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City-County Council OKs $30M incentive deal with Dow Agro successor

November 19, 2018

The City-County Council on Monday approved a plan to provide Corteva Agriscience with $30 million in incentives to maintain operations in Indianapolis, but not without reluctance from some council members.

Corteva is the agriculture division of DowDuPont, which was formed last year in the $62 billion merger between Dow Chemical and DuPont. Wilmington, Delaware-based Corteva—which includes the local operations of Dow AgroSciences—is set to be spun off as a public company in June 2019.

Corteva employs about 1,400 workers in Indianapolis.

The incentive deal authorizes the issuance of $30 million in economic development revenue notes to Corteva from the city of Indianapolis, which would be paid back with about $5 million annually in tax increment financing funds that the city had been passing through to government units such as schools, libraries, parks, police and fire protection. Those entities would no longer receive those funds while the notes are being paid off.

The council voted 18-7 to approve the deal. Democrats Zach Adamson and Stephen Clay voted against the plan as did Republicans Jeff Coats, Danielle Coulter, Janice McHenry, Jefferson Shreve and John Wesseler.

Adamson said he thought the proposal set a “dangerous precedent” in terms of how the city offers incentives.

Several council members were reticent about the deal but supported it nonetheless.

“It’s not the best deal; I’m not excited about it,” said Democrat Jared Evans. But he said the long-term benefit of keeping the jobs in the community outweighed the short-term harm to the taxing units.

Dow Agro’s annual economic impact in the city of Indianapolis is about $60 million, according to information considered by the council. And the company will pay more than $3 million in taxes in 2019 alone.

Dow and DuPont announced their merger in December 2015. Discussions on the incentives began in 2016. At the time, Indianapolis officials were afraid the city would lose the jobs and investment Dow Agro had previously made. The incentive package has been delayed until now because of various legal steps Dow and DuPont had to complete before they combined operations.

Under the incentive deal, Corteva will be required to retain its workforce for 10 years. There is an incentive clawback included in the proposal if Corteva does not maintain the jobs.

Adamson earlier told IBJ that the incentives were “really nothing shy of extortion” because the city wasn’t promised new investment beyond the $30 million investment in Dow’s facilities at 9330 Zionsville Road that already had occurred.

 

 

 

 

 

 

 

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