Hilliard is doing better than most communities, but things may get worse before they get better, according to Mayor Don Schonhardt and economic development director David Meeks.

Hilliard is doing better than most communities, but things may get worse before they get better, according to Mayor Don Schonhardt and economic development director David Meeks.

Schonhard said the city held its own in 2009 but the full impact of the economic downturn may not be realized until 2010.

"The public sector tends to feel the effects of a negative economy later in the cycle than the private sector, (which) indicates that next year will be a difficult year, budget-wise." Schonhardt said. "I think we've tried to cut back our expenditures as much as we can without having a negative impact on the service we provide to the residents. The (staffing) vacancies that we have are not being filled, and should vacancies occur next year, those would remain vacant, provided they are not absolutely critical. So I think we're doing all that we can do. We've made tremendous progress in the last several years."

Meeks said the considering the economy, Hilliard weathered the economic storm in 2009 but cautioned that tough times could still lie ahead.

" In '09, we did alright," he said. "Our income tax seemed to hold up. We've done a good job still attracting some new businesses in '09, and some very high quality payrolls, which is what's helped us. There's still a lot negative that could happen. "

While unemployment rates climbed on both the state and national levels in 2009, the impact on Hilliard hasn't

Been dramatic to date and no major layoffs have been announced by Hilliard-based companies.

"We may have some of our residents who worked in other parts of (Franklin) County that may have been impacted, but if you look at county-wide unemployment, I would guess that Hilliard's unemployment rate is actually less than the county as a whole," Schonhardt said. "We know some of our companies are still hiring people."

Meeks said establishing relationships with commercial real estate brokers has been important in the city's efforts to attract quality businesses. However, he says he hasn't found much encouraging news on the new construction front heading into 2010.

"In the past, we've been pretty successful focusing on the commercial real estate sector, specifically the (brokers)," Meeks said. "My focus has always been to get them to at least shop their deals in Hilliard, and we'll continue to do that. The deal pipeline is not flowing the way it was a few years ago, and I don't expect to see a whole lot of activity next year. I've stepped up my networking with the commercial real estate sector and the developers, but you hear the same stories with them: They're not real optimistic. I don't see a whole lot happening from new construction next year. But those deals that do come in, we'll be extra aggressive on it. We'll still be creative in the way we approach deals and incentives to try to add value."

Schonhardt asid Hilliard is still being shopped, there are just fewer deals being shopped.

"Competition for the few deals out there is a lot tougher than it was a few years back," he added.

Meeks said it's important to remember that Hilliard still has the basics on its side.

"We've got a good location close to downtown (Columbus), our work force demographics are phenomenal, especially for the types of businesses that tend to be attracted to central Ohio and the northwest outerbelt area," he said. "We're in a very good competitive position there. It's just that you have a lot of space on the market. A lot of communities are also very hungry for the same deals. The phone doesn't ring nearly as much. My Rolodex is changing significantly because a lot of the guys in the commercial real estate sector are looking for work in other areas. That'll change as things come back."

The use of tax abatements to attract businesses to Hilliard isn't nearly s common as it once was.

"We've had two, maybe three, the whole time I've been here, and they were only for the biggest deals we could put together," Schonhardt said. "Abatements are kind of the last resort in the toolbox of incentives. We prefer to be a little more creative in what we offer. Our incentives are really designed around encouraging businesses that want to stay and want to grow to come to Hilliard."

Meeks said the emphasis has changed to income tax incentives for job creation.

"The one we use the most is the income tax job creation incentive," he said. "You set an annual number of jobs, this amount of income tax paid, withholding taxes and payroll, and if they hit it, they get the incentive. It tends to work pretty well."

Tax Increment Financing agreements (TIFs) have also become an important economic development tool for Hilliard.

"We use tax increment financing to cover our needs to build our roads," Meeks said. "That's how we've gotten Trueman Boulevard, Britton Parkway. All of our prime commercial land is now accessible, where it was not three years ago."

Overall, Schonhartd said he is concerned that the full impact of the economic downturn may not have been felt by the city yet.

"I think things in general will get worse before they get bette," he said. "I think we have put the city on a path for the past several years of improving our efficiency while reducing our overall costs, which should allow us to weather the storm better than most (other communities). I do think it's going to be a while before we see any kind of improvement that will lead us on a path that will start showing increases across the board in revenue sources. We have to propose budgets that take into consideration the fact that we're not going to receive certain of these revenues in the amounts we've received them in the past. Therefore, we have to prioritize our needs more cautiously."

Schonhardt said Hilliard is "prepared for the worst. We've hoped for the best, and if things improve, we always have the ability to grow the budget. But you don't want to be prepared for the best, have the worst hit you, and then have to address it. So I think we've presented a budget that's really conservative, pretty bare-bones. When council's been given a budget like that, it's difficult for them, because we all have projects we'd like to get involved in, but you also have to be realistic in times like these. We need to provide the basic essential services that the people expect from their government, and wait for those better times to return to provide some of the more feel good-type programs."

Meeks said that as economic development comes, the city can focus on quality of life issues that enhance the overall experience in Hilliard.

Schonhardt said the city has seen some minor reductions in state funding, mostly in the capital arena.

" We get a couple of grants within the police department for operations, but most of what we get is Ohio Public Works Commission money for the Triangle project," he said.

Meeks said the city will receive some stimulus money from the federal transportation bill, but those funds are tied to a commercial development project, so it could be a while before they can actually access that money.

"We had half a million approved in the state capital budget for First Responders Park, so we'll begin using those funds next year," Meeks added. "We didn't apply for any Community Development Block Grants this year from the county, although typically in the past, we've gotten about a quarter million a year for various projects. But it's all project-driven."

What kinds of projects will residents see in Hilliard in 2010?

"2010 is going to be tough," Meeks said. "The job situation could get a little worse. For us, a lot of it hinges on commercial lending, and at this point, I don't see it loosening up. The banks say they're lending, but for commercial projects, they're not."

Schonhardt said Hilliard will see benefits from the construction projects it has undertaken - Northwest Parkway and the Triangle - because those will bring construction payrolls into town.

Meeks said there may be activity related to medical projects, such as those on Trueman Boulevard, we may and the west side of town, including the $15-million Hilliard Care Center, a nursing home on Davidson Road, that is expected to produce75 jobs.

"That'll be completed in 2010," Meeks said. "The first of the year, you'll see a medical office building coming to Hilliard. (Doctors) no longer want to lease, they want to own their buildings. As our population continues to age, their services will be more in demand, so that's a good industry to have in town."

Schonhardt said Hilliard is ready for future development.

"The nice thing is we're poised," he said. "We've got a lot of prime zoned commercial property out there that's serviced by utilities that wasn't there four years ago."

Meeks agreed with that assessment.

"We're definitely not trying to dig out of a hole," he said. "The fact that we do have all this infrastructure - we got it all completed before things really went downhill, and the way we did it is because we were creative in the way we had it built with the developers picking up a lot of the risk, as a city we didn't overexpose ourselves. We're in a very good position to respond quickly to any prospects that do come along. I'm still cautiously optimistic for 2010 that we can see activity in some areas."

Councilwoman Kelly McGivern said the city has had to deal with economic challenges similar to those facing its residents.

"Unfortunately, Hilliard residents, business and the city are all still feeling the pinch of the problems with our economy," McGivern said. "During the campaign, I heard directly from our voters that they are concerned with rising costs and what lies ahead. Like many of our citizens, the city has had to reduce and prioritize our spending and reallocate some money to see us thought these difficult times. While there will likely continue to be downward pressure on our economy and our savings will not be what it once was, Hilliard is in a positive position to continue to attract new businesses and the jobs they bring and help our existing businesses weather the storm. What will ultimately keep all of us going are support from our neighbors, a positive attitude and a strong vision of where we want our community to go."