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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowProperty tax abatements granted by the city of Indianapolis last year should help create more jobs than in each of the previous three years.
Numbers released by the city for 2008 show companies receiving abatements committed to 2,423 new jobs. Among the projects:
– AIT Laboratories plans to create more than 130 jobs in the next five years and invest $9 million in a new pharmaceutical division at its operation near the Indianapolis International Airport.
– EnerDel Inc., an Indianapolis battery developer, is undertaking a $100 million expansion expected to create 277 jobs. Another 478 are anticipated at a manufacturing plant it plans to open in the area.
– ExactTarget Inc., an Indianapolis e-mail marketing firm, plans to create 300 jobs downtown within five years via a $25 million expansion.
– GyanSys, an Indianapolis software consultant, said it will add 139 employees by 2014 and invest $3 million to build a headquarters near the Marion-Hamilton county line.
– Trimedx LLC, a locally based firm that maintains and manages clinical health care equipment, plans to add 108 positions as part of a $1.4 million expansion.
The number of companies expanding or locating here is helping to offset heavy job losses incurred by local manufacturers while also bolstering the city’s life sciences initiative. Yet Mayor Greg Ballard vowed during his campaign to more closely scrutinize abatements as the city’s tax base continues to decline.
“That is the thought,” said Scott Miller, CEO of Indianapolis Economic Development Inc. “We’re going to look at what we can do to keep jobs here and, yet, we can’t give away more tax money than what we’re bringing in.”
Tax abatements provide significant reductions in a business’s property taxes for as many as 10 years and are considered an attractive incentive in a troubled economy.
But economic development proponents say abatements play a minor role in a company’s decision to expand or relocate. An educated workforce, location, facilities, business costs and the overall tax environment typically top the list, said Ron Gifford, CEO of the Indy Partnership, the group responsible for marketing Indianapolis as a good place to do business.
“The incentive piece that state and local government are able to provide is really a relatively small number compared to what the company is putting in,” he said. “They don’t drive the decision because the dollar amounts are not a major component of the total cost.”
Companies receiving abatements last year collectively committed to $242 million in investments, while they are set to receive $14.9 million in city tax breaks.
The 2,423 jobs promised last year topped the 2,001 jobs pledged in 2007, as well as 866 in 2006 and 1,069 in 2005.
Abatements granted in 2008 are also expected to help retain 4,166 jobs.
It’s unclear how the economic downturn in the second half of the year might affect the commitments made by companies that got abatements. The abatements can be altered when companies don’t follow through.
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