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Franklin calls off deal to land brewery plant

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The Franklin Redevelopment Commission has canceled a deal in which it would have financed the $2.3 million purchase of a vacant industrial building to attract a California-based beer company that planned to hire 150 workers over the next three years.

The commission decided Thursday to call off the deal because TailGate Beer of San Diego failed to respond to a deadline to provide detailed financial information.

In April, the Indiana Economic Development Corp. offered TailGate Beer up to $1.85 million in performance-based tax credits and $100,000 in training grants based on the company's plan to create as many as 150 jobs over the next three years in a multi-million-dollar production, packaging and distribution facility.

"[The commission] started asking for updated information way back in April," said Craig Wells, executive director of Franklin Development Corp., the economic development entity that would have purchased the 48,000 square-foot-building at 1800 Musicland Drive.

"I think there were some red flags based on some information he had provided at the April meeting," Wells said of TailGate owner Wesley Keegan. "The original vote was contingent on receiving satisfactory financial information."

Although Keegan later indicated he didn't intend to provide any further information, Wells said the development corporation held up its end of the bargain by reaching a purchase agreement with Coyote Development. Wells said the development corporation won't lose any money by letting the purchase agreement expire. 

Coyote Development built the manufacturing space in 2008 for Klaisler Manufacturing Corp of Franklin. Both companies are owned by Terry Hubbard. Wells said Klaisler never occupied the building because of the recession.

Other incentives that had been on the table for TailGate included $900,000 in lease guarantees, a $300,000 loan and a $200,000 grant for "greening" the building and operations, Wells said.

Mayor Fred Paris said he’s still in favor of having the Franklin Development Corp. buy the building on the chance of attracting a different company. “This is a phenomenal building in a great location. A lot of times requests we get are looking for buildings like this,” he said.

Paris noted that it took six months to negotiate the purchase agreement because, as a short sale, it had to be approved by the bank and the Small Business Administration. If the building slips into foreclosure, Paris said, it would be nearly impossible to make it available to a new company in a timely way.

 

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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