CHICAGO — Moving a business to Indiana can result in big cost savings, Secretary of Commerce Victor Smith told a crowd Wednesday at the Real Estate Publishing Group's Commercial Real Estate Forecast in Chicago's Loop.
How big?
Hoist Liftruck, which recently relocated its forklift manufacturing operations from Bedford Park to East Chicago, told Smith it expected to save $1,000 a year per worker on workman's compensation costs alone.
"Do the math," Smith said. "With 500 workers, figure out how much accumulated cash that would add to a balance sheet over a decade. That's generational money."
Indiana currently has the second lowest workman's comp expenses in the nation but should have the lowest next year, after Indiana paid $320 million into it, he said.
Smith, the Northwest Indiana Forum and other local economic development officials spoke at a private luncheon, which was attended by dozens of developers, site selectors and commercial real estate brokers. They had just listened to Illinois Gov. Bruce Rauner and others at the conference event itself, which attracted hundreds of real estate developers from all over Chicagoland.
Valparaiso Chamber of Commerce President Rex Richards talked up his city, highlighting how it recently won Google's eCity award, landed a $270 million Pratt plant, and has $2 million in cash reserves.
"(Illinois Gov. Bruce Rauner) talked earlier about how he was trying to build that culture," Richards said. "Well, we've been living that culture."
A common knock on Indiana is that it doesn't have anything, but Valparaiso has industrial property within city limits that's represented by major firms, including NAI Hiffman and Jones Lang LaSalle, Richards said.
Last year was a record year for economic development in Indiana, Smith said. More than 320 companies decided to expand in or relocate to Indiana, pledging to invest $4.79 billion and hire 26,555 workers over the next few years. The state also hit a peak in private-sector employment with more than 2.6 million jobs.
"I'm happy to say at the end of last quarter we hit that mark, and more Hoosiers are working than any time in our 200-year history," Smith said.
The state's economic development agency, the Indiana Economic Development Corp., is now being pickier about which jobs it tries to attract. Smith said the goal is to lift Indiana's average income, which the U.S. Census Bureau says ranks as the 39th lowest nationally.
Indiana is no longer offering state incentives to companies that offer wages like $7.86 an hour or $9.72 an hour, but it stresses its friendly business climate and low tax rates still make it cheaper to do business here, Smith said.
"We are intentionally doing that to try to lift the average wages for Hoosiers and bring in a higher level of investment," Smith said.
The IEDC courts advanced manufacturing to build on Indiana's legacy as a blue-collar state where the percentage of the workforce working in manufacturing leads the nation. But the state economic development group has been working to build up sectors such as aerospace, orthopedics and information technology. Roughly 27 percent of IEDC-incentivized projects last year were in IT, and the cloud computing company Salesforce now has its second largest office in the world in Indianapolis.
"We're very aggressively going after those markets," Smith said. "People from Indiana tend to be fairly modest ... We use third-party data, show the effect on the balance sheets and let the facts talk for themselves."