVE BACK.

“Look, you have to be involved

in the Chamber of Commerce.

all in this together, and it is good for all of

That’s a given. It’s good for

our souls.

Keep up the good work, Indiana. We are

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