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City set to rescind tax breaks for planned Interactive Intelligence expansion

May 1, 2017
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The city of Indianapolis is prepared to rescind tax breaks it approved in 2014 on a $22.4 million expansion for Interactive Intelligence Group Inc., saying the terms of the deal have not been met.

Genesys Telecommunications Laboratories Inc., which bought Interactive last year for $1.4 billion, recently told city officials it doesn’t intend to occupy the new, 120,000-square-foot office building that was part of the incentive deal.

Interactive and developer Duke Realty Corp. requested the tax breaks, worth a total of $2.6 million, for constructing the $12.4 million office building on Interactive’s northwest-side campus and buying $10 million in equipment.

Under the terms of the abatement deals, Duke, as the building owner, was to receive a $1.8 million tax break over 10 years on the building. Interactive was to receive a tax break worth about $780,000 over 10 years on the equipment.

At the time, the software and cloud-computing firm said it planned to retain 970 employees and add 430 full-time employees by 2017. Both the existing and new jobs were to pay an average of $31.25 per hour, or $65,000 per year for full-time employees.

Based on the investment, purchasing and hiring plans, the city approved two 10-year tax abatements in 2014. The new building, at 7676 Interactive Way, now sits on Interactive’s sprawling campus with two-other company-occupied buildings.

But Interactive’s acquisition last year by Genesys curbed the growth plans. IBJ reported in January that the anticipated job surge had not occurred.

Genesys has 935 employees in Indianapolis, a spokesman for the company told IBJ on Monday, after some positions were eliminated and other employees left voluntarily. The company has about 40 job openings, the spokesman said.

After the acquisition, Genesys decided it couldn't meet the job commitment, the spokesman said. If the company decides to grow locally in the future, existing buildings would have space to accomodate it.

In addition to falling short of the hiring goal, the equipment for which Interactive received an abatement wasn't purchased, the spokesman said.

Genesys intends to cease operations in the building, which is mostly vacant, and relocate employees to other nearby buildings leased by the firm. It canceled its lease on the new building on April 15.

The city had not yet provided any tax benefits from the abatements, due to a reassessment that was payable this year, according to city documents.

The city’s Metropolitan Development Commission is set to vote on Wednesday to revoke the 10-year property tax abatements. Genesys and Duke have agreed to terminate the abatements, according to a resolution prepared by the city.

A Duke representative did not respond to a request for comment on Monday morning.

Interactive also received pledges of $8.3 million in state tax credits based on its 2014 expansion plans. The status of those incentives was not immediately clear on Monday. A spokeswoman for the Indiana Economic Development Corp. did not return a request for comment before IBJ deadline.

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