IBJNews

City considers whether to revoke 3M tax break

Back to TopCommentsE-mailPrintBookmark and Share

The city of Indianapolis could claw back more than $265,000 in property-tax breaks granted to a local division of the 3M Co. that fell short of its employment commitment.

Minneapolis-based 3M spent nearly $16 million in 2008 on buildings and equipment for Aearo Technologies, which designs and makes acoustical composites, but hasn’t hit hiring targets set out in a seven-year tax-abatement.agreement.

Aearo reported to the Department of Metropolitan Development that it has 354 employees, short of its commitment to retain 368 people and add 48 more.

While Aearo faces $265,655 in potential damages, the Metropolitan Development Commission might not be inclined to collect all that money, said Ryan Hunt, senior project manager at DMD.

“Clearly, they made a lot of investment here,” Hunt said of 3M. The commission could agree to settle for a smaller amount, based on the 354 jobs retained and value of investments, which exceeded the company’s commitment by about half a million dollars, he said.

3M could also argue that it fell short because of factors beyond its control, Hunt said. The MDC will recommend whether to draft a new abatement agreement or claw back the money before a public hearing, which will be set this spring, either April 16 or May 7, he said.

Representatives of Aearo and 3M didn’t return phone calls seeking comment.

Aearo, which is best known for making ear plugs, was on a growth tear before its sale to 3M in 2007 for $1.2 billion. It generated $508 million in annual sales, and revenue had been growing over the prior five years at an average annual rate of more than 12 percent. 3M bought the company to expand its health and environmental safety product lines.

The tax-abatement agreement called for 12,000 square feet of new office space, plus a new acoustical testing facility, both of which were constructed.

Aearo came close to hitting its hiring target in 2010, when it added 42 jobs, but the payroll declined the following year and in 2012. Hiring appears to be on the upswing, but some of that is through contract workers, which the MDC will not count toward complying with the tax-abatement agreement, Hunt said.

Aearo’s facilities are at 5457 W. 79th St. and 7911 Zionsville Road on the northwest side.

ADVERTISEMENT

  • How about...
    ... a fair and equal tax system that treats similar investments equally? If tax rates are considered to be so high as to inhibit development, why not make it automatic that additional taxes on new and expanded development will be phased in over time. This would be fair to all companies and would eliminate any appearance that the winners are only those who hire the politically favored consultants to convince the quasi-public Develop Indy that they should recommend a tax abatement to the MDC.
  • This should be automatic, not a decision
    There should be no decision to make here. The consequences for not meeting targets should be spelled out in advance and implemented administratively, with an appeal to a committee based only on facts in error. Doing these things on a case by case basis is a recipe for hard feelings by the company and/or weak-kneeded cave-ins by government.
  • what about
    Rolls Royce who just laid off.....

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. If I were a developer I would be looking at the Fountain Square and Fletcher Place neighborhoods instead of Broad Ripple. I would avoid the dysfunctional BRVA with all of their headaches. It's like deciding between a Blackberry or an iPhone 5s smartphone. BR is greatly in need of updates. It has become stale and outdated. Whereas Fountain Square, Fletcher Place and Mass Ave have become the "new" Broad Ripples. Every time I see people on the strip in BR on the weekend I want to ask them, "How is it you are not familiar with Fountain Square or Mass Ave? You have choices and you choose BR?" Long vacant storefronts like the old Scholar's Inn Bake House and ZA, both on prominent corners, hurt the village's image. Many business on the strip could use updated facades. Cigarette butt covered sidewalks and graffiti covered walls don't help either. The whole strip just looks like it needs to be power washed. I know there is more to the BRV than the 700-1100 blocks of Broad Ripple Ave, but that is what people see when they think of BR. It will always be a nice place live, but is quickly becoming a not-so-nice place to visit.

  2. I sure hope so and would gladly join a law suit against them. They flat out rob people and their little punk scam artist telephone losers actually enjoy it. I would love to run into one of them some day!!

  3. Biggest scam ever!! Took 307 out of my bank ac count. Never received a single call! They prey on new small business and flat out rob them! Do not sign up with these thieves. I filed a complaint with the ftc. I suggest doing the same ic they robbed you too.

  4. Woohoo! We're #200!!! Absolutely disgusting. Bring on the congestion. Indianapolis NEEDS it.

  5. So Westfield invested about $30M in developing Grand Park and attendance to date is good enough that local hotel can't meet the demand. Carmel invested $180M in the Palladium - which generates zero hotel demand for its casino acts. Which Mayor made the better decision?

ADVERTISEMENT