State giving $345K incentive to Turner for company project

May 20, 2014

The Indiana Economic Development Corp. is giving Mainstreet Property Group an economic development grant of $345,000 for the construction of a nursing home in Terre Haute that is expected to net House Speaker Pro Tem Eric Turner $1.8 million.

The financial incentive was originally offered by the state so that Mainstreet, which is owned in part by Turner and his son, could move its headquarters from Cicero to Carmel. But now the grant will go toward the construction of a $15.3 million project in Terre Haute, one of many Mainstreet projects Turner helped save when he defeated legislation that would have banned the construction of new nursing homes.

Gov. Mike Pence had placed a hold on the state aid last year after The Associated Press reported Turner's connection to the company. But an IEDC review found "no conflict of interest" and cleared the money for the Turners.

John Mutz, a former Republican lieutenant governor and head of the IEDC panel that initially cleared the money for the company's relocation, said he had concerns about a state lawmaker benefiting from state tax dollars, but also did not think that should stand in the way of a good project being completed.

"Of course there's a concern," Mutz said. "In my mind, as a committee member, I want to know if somebody has an interest in these things. But that doesn't necessarily mean their business shouldn't get the credit."

At the center of the issue is Turner's ownership stake in Mainstreet and legislation proposed earlier this year that would have halted Mainstreet's construction of new nursing homes. In public, Turner recused himself from votes on the issue, but in private meetings of House Republicans he successfully lobbied against the ban.

The House Ethics Committee determined last month that Eric Turner did not technically violate any ethics rules, but decided that ethics rules need to be tightened because of concerns exposed by the situation.

The $345,000 from the state will now go toward the construction of a nursing home at the western edge of Terre Haute.

The Terre Haute nursing home is expected have about 75 to 80 beds. The project should create 123 permanent jobs and 350 construction jobs, according to Mainstreet. Mainstreet purchased the 5.7-acre property for the home from the city of Terre Haute for $1 million last year.

According to Mainstreet Property documents obtained by the AP, the company expects to spend $15.3 million completing the project and then sell it to a Canadian company started by Zeke Turner, Eric Turner's son, for $20.1 million.

The sale will be enough to net Eric Turner $1.8 million, according to a Mainstreet investment document obtained by the AP, as he owns 50 percent of a company that owns 76 percent of Mainstreet, giving him a 38-percent share of Mainstreet.

"As a passive investor in Mainstreet, Eric has no responsibilities regarding the day-to-day management and operation of the business," Turner spokesman Roger Harvey said in a prepared statement.

Mainstreet spokeswoman Kate Snedeker has maintained that Eric Turner has no say in how the company operates, and also that the state aid is being provided to the city of Terre Haute and not Mainstreet. IEDC spokeswoman Katelyn Hancock also said the grant was not being provided to Mainstreet.

But the September 2013 contract signed by the IEDC and the city specifies that Mainstreet will ultimately receive the $345,000. The city will act as a pass-through, giving the money to Mainstreet once it has completed expensive site preparations, including filling in a basin and driving in pylons around the site.

Josh Perry, an assistant professor of business law and ethics at Indiana University, said actions like the state's approval of money for Turner and lobbying in secret meetings of the House Republican caucus "erode the public trust" in government.


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