IBJNews

Lagging on jobs, earplug maker agrees to cancel tax breaks

Back to TopCommentsE-mailPrintBookmark and Share

A local manufacturer known for earplugs will repay $19,700 from a tax-break deal because it didn't create the number of jobs it promised in 2007, under a clawback agreement with the city of Indianapolis.

Aearo Technologies LLC, owned by St. Paul, Minnesota-based 3M Co., potentially faced a much higher penalty. The city could have sought as much as $265,000 under the terms of the 2007 tax abatement agreement, said Ryan Hunt, a senior project manager in the Department of Metropolitan Development.

However, the company invested nearly $16 million, about a half-million dollars more than promised, in buildings and equipment on the northwest side, and has retained a significant number of full-time, permanent jobs.

"We gave them some credit, obviously," Hunt said. "We thought the best remedy was to ask for some repayment and end it early."

The Metropolitan Development Commission on Aug. 6 approved a resolution to accept the $19,700 repayment and terminate the remainder of the abatement. Aearo, which agreed to the terms of the resolution, could have benefited from the abatement on real property for another year and on personal property for another three years, Hunt said.

The company promised in 2007 to retain 368 permanent full-time positions with an average hourly pay of $27.02 and add 48 more employees. The company also planned to invest $15.4 million in a new office building and research facilities.

The company spent nearly $16 million in 2008 on buildings and equipment. However, this year, Aearo reported having 354 employees—lower even than the figure it had promised to retain. The company also has 134 contract workers, but Hunt said the commission decided to count only permanent, full-time employees.

Aearo's total tax savings since 2008 is $579,411, according to the Department of Metropolitan Development. Because the company fulfilled other aspects of the abatement agreement, it was entitled to retain part of its savings.

Aearo 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.

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

ADVERTISEMENT

  • 14 Jobs
    You couldn't add 14 jobs?!?! I am one of those 134 Contract workers (for over 2 years) and have been waiting for a full time position... Thanks a lot!
  • DUMB!!!!!!!!!
    Just $19,700! Why not have them pay all $579,41. At LEAST the $265,000. $19,700 is not enough.
  • 3M
    3M is based in St. Paul, Minnesota. Not Minneapolis.
  • What was gained and by who?
    That is the problem with so many of these arrangements EAR Corp. has been at that location at least a decade before this abatement was inked. Why is the Government giving tax dollars to businesses for doing what they would have done on their own? Well beyond the obvious reasons of collecting professional fees for their preferred legal & financial partners, Campaign Contributions and gaining Votes.

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:
 
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

ADVERTISEMENT