Algaeon Inc., the upstart biotech company founded in 2008, expects its Indianapolis operations to bloom with the investment of $4.9 million in new equipment and the hiring of 25 more employees by 2019.
The firm is seeking a tax abatement on the equipment from the city, which would save Algaeon $179,000 over its six-year term. The Metropolitan Development Commission is set to consider the request at its meeting on Wednesday afternoon.
The expansion follows an abandoned attempt by Algaeon to move its Indianapolis operations to a location in Westfield. With Its lease on space at 8440 W. 82nd St. set to expire, and the company had started talks this summer with Westfield officials for a tax abatement on the project.
However, negotiations for leasing a vacant industrial space in Westfield didn’t pan out, Mike Neibler, vice president of development, told IBJ on Wednesday morning. So, it instead has moved to leased space at 7601 E. 88th Place.
“This is the same project, but in Marion County,” Neibler said.
The firm first produced algae-related products for the biofuels market, but in 2011 transitioned to harvesting and processing nutrients from algae for dietary supplements and animal feeds. It currently produces Astaxanthin, an antioxidant, and Beta Glucan, an immune health promoter.
As the firm expands in the supplements market, it plans to purchase $4.9 million in specialized equipment for its new research and production facility. The equipment would include fermenters, boilers, centerfuges, dryers, pumps and refrigeration units.
The investment would allow Algaeon to retain its existing 12-person workforce and hire an additional 25 employees by 2018, according to its abatement application. Both the existing and planned jobs would pay an average of about $40 per hour.
Over the six-year abatement period, Algaeon would save $179,020 in taxes but still would pay $97,282 related to the new equipment. After the tax abatement expires, it is expected to pay about $222,000 in taxes annually on the equipment, according to a city staff report.
MDC staff has recommended approving the abatement.
If Algaeon’s preliminary request is approved on Wednesday, the abatement would be scheduled for final approval by the MDC on Nov. 19.