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City cracking down on noncompliant tax breaks

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The city of Indianapolis is seeking to overturn property tax breaks for more than 20 companies that have continued to apply for abatement even though they were unable to meet job commitments.

Companies that receive personal or real property tax abatements are required to self-report their employment numbers to show whether they are complying with economic-development deals.

When companies fail to comply but still file for their tax abatements with the Marion County Auditor, the city begins a process to terminate the abatements.

This year, the Department of Metropolitan Development is bringing more actions against noncompliant companies than it has "for the last several years," said Ryan Hunt, a senior project manager. He said the economic downturn appears to be the overriding factor.

Once the Metropolitan Development Commission determines that a company has failed to meet its commitment, the city has a few options: It can claw back prior abatement savings, prevent future savings or renegotiate a more realistic jobs-commitment deal, Hunt said.

Among the companies that have not met jobs commitments, some hired up to 80 percent of the employees they promised, while others failed to add any jobs, he said.

Hunt said most companies aren't trying to pull a fast one by continuing to apply for tax breaks. Abatement documents often are filed as a matter of routine by a company's accountants, who may be unfamilar with the deal requirements or not have access to up-to-date employment information.

The retail graphics firm Pratt Corp. promised in 2004 to create 141 new full-time positions paying an average of $21 per hour and retain 177 existing employee at its facility along Shadeland Avenue. The company fell below its hiring targets in 2008, but still filed for abatements in 2009 and 2010.

CEO Dan Pratt said he can't blame the city for moving to pull the abatement, "based on the agreement we signed."

Pratt said he hadn't even thought about abatements in several years as he focused instead on stabilizing and rebuilding the company, which now has about 175 local employees.

"We've had to scale down the last few years, that's just the honest truth," Pratt said. "We've had our ups and downs like most people."

Gannett Co., parent of The Indianapolis Star, promised in 2008 to create 209 new jobs as part of a National Shared Services Center, in exchange for eight years of personal and real property tax abatements worth about $36,000. But the company created only 129 jobs under the Shared Services umbrella, prompting the city to file to rescind the abatement.

Robin Pence, a Gannett spokeswoman, said the company met its jobs commitment by hiring 100 people for a separate corporate entity, Gannett Satellite Information Network.

The abatement agreement will have to be reworked to include both corporate entities, Hunt said.

Many of the economic-development deals, including Gannett's, also included incentives from the state. In Gannett's case, the Indiana Economic Development Corp. offered $780,000 in performance-based tax credits and $155,000 in training grants.

The state incentives are tied directly to actual job creation, and companies receive a prorated share based on how well they perform, said Katelyn Hancock, a spokeswoman for the IEDC.

She said IEDC, as a matter of policy, does not share information on how many jobs companies actually create or how much of the promised incentives they actually receive.

"You'll have to ask the company," she said. 

Among the other companies on the city's list of property tax abatements to cancel or renegotiate: Aero LLC (36 jobs), Auto Research Center LLC (22 jobs), Engledow Inc. (16 jobs), The Schneider Corp. (141 jobs), Sentry BioPharma (30 jobs), SVC Manufacturing (40 jobs), and Trilithic Inc. (127 jobs).

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  • Come on...what's the fuss
    Gee, are we not in the era of giving tax breaks to businesses, the wealthiest, paid for by the rest of the taxpayers? Are we not told by the GOP that making Everyone pay their fair share is unamerican and against God's law? Wake up everyone, all those tax breaks, tax loop holes, all hurt those who are paying more and more and receiving less and less in basic government services - like school bus transportation for our kids, education in general, medicare for our seniors....
  • Tip Of The Iceberg
    Where Are The Jobs?

    Indianapolis - A new audit of Indiana's job creation programs confirms what WTHR has been reporting for the past year: tens of thousands of new jobs promoted by state leaders have never come. The actual number of jobs created is far less than expected.

    http://www.wthr.com/story/13870940/where-are-the-jobs-the-real-numbers-are-in?clienttype=printable

  • About Time
    It's about time. Purposeful or not, this is basically cheating on taxes. If I cheated, they'd go after me, so they need to go after these companies, too. It's only fair.
  • STOP ABATEMENTS
    It seems to me that giving tax abatements for a lot of the properties I have seen (with first hand knowledge) does not make since. If you are going to provide this type of incentive, do it for primary industries, not all this little stuff. Waste of potential tax dollars that does not pay off. Clearly job creation always makes headlines, but at what cost! Franklin Township can't even afford to drive our kids to school anymore!

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  1. Saw the Indy Men's Chorus "Music of Gilbert & Sullivan" at the Indiana Historical Society on Sunday evening.

  2. Temporary workers are not "tools" they are people and companies that keep large amounts of temp staff are cheating.

  3. I miss having them around. I hope one of their stores is in the general Meridian/86th Street area. I will make good use of it.

  4. The Fringe! Plus, the simple fact that there are so many local faves in such close proximity to each other.

  5. I remenber, watching the toll road, being built, through South Bend, when I was 10 years old. I believe, back then that it was estimated, that the toll road, would be paid for in 20 years and then it would be free. I am now 71, what happened? Since the power is in the people, by that, I mean that, we the people are in total control of everything. I, suggest that no one ever use the toll road again, let it go broke. We the people can control the price of everything, from groceries to gas, if we would just do it. If we don't pay the asking price, the sellers will lower the price and if we wait awhile, they will lower the price to what we accept as reasonable. I would like to know why a highway like interstate 94, is so well maintained, a much better highway, than the toll road, but has no tolls. I would also like to know why, a sitting governor, with a term limit, maximum of eight years, can lease, public property, for 75 years. Even though I have transponders in both of my trucks and will not be affected by the increase, I have been and will contine to avoid using the toll road. I make many trips from northern Indiana to Chicago, every year, and I prefer the better highway, I94!

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