Eli Lilly and Co. wants the city of Indianapolis to give it more than $30 million in tax breaks on $400 million in projects that include a new manufacturing facility and improvements to existing operations downtown.
The Metropolitan Development Commission will weigh two Lilly requests for 10-year tax abatements totaling $30.6 million at its meeting at 1 p.m. Wednesday.
Over the last several months, the pharmaceuticals giant has rolled out plans for a manufacturing plant southwest of downtown Indianapolis where the firm will manufacture cartridges for insulin.
Construction is already under way for the 164,000-square-foot plant on South Harding Street, adjoining Lilly’s existing manufacturing complex known as Lilly Technology Center.
Lilly’s investment in the project is estimated at $320 million. In addition, it is planning a new inspection facility that will add another 30,000 square feet to the project, plus renovations to existing buildings on the Lilly Technology Center campus and to the Lilly Corporate Center. In total, Lilly’s investment is expected to reach $400 million.
As a result of the project, the firm said it will be able to retain 175 Indianapolis employees who will earn an average of $30.96 per hour, according to the abatement requests. Contrary to the request, Lilly spokesman Ed Sagebiel told IBJ the project would involve a combination of existing employees and new workers.
Lilly’s first request is for a 10-year abatement on $133 million in construction and renovations, which would create a real property tax savings of $13.8 million for the firm.
The other request focuses on $267 million in new equipment related to the new operations. The equipment would include cartridge filling and packaging lines, logistics equipment and a backup power supply. The personal property tax abatement would create a savings of $16.8 million for Lilly over 10 years.
Over the 10-year period of the two abatements, Lilly still would pay $25.4 million in taxes on the new construction, renovations and equipment. Once the abatement is over, the firm is expected to pay about $5.2 million in taxes annually on those items.
City development staff has recommended that the commission approve the abatements.
“In staff’s opinion, a project such as this would not be economically feasible without the tax abatement incentive,” according to a staff report to the commission. “Staff believes that the use of tax abatement is an appropriate tool to assist with this project and support continued development within Marion County.”
If the requests are given preliminary approval by the MDC on Wednesday, a public hearing and final approval will be scheduled for the MDC’s meeting on May 1.