Money for real estate acquisition is a major component of the $7.1 million in incentives the city of Indianapolis offered Angie's List Inc. for expanding its headquarters campus to accommodate 500 more employees.
Henry Amalgamated, a real estate company co-owned by Angie's List CEO Bill Oesterle, already has placed several properties under contract, including Last Chance Towing at 1024 E. Market St., CEO Bill Oesterle said Tuesday. Others are along East Washington Street, west of Angie’s List's current headquarters.
Angie's List, which provides customer-review services in more than 200 markets, announced Tuesday that it would nearly double its employee base by hiring as many as 500 people by 2015. The company had been scouting sites in Fishers and other states as it outgrew its near-east-side campus. The cost of acquiring and renovating more buildings in the neighborhood was among the concerns that drove Oesterle to check out suburban areas.
Angie's List moved to an old firehouse at 1030 E. Washington St. 11 years ago and has expanded in a patchwork fashion so that its 650 employees occupy 13 buildings.
The Angie's List campus is bordered by Ohio Street on the north, East Washington Street on the south, Interstate 65/70
on the west and Highland Avenue on the east.
The city will use tax-increment financing revenue to reimburse Henry Amalgamated, which leases buildings to Angie's List,
for as much as $4.6 million in real estate acquisition costs.
Henry Amalgamated or Angie's List must invest a certain amount beyond the city's money, but officials said Tuesday they were unsure of that minimum amount. Larry Gigerich, an economic development consultant who worked with Angie's List on site selection, said the two companies expect to spend $5 million to $6 million, including what’s reimbursed by the city, on acquisition and rehabbing buildings.
Angie’s List will spend another $4 million to $5 million on personal property, Gigerich said.
The city will also direct $1.5 million of its “Rebuild Indy” funds toward neighborhood and infrastructure improvements. Oesterle said a top candidate for upgrades is Market Street east of downtown.
Finally, the city will direct $1 million in federal tax credits toward Angie’s List. The tax credits would be applied to the newly acquired real estate, said Melissa Todd, vice president of operations at Develop Indy, the city's economic development arm.
Angie’s List is still working on its master plan, but Oesterle said the company will consider building a parking garage and at least one office building. He said he’s looking to fill in “open spots” on Market Street and Washington Street.
Buying the Last Chance Towing property was a key piece of the puzzle, and the contract was struck late Friday, Gigerich said.
Angie's List also will be eligible for as much as $7 million in tax credits from the Indiana Economic Development Corp., based on its plans to hire 500 people.
Mayor Greg Ballard noted that Angie’s List’s expansion will tie into neighborhood improvements spurred by the
Super Bowl Legacy project.
“The near east side of town gets even stronger as a result of what Angie’s List is doing here, and that’s
very, very special,” he said.
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I'd say that is either BS or IBJ chose to interview the wrong official. I would have preferred that IBJ waited until today to follow-up with an AL Official that either knew what they were talking about or were willing to be honest. Reporting this story the way it has been presented, sure makes Henry & Angie look like crooks, the City of Indy look like an easily swindled city and Kathleen McLaughlin look incompetent.
The city does Not collect the Indiana Income tax, nor does it collect the corporate income tax at that amount. The City collects 1%, the state about 3. The feds will get some. BUT, they did NOT say they would be creating NEW JOBS. Many who will be hired already have jobs elsewhere.
$50,000 is Very High to assume is the average Angie's List Job.. Lets assume $35000.
One percent of $35000 is $350 the city stands to make per year per employee.
So the City Stands to make $175,000 per year in taxes from each new employee BEFORE TAX DEDUCTIONS... The number is probably closer to $90,000.
The Interest alone on $14.1 Million would be more than $700,000 per year at 5% if they did Nothing with the money, so Income tax earnings can not be used as part of the argument. That would be a losing propostion.
The ONLY argument that can be made is that a large portion of the $17.5 Million in Income
that the new employees earn would be Spent In Indianapolis every year which would fund or even create new jobs to support these employees. They have to eat, buy clothes, drive something, have insurance, etc... So there will be a bit of trickle down income to the city because of that. But the actual amount is very difficult to quanitfy. It is Much harder than calculating how much extra money the super bowl brings in in 2 weeks. And not nearly simple enough to publish here.
However, I do think the money spent will be good for Marion County in the long run. Hopefully they can create a tech hub in that area of downtown.
Angies List Adding 400 Jobs, Investing Millions Into Redevelopment
http://www.insideindianabusiness.com/newsitem.asp?id=32309
1/29/09
Angies List Laying Off 90 Employees, Triming Costs
http://www.insideindianabusiness.com/newsitem.asp?id=33547
6/12/07
Angie's List Plans Expansion to U.S. Cities, Europe
http://www.insideindianabusiness.com/newsitem.asp?id=23823
11/09/07
Angie's List Fires 38 Employees
http://www.insideindianabusiness.com/newsitem.asp?id=26371
Did they collected the public incentives on this deal without creating new jobs and making the promised private investments?
This is a waste of our money, lets give some more to Irksay and THE Simon families too
The IEDC needs to disclose how many full time and part time jobs and the compensation for each.
They should also detail what money the company is required to put into this deal.
Is it good that the business will stay here? Yes. But here's the more complicated question? Would they have walked away from all that they have invested at this location had the City not offered them this $7.1 million?
I'm just glad the naysayers on here do not run the city or any business for that matter.
Let's run the numbers. 500 jobs at $50k a year is $25,000,000 in payroll. Personal and corporate income taxes alone on that amount (~11%) is almost $3,000,000. They will make money on this investment after 5 years WITHOUT even considering Property Taxes and the multiplier of these employees spending some portion of that money in the area (i.e. sales tax). If you prefer a city or state that doesn't want to invest in its future and provide its citizens with jobs...MOVE!!!
Let's get all the facts, not just what the IBJ knows or chooses to report and then decide. Sound reasonable?
I am not a big supporter of using tax dollars to help business, but in most cases when the business has money in the endeavour and is craeting and keeping jobs in Indianapolis instead of moving to Fishers; I support the spending of money to do this. This helps Indy and Marion County by hiring people who live in Marion County and outside of the county. These employees will purchase goods and the company will do as well and that helps Indy. The payback is well worth the investment in keeping jobs here instead of more empty buildings on East Washington Street. Thank you Angie's List and the City of Indianapolis in keeping jobs here instead of in the suburbs.
The $7.1 million taxpayer gift to speculate on real estate, apparently doesn't have any minimum private investment requirements or bank financing.
If that is not enough, we are giving them up to $7.1 million additional dollars in cash for saying they will hire 500 employees at minimum wage or 100% commission.
Bill O., Angie H., Larry G., Mitch R., Mitch D., & Greg B. have some explaining to do.