Crown Point's economic development strategy of offering loans to businesses as bait for economic development needs an overhaul.

The strategy crafted during then-Mayor Dan Klein's administration was to offer substantial loans to promising businesses -- Plasmatronics and Brogan Pharmaceuticals -- to lure them to Crown Point.

As it turns out, the loans went sour.

The city is out $880,000 and doesn't have the high-paying jobs those companies were to provide.

It's a complex conundrum: How can communities get businesses to take the risk of locating there without putting the community's own resources at risk?

Crown Point Mayor David Uran isn't ruling out loans as a possible incentive, but he should treat them as just one of many tools in the drawer.

The second-guessing of the Plasmatronics and Brogan Pharmaceuticals failures have brought to light some flawed assumptions.

The Crown Point Redevelopment Commission isn't empowered to make loans, so the Crown Point Development Corp. was established to funnel public money to private corporations as necessary to recruit them.

When Crown Point saw New York-based Plasmatronics was being offered $1.23 million in tax credits from the Indiana Economic Development Corp., it emboldened the city to take the risk.

But the IEDC wasn't taking as big a risk as the city because its tax credits are performance-based. Plasmatronics didn't meet the IEDC's targets, so Plasmatronics never received money from the IEDC.

Now that Crown Point officials have struck out twice in making loans to private companies looking to locate in the city, Crown Point -- now under Uran's leadership -- should now rethink its economic development strategy to improve the odds of getting good results from its investments.

If the city continues giving loans, it needs to get strong guarantees.