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Rolls-Royce tax-incentives deal set for hearing

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A plan to offer a 10-year tax abatement worth $23 million for Rolls-Royce Corp. to redevelop two plants on the west side and move thousands of office workers into downtown's Faris campus is scheduled for an initial hearing Wednesday before the Indianapolis Metropolitan Development Commission.

Rolls-Royce plans to invest $212 million between the two projects. The largest portion, $190 million, would go toward real estate improvements and new equipment for the company facilities at Tibbs Avenue and Raymond Street.

But first, the company plans to spend $22 million to move 2,200 local office employees from two buildings at the Tibbs Avenue campus, both of which would be demolished to make way for improvements. The office employees would move into the campus near Meridian and South streets formerly occupied by Eli Lilly and Co.

The Faris location is being renamed the Rolls-Royce Meridian Center.

"Many of Rolls-Royce's facilities on Tibbs Avenue and related infrastructures were constructed shortly before and during World War II," said company spokesman Joel Reuter in an e-mail. "Rolls-Royce has made substantial capital investments in real and personal property in the Tibbs site and is in the process of doing so at Rolls-Royce Meridian Center."

Rolls-Royce is not promising new jobs as part of the agreement, but said the moves will help it retain 4,150 existing positions, according to the tax-abatement application.

The city's planning staff has recommended approval of the tax abatements, since "a project such as this would not be economically feasible" without it, it said.

"These renovations and relocation projects are critical to securing Rolls-Royce's continued presence in Marion County," the abatement resolution notes. "Without this project, future research functions and product lines will likely be moved to Rolls-Royce's state-of-the-art facility in Reston, Va."

The abatement deal is unusual for Marion County in that it does not tie the incentives to job creation.

City officials have acknowledged the deal isn't typical, but they say the benefits to the city merit the investment.

Rolls-Royce said it interviewed 250 pre-screened candidates Saturday to fill 87 openings for machinists to work in Indianapolis. Starting pay for the jobs is $18.25 to $21.25 per hour. The company said it screened 1,300 applications for the interviews.
 

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  • Why?
    No guarantee of jobs. No guarantee they will stay in Indianapolis. No guarantee they will make any investment in existing plants, except to say they plan to make the investment by 2020. So over the next ten years they might or might not invest on average 19 million per year. If RollsRoyce can guarantee jobs, give them a tax break. No job guarantees, no tax break. RollsRoyce will not announce any job reductions relating to loss of the F136 until after they get tax relief from Indianapolis. Probably will start the layoffs in January.
  • Learn from history
    The idea that Rolls-Royce, or any company, could promise to hire or maintain a certain level of employment in future years is ludicrous. And especially so in today's economic climate. I remember some years ago, during a previous city administration, GM wanted to invest several million in their Stamping Plant here and requested a tax abatement from the city. One of the reasons why the city turned down the request was because GM couldn't promise to maintain a certain level of employment at the plant. It wasn't many months later that the plant was placed on their list of plants they were considering closing. The rest is history. Like GM, Rolls has other facilities that they can move their work to so hopefully this Development Commission will realize that keeping jobs is just as important as creating them.
  • Whose losing jobs?
    No one is losing jobs due to the cancellation of the F136 Engine Program. In fact, sales of spare parts is projected to increase over the next few years, which may indicate further hiring. I'm not sure why anyone would be opposed to helping one of Indianapolis's largest employers after they have said they will invest millions of dollars in new facilities. They own a plant in Virginia that is underutilized right now (due to cancellation of said fighter engine program). They can always shift production over there if they don't think it's economical to do business here.
  • Nick
    They never said they are firing all those people that won't be working on those engines. That's why they are doing all the remodeling at the plant to expand! 300 million dollars, what do you think they are doing with that money? That money will be also going to local contractors to do these repairs. They are also no shifting people out of town, but to the Lilly center downtown. Your not making sense. Just cause they are going to stop trying to make something the government is refusing to buy doesn't mean we should just kick them out of town.
  • Trust But Verify
    David,

    Everyone wants to attract and retain high paying jobs.

    Giving away tens of millions of government incentives with no company employment expectations is irresponsible.

    Shrinking defense budgets and canceling a key military jet engine program clearly indicates overall local employment will decrease unless the company shifts civilian work to Indianapolis.

    No company should be rewarded for shrinking its local workforce and shifting work to other locations.

    Local government officials have a fiduciary responsibility to seek at least a break even return on investment with offsets of personal income and sales taxes, etc....

    Oh by the way, gaining 89 jobs is great, but losing 400 jobs connected to the F136 engine for the Joint Strike Fighter is worse news.

    • By the Way Nick
      http://www.insideindianabusiness.com/newsitem.asp?ID=51098

      Check this out Nick...
      • Great
        I think anyone who opposes this is stupid. Lets not mention that Rolls employees a lot of people in this state and has been here before most of us can even remember but lets not reward them for their continued invest in this city.
      • Me Me Me
        Can I gat a tax abatement
        1, I will create no jobs
        but
        2, I will promise to stay in Indianapolis

        Or do you only give them to wealthy individuals and companies?
      • Golden Handcuffs
        Tax incentives with no job promises is plain stupid.

        Rolls-Royce to Discontinue Jet Engine

        http://www.insideindianabusiness.com/newsitem.asp?ID=51094

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