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Rolls-Royce employees begin move to downtown campus

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Rolls-Royce Corp. began moving some of its employees to its new downtown office building on Monday—a shift an IUPUI analyst projected could generate $510 million in annual economic activity.

About 400 of the employees will be moved into the facility, dubbed the Rolls-Royce Meridian Center, by late January. The remaining 2,100 are expected to settle in by midyear, bringing the total number in the campus on South Meridian Street to 2,500.

The London-based aircraft-engine maker, which employs about 4,000 in the Indianapolis area, announced in March its plans to move office employees from two buildings on Tibbs Avenue, on Indianapolis' west side, to a downtown campus formerly occupied by Eli Lilly and Co. That allows Rolls-Royce to tear down those Tibbs Avenue office buildings and make improvements to nearby manufacturing sites on Tibbs.

City officials are in the process of reviewing a $23 million, 10-year tax abatement for Rolls-Royce, based on the number of retained jobs and investment in both its downtown and west-side properties. The company plans to invest $22 million to upgrade the downtown property and another $190 million to upgrade the Tibbs Avenue plant.

The City-County Council and its economic development committee have approved the abatement. The Indianapolis Metropolitan Development Commission will review it Wednesday to decide whether it should receive final approval.

Some members of the council initially critiqued the abatements because the deals don’t entail new jobs. But company officials have touted the economic development benefits of the move and consolidation effort and the 4,150 jobs the company says will be retained because of it.

A study presented to the council’s Economic Development Committee this month by IUPUI senior policy analyst Drew J. Klacik projected $510 million of economic activity would be generated from Rolls-Royce’s downtown move. An estimated $165 million of that is employee wages at an average salary of $76,000. 

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  • Be carefull with those who cheat
    Rolls Royce still pay millions of Dollars a year in secret corruption and slush funds to help sell their aero engines to airlines that will be "advised" (or forced!) by those receiving the secret slush funds.
    Just one example is that Tommy Suharto (son of the ex-Indonesian president) was given about 20 million dollars and a new blue Rolls Royce car by Rolls Royce (before he was jailed for murder!) to force the Indonesian airline Garuda to take the R-R Trent 700 engine on the A330 aircraft they were buying. They got a really bad commercial deal and the follow-on warranty and support was probably the worst any operator had ever had. When Tommy was jailed, Rolls then paid his millionaire friend, Soetikno about 1 million dollars a year! This was supported by the Rolls exec in Indonesia (Dr Mike Gray) because Mike was given "personal benefit" by Soetikno to keep the contract going. Mike even used RR staff to support the bar girl he was "knocking off" when his wife was away.

    Dick Taylor. (ex Rolls-Royce Chief Service Rep)
  • No way.
    There is absolutely no way this move is creating $510M in annual economic activity. Realistically it's MAYBE a tenth of that for the short term. Implying the move is responsible for the creation of those jobs is bogus. They already exist. In Marion County. And they're not going anywhere anytime soon because the engineering talent exists here and the manufacturing agreements already exist with the UAW. Rolls-Royce has tried outsourcing manufacturing, and while the initial business cases look good, once the Long Term Agreements expire (which is already starting to happen), they are seeing 20%, 50%, and 80% increases in piece parts. That's why companies like GE are insourcing. Plus, this move doesn't guarantee any new jobs, or even retaining the existing jobs. Yet we're giving them tens of millions? This is irresponsible for the city to just give away our much needed money while simultaneously raising taxes, increasing utilities, etc. If this is REALLY that good for the city, why don't they publish their business case? Probably because it doesn't exist and is a scare tactic to the city, just like the CME used against Illinois.
  • Golden Handcuffs
    Is Develop Indy creating and enforcing "performance based" taxpayer incentives or are they just throwing money out the window hoping for the best?

    Seems to be a growing trend of the Indianapolis Metropolitan Development Commission approving taxpayer incentive packages that have accelerated company benefits, weak or missing clawback provisions, and poor terms and protections for taxpayers.

    Don't forget the city/taxpayers are financing a $156 million North of South (a.k.a City Way) project to support Rolls Royce's sublease of Eli Lilly's empty office space.

    The "City Way" plans call for 320 apartments, a 157-room conference hotel, 40,000 square feet of retail or office space, 800 parking spaces, along with a separate plan for a $18 million YMCA branch.

    That government financed incentive package (With no private financing) for "City Way" didn’t come with any job-creation commitments either or an opportunity for taxpayers to earn some return alongside the developer if the project succeeds.

    http://hadenoughindy.blogspot.com/2011/04/no-so-deal-worse-than-even-i-thought.html

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  1. 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.

  2. If you only knew....

  3. 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.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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