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Interactive Intelligence seeks city tax breaks for expansion

June 17, 2014

Interactive Intelligence Group Inc. is seeking nearly $2.6 million in property tax breaks from the city for a large expansion at the software developer’s Indianapolis headquarters.

The Metropolitan Development Commission will hold a preliminary hearing Wednesday on two sets of abatements for Interactive’s expansion, announced May 1.

The company plans to hire 430 people over the next three years at an average wage of $31.25 per hour, or $65,000 per year for full-time employees, according to the abatement request. Interactive would retain 970 workers at the same wage, it said.

If approved, the city would reduce Interactive's real property taxes for 10 years for a total of $1.8 million in savings on the $12.4 million real estate investment.

The company would pay an estimated $781,200 in real property taxes over the 10 years, plus roughly $272,000 annually after the abatement expires.

Interactive also is seeking another decade-long tax break worth $764,100 in personal property taxes on $10 million in new information technology equipment. The company would pay an estimated $285,900 in personal property taxes during the abatement period, plus $90,000 annually after the abatement.

The tax breaks would stack onto $8.3 million in state tax credits and $300,000 in training grants the Indiana Economic Development Corp. offered Interactive, assuming the company meets its hiring commitments.

The investment and wage amounts cited in the city abatement requests are lower than those announced by the state in May, when the company said it would invest $28 million and create jobs paying $80,000 per year on average.

Interactive began negotiating with city officials long before executives knew the actual cost of expansion, so the company used preliminary figures when it applied for the local tax breaks, said Chief Financial Officer Steve Head.

If approved Wednesday, the resolutions would move on to the July 2 MDC meeting for a public hearing and final approval.

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