City calls off Haverstick, Redcats tax incentives

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Two Indianapolis companies that received tax-abatement agreements from the city in 2007 have had the incentives canceled for failing to meet investment and employment goals.

The city’s Metropolitan Development Commission on Wednesday voted to rescind the abatements given to Haverstick Consulting Inc. and Redcats USA.

Haverstick, a defense-consulting firm whose financial backers include former Conseco executives Stephen Hilbert and Rollin Dick, was acquired by Kratos Defense & Security Solutions Inc. of San Diego in 2007 for $90 million.

Haverstick agreed that over six years it would invest $1.1 million in operations and hire 40 employees at an average hourly wage of $34.50, in addition to retaining 68 employees at an average hourly wage of $37.65.

As of the end of 2010, Haverstick had made $680,000 in investments and had total employment of 36, prompting the city to start the process to cancel the incentives.

The company received $2,558 in tax savings of an estimated potential of $64,516, the city said.

Haverstick referred questions to its San Diego headquarters, which did not return calls from IBJ.

Meanwhile, New York-based Redcats USA agreed to spend $21 million over eight years to upgrade its clothing-catalog operation on Southeastern Avenue. The company also said it would add 42 jobs to the nearly 900 workers employed at the site and a warehouse in Plainfield.

The new jobs were expected to pay an average hourly wage of $31.40 and the 894 retained jobs were supposed to pay an average hourly wage of $26.90.

As of the end of last year, Redcats had made $6.2 million in investments and had total employment of 692, according to city officials.

The company received $52,439 in tax savings of an estimated potential of $1.8 million, the city said.

Calls to Redcats Southeastern Avenue facility were not returned.

The city said both companies agreed to terminate their abatements.

The Indiana Economic Development Corp. offered both companies training grants. Redcats received $142,560 and is no longer eligible to receive more state funding, an IEDC spokeswoman said. Haverstick received $8,800 and also is no longer eligible for additional state funds.


  • It's called common sense
    Companies don't hire in down economies, so stop playing the silly "Occupy" card with the 1 percent. Perhaps if this administration wasn't adding new regulations every day, our capital-intensive companies could sell more and then, consequently, hire more.
  • Lost jobs
    So am I reading this right? Both companies promised to add jobs to the existing jobs that were here, and instead they reduced the number of jobs in total. So much for the job-creating one percent.
  • Wage
    I worked at Redcats for 31 years. My top salary was $16.90 at retirement. Had I been making $31.40 an hour, I would still be working, no matter how much pain I was in! Unless, they are including all of the benefits one gets as an employee.
  • Really?
    Meanwhile, the same city gives Rolls-Royce $22M that has basically no commitments for jobs or investments.
  • Back taxes
    Do can the city get back taxes from these deals? I'm pretty sure they'd come after little-ol-me if it were the case.

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.