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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis is considering its first so-called “inclusive” economic development incentives for a business looking to build in the city.
About 10 months ago, Develop Indy, the city’s economic development agency, announced that beginning Jan. 1, it would change the way it awards tax abatements and other incentives to ensure that aid supports only companies offering jobs that will grow the city’s middle class and reduce poverty.
Instead of awarding economic development dollars based on the number of jobs a company plans to create and the investment it would make—a framework long used by cities and counties across the country–the city said it would focus on the quality of those jobs.
Now a company seeking a tax abatement must commit to the following: Paying $18-per-hour wages, providing access to health care benefits, and committing 5% of its tax savings to workforce support.
A speculative building project by Indianapolis-based Browning Construction would be the first tax abatement to utilize the inclusive incentives.
Browning, with partner Property Acquisition Partners LLC, plans to build a 127,400-square-foot speculative building on long-vacant property at 3952 N. Franklin Road.
The company would spend $6.7 million building a facility that would later be occupied by between one and four tenants that have yet to be identified. Those tenants would create at least 26 jobs paying an average wage of $18 an hour.
The building would be constructed in a corridor in desperate need of economic investment and job creation, city officials say, and it will be close to IndyGo Route 39 to ensure there’s transportation to the facility.
If approved, the developer would receive an eight-year tax abatement on real property that would save it $774,805, but the abatement could be extended to 10 years if Browning secures at least one tenant that aligns with the city’s target and opportunity industries or with the city of Lawrence’s Trade District Development plan.
As part of the deal, the company would donate 5% of its total tax abatement value (at least $38,740) to IndyGo for transit infrastructure by Dec. 31, 2023, to meet the workforce support commitment.
The Metropolitan Development Commission heard the proposal Wednesday and gave preliminary approval. The tax abatement will not need approval from the City-County Council but will need to be approved once more by MDC before being finalized.
Construction is expected to start in July, with project completion set for December.
The change to the way tax incentives are awarded is part of the city’s quest to achieve “inclusive economic growth” by growing opportunities for the city’s middle class and poor, and came as the result of years of research.
City officials determined the way to tackle economic exclusion is to increase the number of good jobs in Indianapolis for people without college degrees. To fit that definition, a job must pay at least $18 an hour, or $37,440 per year, and include employer-sponsored health insurance, according to a 2018 report by the Central Indiana Corporate Partnership and the Brookings Institution.
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This is a much needed, and improved, change to the use of taxpayer dollars. But it is being eroded in this first deal, as the story reports. Please note the significant difference between what the city wants, jobs that “pay at least $18 per hour” and what the story says the developer proposes to do: create “at least 26 jobs paying an average of $18 per hour.” A grade school math student would immediately recognize the difference. The city should enforce its stated policy of creating jobs that pay “at least $18 per hour,” not let it be dumbed down by using averages, which will have the effect of keeping poor people poor. And when the business is computing those “averages,” we should remember the ancient wisdom that “figures don’t lie, but liars figure.”
Thank your for pointing this out. I was thinking the same thing!