Monday, July 13, 2009

EDC chief: Incentives may pay off

By Keith Lawrence, Messenger-Inquirer
Published: Monday, July 13, 2009 12:02 AM CDT

The Greater Owensboro Economic Development Corp. is targeting customer support and call centers as it works to bring more jobs into the community.

And new economic development incentives passed by the Kentucky General Assembly last month will help with that and other recruiting efforts, said Nick Brake, EDC president.

"The legislation created a new incentive program for communications and computer systems," he said. "That helps with headquarters types of businesses. We hope to attract some of those to Owensboro. We're recruiting back-office operations now."

Brake said Kentucky's "incentives have always been for new manufacturing plants with a large volume of jobs. But we're changing to accommodate small businesses because most jobs are created by small businesses."

With the new legislation, he said, creating 10 or more jobs can trigger incentives.

For companies locating in older parts of the city, Brake said, historic preservation tax credits have been extended.

In the past, Kentucky had a pool of $3 million worth of credits statewide. That was increased to $5 million.

"Generally speaking, expanding incentives to include creative industries and computer/communications equipment is very significant," he said.

Kentucky has lost nearly 100,000 high-paying manufacturing jobs -- one-third of the total in the state -- since 2001, the Kentucky Association of Manufacturers said recently.

"The reality is that manufacturing is becoming more efficient, more high-tech and that has caused fewer jobs," Brake said.

The new incentives will reinvest in manufacturing and job maintenance programs, he said.

"In the past, we had an incentive program for the automotive industry," Brake said. "Now, it focuses on all manufacturing. The incentives can be used for new equipment and new training."

Area aluminum companies can benefit from the new incentives as can The HON Co., an office furniture company that is studying the future of its Owensboro plant, he said.

"We've been making calls to HON's corporate offices," Brake said. "We're trying to make a difference."

He said the new incentive programs also target small business development -- for companies with 50 or fewer employees. Incentives are available for both new and expanding small businesses, Brake said.

Madison Silvert, EDC vice president and executive director of the organization's eMerging Ventures Center for Innovation, said several of the start-up companies he's working with will qualify for the new incentives.

"It's a great tool," he said of the incentive program.

"We have a couple of new businesses looking at the incentives," Brake said. "But there's a lot of policy work still to be done on implementing the incentives" by state officials.

The new incentives include companies that upgrade facilities, retain at least 85 percent of their jobs and make a minimum investment of $2.5 million. The companies can recover up to 50 percent of equipment costs and all of their training costs.