Elanco Animal Health Inc. announced Friday morning it will build a $100 million headquarters campus at the former General Motors stamping plant west of downtown, a move the state has incentivized with more than $86 million in tax breaks plus land for the project.
The move will secure Elanco’s future in central Indiana and provide a long-sought reuse for at least part of the stamping plant site, which has been vacant for almost a decade. But the deal is a blow to the city of Greenfield, where Elanco now has its headquarters. The state and company have agreed to work together to find a user for the company’s Greenfield space.
Elanco, which spun off from Eli Lilly and Co. in 2018 after more than a half-century, said it selected the site after a “rigorous, multi-state search.” The maker of animal vaccines and food additives had been noncommittal in recent months over whether it would keep its headquarters in Indiana.
The state will provide 45 acres of the 91-acre site to Elanco for the headquarters and up to $73 million in conditional tax credits over a 10-year period. The Indiana Economic Development Corp. is also providing up to $4 million in training grants based on the company’s commitment to retain 1,623 Hoosier jobs and create up to 573 high-wage jobs.
The IEDC offered up to $7 million in assignable redevelopment tax credits, up to $2 million in conditional Hoosier Business Investment tax credits, and up to $500,000 for relocation expenses based on the company’s plans to invest in the campus.
Elanco called IEDC’s offer a “competitive incentive package” and said it has a restricted option for an additional 20 acres. The state and city will support redevelopments in the area and work to increase neighborhood connectivity, Elanco said.
Overall, Elanco said it plans to invest more than $300 million in its Indiana operations, which the state said will ensure “the Hoosier state is at the center of its future growth and future consolidation.” Elanco will retain its manufacturing centers in Clinton, Indianapolis and Terre Haute and plans to center its research and development activity in the state.
Elanco’s announcement comes one day after Ambrose Property Group said in a public notice that it had sold the GM stamping plant site to an unidentified buyer.
That turned out to be the state. The IEDC paid $25.5 million for 91 acres. Ambrose had been asking about $50 million for the site, which it had originally purchased for $3 million from RACER Trust, an organization set up to handle abandoned GM properties.
According to a notice of voluntary dismissal filed by Ambrose in Marion Superior Court, the sale resolved the year-long legal dispute between the city of Indianapolis and the locally based developer that started after the company withdrew in September 2019 from its $1.4 billion Waterside development on the 103-acre property.
The Hogsett administration had threatened to take the property from Ambrose using eminent domain.
Ambrose’s decision to pull back from its Waterside project had left the site’s future in limbo. But Elanco said Friday it will begin planning for the downtown site immediately. It expects the project to take two to three years to complete.
The city of Indianapolis has agreed to help increase accessibility to the site by building a two-way bridge across the river at the current location of Henry Street. In addition, the city and state will partner on the development of a new pedestrian bridge connecting both banks of the White River.
The city plans to use $64 million from a tax increment financing fund to pay for the improvements.
The remaining property along the south and southwest sides of the former GM stamping plant site will be available for future mixed-use development that “prioritizes connectivity, livability and a seamless integration with the adjacent neighborhoods,” the state said.
That is to include 10 acres of outdoor space along the site’s eastern-most border that will facilitate an expansion of White River State Park and improvements to the river and its western banks, the state said.
“For decades, the GM stamping plant served as an anchor for near westside Indianapolis families,” Indianapolis Mayor Joe Hogsett said in written remarks. “When the facility closed, residents mourned the loss—not just because of the economic impact, but out of concern for the long-term vibrancy of the community. Today’s announcement will mark a new chapter for the neighborhood, spurring greater connectivity beyond the Mile Square and catalyzing transformative development opportunities along the White River and beyond.”
Although the move solves a dilemma in Indianapolis, it represents a big loss for Greenfield, home to Elanco for decades. Elanco has been based at Progress Park since 2010, spread out in five buildings over 20 acres in a location highly visible from Interstate 70. Before that, it was about five miles away, near U.S. 40 and Meridian Road.
Elanco did not say how many other sites it reviewed, or whether it seriously considered moving out of state.
In its announcement, Elanco praised the new downtown location, saying it offers the opportunity to build a “smaller, more efficient campus” that should translate to meaningful cost savings and feature lower costs per employee compared with its current operations. The new location will have about 25% less office space than the Greenfield headquarters.
“With a shared vision for the future of the agbioscience industry and the modern, post-COVID era workplace in Indiana, we are pleased Elanco can serve as a catalyst through our global headquarters and base of future consolidated operations and capabilities in Indiana,” Elanco President and CEO Jeff Simmons said in a statement. “In partnership with Gov. Holcomb, Mayor Hogsett and the IEDC, we look forward to continuing our nearly 70-year history in Indiana, building a leading animal health company and serving the Indianapolis community.”
Holcomb called the decision “a momentous day” for Indiana that will position Elanco for further growth and consolidation.
“Elanco is an important asset to Indiana, a leader in our growing agbioscience sector, which is poised to grow and continue innovating,” Holcomb said in written remarks. “We are thrilled with the direction of Elanco’s future and the transformational impact its growth will have on the agbioscience sector, the downtown Indianapolis footprint, and most importantly, the lives of Hoosier workers.”
Hogsett said Elanco’s announcement marks a new chapter for the neighborhood around the old stamping plant, and could spur greater connectivity in the area.
Elanco in August completed the largest acquisition ever in the animal health industry, the $7 billion purchase of the animal-health unit of German pharmaceutical giant Bayer AG.
The purchase elevated Elanco from the world’s fourth-largest animal-health player to the second-largest, behind only New Jersey-based Zoetis.
It boosted Elanco’s workforce from 5,800 to 10,000. Simmons said this fall that he plans to get $300 million in savings by cutting duplicative functions.
Elanco, founded in 1954, was wholly owned by Indianapolis-based Eli Lilly and Co. until September 2018, when the pharmaceutical giant spun it off in an initial public offering.
The now-demolished 2.1 million-square-foot plant metal-stamping plant opened on the site in 1930 and employed more than 5,000 at its peak. That number was fewer than 700 when it closed in 2011.