City orders Delco Foods to pay nearly $100,000 for breaking incentive deal

A local food production company must pay nearly $100,000 to the city of Indianapolis after its decision to move to a neighboring county broke an incentive agreement, the Metropolitan Development Commission officials unanimously ruled Wednesday.

Delco Pizza Products of Indiana Inc. and affiliate company DFI Transport LLC will be required to pay off $98,406.15 in tax breaks it has received since the abatement was granted in 2012, the MDC said. The company plans to move operations to Whitestown next year.

Steve Goldman, president of Delco, said the company was disappointed in the ruling, “because we definitely fulfilled our numbers.”

Delco—also known as Delco Foods of Indiana—received the 7-year tax abatement on the promise it would invest more than $1.5 million in personal property at its 4850 W. 78th St. facility while retaining 70 jobs at $24 per hour and creating 10 additional positions with an average wage of $20 per hour.

Goldman said the company, which now employs more than 100 people, doubled its job-creation commitment during the abatement period, adding 24 jobs. It also invested $2.7 million into the 78th Street facility, which it has called home since 2001.

The abatement period started in 2013 and runs through this year. The MDC said Delco would need to stay in Indianapolis until 2025 to comply with the agreement, but broke the pact when it announced "a cessation of activity" in the city.

Goldman said the company tried to work with the city to minimize the clawbacks after the move was announced last year, but said he believed the “decision was pretty much predetermined" when those conversations began.

"Over the last four years, I have made it my mission to increase compliance and insist on a clawback when companies fall short of their commitments," Mayor Joe Hogsett said in a written statement. "This focus isn't just about accountability — it's also about sending the message that we are fighting every day on behalf of Indianapolis taxpayers."

Delco in 2018 struck a deal with Boone County officials to move to a new 150,000 square-foot building in Whitestown, at the intersection of Perry Worth Road and E. County Road 500 S., east of Interstate 65.

The 63-year-old food distribution company is spending more than $5 million to equip that building for front-office operations, printing, warehousing and a new cheese-processing line. The company received approval for a 70% personal property tax abatement from Whitestown over a seven-year period, equaling about $193,000.

The company expects to move to its new facility, now under construction, in early 2020.

Delco promised to employ 132 employees at the facility by 2024 who will earn an average wage of $26 per hour. More than 110 of those employees are expected to be in place by the end of 2020.

Molly Whitehead, executive director at the Boone County Economic Development Corp., said Delco can use new and existing employees to comply with the incentive agreement. 

Delco Foods derives its name from Delaware County, Pennsylvania, where it was founded by Buddy Robins, who moved the business to Indianapolis in 1956.

The company distributes premium food products, including sauces, meats, pasta, cheeses and baking supplies. Delco is a founding member of the Bellissimo network, a nationwide group of food processor/distributors that enables its members to locate high-end food products for its customers.

Please enable JavaScript to view this content.

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.