How Economic Development Projects Result in a High Return on Investment for the Community
Wednesday, March 23, 2022
Economic development directors are often asked exactly what it is that they do . . . or more directly: “where does the money go?” In a small town setting, it can be hard to decipher how dollars spent on items such as infrastructure not only lay the groundwork for a sustainable economic future but benefit the entire community at large.
In the simplest terms, a local economy is built on money changing hands many times as it flows through the community to create overall prosperity enjoyed by all of its residents. Economic developers, business owners, and the community all play their roles. Businesses operate by purchasing goods and services as they also provide jobs. Their workers purchase goods and services they need to live with the wages they are paid. Behind it all, economic development corporations are creating a business climate that helps existing businesses and attracts new ones.
Economic Development Corporations
Economic development corporations work to support success for existing businesses and to attract new ones. They do this by helping to connect business owners to capital, resources, and incentives, in addition to site development, problem-solving, and marketing the community.
Greg Laudadio, Interim Director of Palestine Economic Development Corporation broke it down. “Businesses often need upgraded infrastructure to operate. Large capacity water, sewer, and natural gas services and higher voltage electric utilities might be a requirement. To help incentivize a project, economic development often assists with the cost to upgrade these utilities. Although upgrades may seem expensive, the return on investment can be very high.”
“For example, a one time investment of $50,000 to upgrade sewer pumps at a lift station that would allow a new convenience store to go in can yield over half a million dollars in property and sales tax revenue over a ten-year period,” said Laudadio. “A $30,000 waterline extension to allow a restaurant to locate at a prime spot in a high traffic area can yield over 1 million dollars in that same timeframe. In addition to the tax revenue generated, new jobs and ancillary services also help boost the local economy and add to that return on investment.”
As touched on by Laudadio, businesses provide more than just the goods and services the community needs. Strong businesses also pay taxes that go for vital services such as schools, roads, fire, and police. They are a vital part of the social fabric of the community — investing in it and shaping the community’s culture. These actions and contributions, along with supplying employment opportunities, provide tremendous growth potential for residents.
A vital community is an employed community. Jobs retained and added can often be directly traced to the forethought, planning, and efforts of economic development. A strong tax base means services and amenities for residents such as parks, good roads, desirable schools, robust infrastructure, public safety, and housing. A strong local economy helps to insulate communities from fluctuations in state and federal budgets. All of this adds up to a place people want to live and work because of the high quality of life.
Economic Development Benefits
It may be hard to connect the dots between a sewer line update and the development of a new park on the opposite side of town, but that is what economic developers do. They see the big picture and progress projects with high returns on investment for the entire community. Smartly planned economic development:
- Maintains, increases, and diversifies the tax base
- Increases revenues faster than the cost of municipal services increase
- Solidifies business retention
- Spurs economic vitality
- Diversifies commercial and industrial areas
- Maximizes property through highest and best use
- Increases per capita income through job retention and creation
- Promotes self-sufficiency in the face of state and federal budget issues
- Builds beneficial partnerships between local governments, businesses, and community members
Palestine Economic Development Corporation
Palestine Economic Development Corporation’s mission is to promote and facilitate responsible commercial and industrial business retention and growth that expands, diversifies, and strengthens the local tax base while enhancing local amenities and destination attractions throughout the city of Palestine.
To learn more about incentives and opportunities in Palestine, Texas, contact the PEDC at 903-729-4100 or by email. We are prepared for growth and ready to provide immediate and customized assistance. Explore our available properties here.