ELKHART — Community leaders are addressing the elephants in the room: Diversifying the economy, creating housing options, and attracting and retaining talent.
These are issues that have been discussed for years, and yet RV manufacturing continues to dominate local business, tens of thousands leave Elkhart each day after work, and the city has seen little population growth in the past two decades.
But if city officials are successful, that will soon change. How? Through the Elkhart 2040 plan.
After a diversification study by the Indianapolis consulting firm Thomas P. Miller & Associates made the issues clear, the city this summer decided to hire that same firm, as well as local Insight Strategic Concept, led by its president and founder, Shelley Moore.
Moore first got involved in the early steps of Elkhart 2040 in 2018, when Mayor Tim Neese asked her to form a business advisory council that would put local business leaders and the mayor in the same room on a monthly basis. That was supposed to create more structure around what the plan should be for Elkhart’s economic future.
“And Elkhart has never had an economic development plan,” said Moore.
That is not uncommon for a city of about 50,000 people, she said, but if you want to develop and grow, you have to put a plan in place. So rather than establishing the business advisory council, efforts should be made to create a long-sighted plan for the city’s economic development, she said.
Exactly what that plan, which is costing the city $320,000, will include is about to be determined, but the overlying theme is “Making motion, moving people.”
That means industry diversification, talent development, entrepreneurship and innovation, according to Moore.
“All those I would consider to be the components of common, almost old-school, economic development,” she said. “How are you building business and industry, how are you building a workforce to create jobs, and how are you attracting a workforce.”
But economic development has changed. People don’t move for jobs to the extent they used to, according to Moore. Millennials move to where they want to live, meaning that a city like Elkhart can have plenty of good jobs but still have trouble attracting new residents if the city is not an attractive place to live.
“We have not invested in ourselves in placemaking initiatives,” Moore said.
But that is changing. The city and private investors are spending millions on redeveloping the River District, which is becoming a walkable community that will see more than 1,000 new housing units built over the next few years, with many of them already under construction. The Elkhart Health & Aquatics Center, which opened this summer, is meant to attract people from across Michiana and create business for nearby shops and restaurants.
Aesthetics, streetscapes, walkability, parks and use of the river are some of the key focus areas in making Elkhart a place where people want to live, Moore said.
“So we really feel like the River District is the beginning of doing that,” she said.
If the plan doesn’t work, the future could be bleak. Cities that don’t grow eventually will start seeing a decrease in population, she said, and that is difficult to stop.
“Once that momentum starts to go down, your survival rate becomes diminished. It’s like anything in physics – when downward momentum starts, it’s harder to bring it back up again,” she said. “Now is our time to be proactive.”
As for the local economy, the diversification study suggests it is necessary. Sixteen of the city’s top 18 “core industries” are RV-related. That’s great in good times but catastrophic in bad ones, as seen during the Great Recession, when the unemployment rate in Elkhart reached a national high.
Now, as Elkhart sets the standard for low unemployment rates, that’s a problem too, because thousands of jobs go unfilled, limiting the productivity of local businesses.
And the RV industry isn’t going to stick around, Moore believes, in part because of the lack of available workers.
“They will have no choice but to built plants elsewhere, where there is people,” she said.
She said not to count on the RV industry to be the economic engine of Elkhart forever.
“It will leave, just like pharmaceuticals did, and band instruments and manufactured homes and marine. It’s only natural,” she said.
One of the areas being targeted is the southwest industrial cluster, which was approved as an Opportunity Zone last year, allowing for tax incentives under the Tax Cuts and Jobs Act of 2017.
Moore said the area could become an innovation district. Industries that could take advantage include distribution, health care, advanced manufacturing and IT, she said. Exactly what the city would like to happen will be up for discussion in the coming Elkhart 2040 discussions.
The Elkhart 2040 team consists of three groups that will be launched this month, each group focusing on industry diversification, talent optimization, and land use and infrastructure, respectively, while also making sure benefits and findings from each area can translate to the others. They will all come together on a monthly basis.
Thomas P. Miller & Associates will lead the diversification and talent teams, while the local firm Jones Petrie Rafinski will lead land use and infrastructure. The teams will work through the first quarter of 2019 to identify up to four main projects that should be next for the city, Moore said.
But with Neese’s announcement at the end of 2018 that he is not seeking a second term as mayor, the city will have a new leader come Jan. 1. Neese, a Republican, and his chief of staff, Bradley Tracy, are working with both mayoral candidates to prepare for the transition, and Tracy said the administration wants to work with both Republican Dave Miller and Democrat Rod Roberson on the 2040 plan.
“You’re going to see one of the smoothest transitions you’ve seen, I promise you,” he said.
He has met with both candidates, as has Neese. That will continue for the rest of the year, and Tracy expects they will now have more to talk about, since the Elkhart 2040 contract was signed last month.
There will almost certainly be disagreements about where the city is going now and in what direction it should be steered. Tracy, for instance, doesn’t agree with Moore’s view of the RV industry’s future here. He said one aim of the plan should be to ensure that RV manufacturing doesn’t go the same way as pharmaceuticals or band instruments.
Much has happened in Elkhart in recent years, most visibly in the River District, but Elkhart 2040 will also look to the city’s various neighborhoods. For instance, in the southwest district, there will be a focus on affordable housing, according to Tracy.
“If you’re going to take an opportunity zone and build business around it, you have to have neighborhoods around it, (so) people can work to support that industry,” he said. “I have not been in a meeting, we’re talking about economic development, that did not include housing.”
And it’s not going to be just talk, according to Moore. The team will create measurable goals and publish the scorecards.
“So that we can really prove to the community that we’re achieving success in all neighborhoods,” she said.
Beginning by making the River District a walkable and vibrant community to create momentum was vital, and so is keeping the momentum going, according to Moore.
“We haven’t had a city that’s reinvested in itself for some time,” she said. “We have a lot of catchup to do.”
Follow Rasmus S. Jorgensen on Twitter at @ReadRasmus