Discussion at Local Meeting: Financial Allocation and Javelin Amusement Center

Discussion at Local Meeting: Financial Allocation and Javelin Amusement Center

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Put on your thinking caps, folks! Thomas Heil, treasurer of Kreis Viersen, kicks off his lecture with a grim warning: things are looking rough. He's one of the speakers at the Regional Forum Kreis Viersen, invited by the Industry and Commerce Chamber (IHK) Mittlerer Niederrhein, under the title "Economic Development of Kreis Viersen."

"With the upcoming municipal elections in the fall, it's worth taking a look at the economic room for maneuver and challenges we face in Kreis Viersen," said Rainer Höppner, IHK Vice President and spokesperson for the Regional Forum. He's got his eyes on the financial situation of the Kreis and the Javelin Park project, which could provide some economic lift and bolster the Kreis' finances.

Taking the treasurer's somber announcement lightly would have been a mistake, as the next 60 minutes made clear. "The situation is dire," explained Heil. With Germany predicted to have zero growth, municipal finances are set to feel the heat, as they will in Kreis Viersen, too.

Overall, municipalities in Germany recorded a deficit of 24 billion euros last year (2023: 6 billion euros). "That's the highest value since reunification," said the treasurer. NRW is leading the pack, as municipal debt in the state has increased by 13 percent from one year to the next. Of the 396 cities and 31 districts in NRW, only 15 have a balanced budget. "Thus, municipalities are consuming their equity to cover the deficits."

Kreis Viersen isn't off the hook, either. The Kreis budget shows a deficit of 40 million euros for the current year, after 30 million last year. If the deficit were passed on to the Kreis municipalities, the Kreis surcharge would have to increase by 7.5 percentage points. But even the nine Kreis municipalities are in poor shape: none have a balanced budget, one of them is in the budget security concept.

"The problem is that tax revenues are only growing moderately, while expenditure is skyrocketing," explained Heil. The largest part of this, 400 million euros, is the costs in the social sector.

So, what's the way out of this financial predicament? Heil lays out demands such as a fundamental overhaul of the existing social benefit system, adequate financing from federal and state governments, an increase in the municipal share of VAT, and the implementation of the principle of congruence. Although these demands would require budget sacrifices from the federal and state governments, Heil remains hopeful for change.

Now, over to André Banschus with his report on the development of the Javelin Park. It's not all smooth sailing for this project, either. "The infrastructure works should have started by now," explained the CEO of the project developer Verdion. However, the Higher Administrative Court of Münster has provisionally suspended the building plan following an urgent application. "We cannot say at the moment how long the court will take to review the documents. But we hope to receive a positive response soon."

Despite the setback, Verdion intends to stick to the schedule. "Otherwise, potential investors might look elsewhere." Over the next ten to fifteen years, Verdion plans to develop tailor-made buildings on 650,000 square meters of the 58-hectare site for high-profile companies, particularly in the production, pharma, research, and e-commerce sectors.

With a Canadian pension fund as the financing partner and a focus on sustainability, Verdion aims to crack the code on job creation: around 5,000 direct jobs, to be precise. The location near the Dutch border and proximity to airports, ports in Duisburg, Rotterdam, and Antwerp, as well as the cities of Cologne and Düsseldorf are crucial selling points.

While NRW.BANK in North Rhine-Westphalia offers programs like "NRW.BANK.Invest Zukunft," which supports companies investing in sustainability, digitalization, and innovation, it remains to be seen whether Kreis Viersen and the Javelin Park project can benefit from such initiatives. IHK Vice President Höppner expressed hope that the hurdles for the Javelin Park can be overcome quickly, so the project can continue to move forward.

1. Investors looking for opportunities in the Lower Rhine region might consider the Javelin Park project, as it aims to bring high-profile companies in the production, pharma, research, and e-commerce sectors, with a potential creation of around 5,000 direct jobs.
2. In light of the dire financial situation many municipalities in Germany, including Kreis Viersen, are facing, calls for reform are increasing. Heil, the treasurer of Kreis Viersen, has advocated for a fundamental overhaul of the social benefit system, adequate financing from federal and state governments, an increase in the municipal share of VAT, and the implementation of the principle of congruence to help address the issue.
3. The real-estate sector in the Lower Rhine, such as the development of the Javelin Park, could potentially attract significant investments from financing partners like Canadian pension funds, given the strategic location near the Dutch border, close proximity to airports, ports in Duisburg, Rotterdam, and Antwerp, and nearness to major cities like Cologne and Düsseldorf.

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