Rolls-Royce and Factories and Manufacturers and Manufacturing & Technology

Rolls-Royce moving 2,500 workers downtown

March 15, 2011

Rolls-Royce Corp. said Tuesday it will move 2,500 employees to a downtown Indianapolis office building on South Meridian Street formerly occupied by Eli Lilly and Co.  

The British-based firm said it will begin relocating employees from its other locations in the Indianapolis area later this year. Terms of the agreement were not disclosed.

City officials praised the decision, saying Rolls-Royce will invest about $20 million to modernize and occupy the vacant downtown building and is contemplating additional investments of as much as $190 million in its other local facilities.

In November, Rolls-Royce, an aircraft engine-maker with more than 4,000 employees in Indianapolis, announced it had begun talks with Lilly about occupying its 465,000-square-foot Faris campus. Last summer, Lilly began moving the 1,000 employees who worked there amid staff cuts and a push to consolidate employees.

“We’re committed to creating a competitive environment for the future right here in Indianapolis, and this consolidation is a critical part of our efforts,” John J. Gallo, Rolls-Royce’s executive vice president of business operations, said in a prepared statement. “Currently, we have office staff spread across multiple locations. Bringing these employees together will improve collaboration and productivity as well as reduce our overall operating costs.”

The move into what will be called the Rolls-Royce Meridian Center affects office staff only. Production work will continue at the manufacturing centers in Indianapolis, and efforts are under way to improve those facilities as well, Rolls-Royce said. The company has a dozen locations in central Indiana.

“Rolls-Royce’s decision to invest in downtown Indianapolis will build upon our strong city center and demonstrates clear recognition of the vibrancy of the city’s core,” Indianapolis Mayor Greg Ballard said in a prepared statement. “This is a win for downtown businesses and our economy.”

Rolls-Royce reached the agreement with Lilly with assistance from the city of Indianapolis, Develop Indy and the Indiana Economic Development Corp.

Develop Indy, the local economic development agency, said it will support a request for a 10-year tax abatement on the property. Develop Indy and EmployIndy also will provide $50,000 in training grants, and the state will provide $250,000 in training grants.

Officials said the city will collect an estimated $22 million more in tax revenue over 10 years as a result of the move, despite the tax abatement.

Lilly began construction on its $58 million Faris campus in 2001 with development partner Kite Realty Group Trust and it opened the following year. The campus includes the renovated Faris and Brougher buildings, a new 150,000-square-foot office building and a parking garage—all west of Meridian Street between Merrill and South streets.

In January, real estate experts told IBJ the downtown space is a big upgrade from London-based Rolls-Royce’s current facilities, which are spread across Indianapolis’ southwest side and in Plainfield.

Parking was identified as a possible sticking point, since the Faris garage can accommodate only 1,550 cars, but a Rolls-Royce spokesman said street-level lots adjacent to the property will make up the difference.

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