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City to give Angie's List $4.6M to buy properties for expansion

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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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  • Friends
    The governor and Osterle go way back...
  • Let's do the math
    $7.1M divided by 500 employees...means that the city is buying these jobs for $14,200 apiece. And these jobs are to phase in over the next, what, 10 years? And they plan to hire local people who already live here, or will they import people to add to the tax base? Something's not adding up.
  • Damn proud of this City/State
    If we can take a step back from the partisan BS for a moment, I think we can all agree that Indiana is the darling state in the Midwest, if not the country. Indianapolis, as our capital city, has also created an amazing climate of economic growth and development. I think Ballard benefits mightily from Daniels' economic prowess, but the fact remains that our state is healthier, more agile, and business friendly than every surrounding state. Further, there are are only a couple states in this country that can boast our record over the last 5 years. Let's give the people running the City of Indianapolis and the State of Indiana a reprieve from the hate. They have pretty much dominated all our our counterparts over the last several years. I trust that any move for incentives is a well thought out strategy to retain and attract future companies and jobs to the state. If you want your sidewalk repaired, go buy some Quikcrete and fix it yourself.
  • Are You Kidding Me?
    The "officials" that IBJ intervieed on Tuesday were "unsure" of the "minimum" amount that AL must invest!

    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.
  • Good Work from a Great Mayor
    You gotta love our Mayor. The streets get repaired, the city has not raised taxes, and now more jobs right in the part of the city that needs them the most! The Mayor once again proves that hard work beats hype. Indianapolis is very lucky to have a history of great mayors - of both parties - Ballard is one of the best.
  • The Same Ol Story
    Here we go again. The Mayor and his lousy business dealings. Giving away taxpayers and the broke U S Government's money, on a promise. This company only employs a total of 600 people, and in order to swindle the city out of millions of dollars it says, without evidence or even a forma of a chance to create 500 jobs?>>>>> And just what are these jos paying, minimum wage?
  • Bad math
    It is the city, not the state which is givign the 7 Million in tax incentives plus the 7.1 million other incentives for a total of $14.1 so we can get 500 new jobs In indianapolis. That is like buying the jobs at $28,200 a piece. That is expensive to say the least.
    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.
  • not sure
    On one hand I'm all for investment in downtown and near eastside. On the other hand, if Angie's was going to move to Fishers if the deal was not done, then Indiana taxpayers are net losers (assuming Fishers would not pay that much). This is like that "Walmart game" where they pit towns and counties against each other to get better incentives.
    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.
  • It Must Be Groundhog Day...Again
    0/30/08

    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?
  • WHY
    I cannot get a crumbled sidewalk repaired
    This is a waste of our money, lets give some more to Irksay and THE Simon families too
  • No Strings Attatched?
    Why speculate on pay packages for these Angie List jobs and company investment?

    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.

  • wow!
    You need to reread and take a math class!
  • Miscalculation
    Estimating $50k per employee is way too high - try $30 or $35 - Angie's List is notorious for underpaying.
    • Huh?
      If you'd put down your pompoms for a second, you might realize that the tax rates are not based upon simply needing to break even, i.e. getting back the amount in taxes that the government provides in incentives isn't an automatic win since the tax rates are based upon the amount of revenue needed to provide a certain level of services to each citizen. When one citizen/employee's taxes are subsidized, everyone else will have to pay a higher rate to make up the difference unless the level of service per capita is to be reduced. In either event, one business/taxpayer is being given preferential treatment to others, which seems to be in contrast to the fundamental tenet of equal treatment under the law.

      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?
    • Great News!!!
      This is great news for the East side, for Angie's List, and for the city! Congrats!

      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!!!
      • Ludicrous
        We clearly need new leadership.
        • Angie's List
          Here we go with a bunch of naysayers running their mouths about an improvement announcement by the city when they only have part of the story. Certainly, they have a right to speak out, but wouldn't it be reasonable to get all the facts before pointing fingers and jumping to conclusions?

          Let's get all the facts, not just what the IBJ knows or chooses to report and then decide. Sound reasonable?
        • ROA for Part Time Jobs
          Well let's just see here. OK $14.1 mil. for 500 jobs in 4 years -- maybe. That comes to $28,200.00 per job . If they only add 250 jobs , then it's $56,400.00 per job. This is a good deal for the city and state.? Hardly. What this is is cronyism. The state will never make out on this investment. I thought Mitch was supposed to be a smart guy. This is a guaranteed loss.

          • Taxes
            So will Angie's list have to claim this as income?
          • Re: TJINDY
            I understand fully what you are saying, but it has come to the point to where any business wanting some free money just has to cry fowl saying they are going to move to the suburbs, and boom, the city pays them to stay! Colts and Pacers are great examples of this.
          • No City Layoffs
            There are not going to be any city employee layoffs of any kind. The city will not hire people when employees leave, retire or are fired.
            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.
            • What a joke...
              Thanks Mitch!
            • Angie's List
              Don't citizens have to pay for Angie's list services via membership? Why give her taxpayers money?
            • Rediculous
              This is crazy. The city, is going to lay off nearly 200 people, but give Angie's List $7.1 on a "promise" that they will hire more people. I understand that there is a game to be played between attracting and retaining businesses, but when the city can't afford to keep their own people on staff, they can't afford to be giving handouts to others. I don't pay taxes to benefit the corporate market. I pay to benefit the public needs.
              • "Very Very Special" Indeed
                Here we go again having taxpayers fully fund a real estate deal for a politically connected person.

                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.

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