Thursday, March 12, 2009

Campaign Contributor and Barnes & Thornburg Client Holladay Properties Receives 10 Year Tax Abatement Worth Millions

Brendan O'Shaughnessey of the Indianapolis Star reports:

The city of Indianapolis is drawing up plans to become a partner in what's envisioned as one of the largest warehouse and distribution center complexes in Central Indiana in exchange for granting the developer a 10-year tax abatement.

Mayor Greg Ballard, who announced the preliminary deal with Holladay Properties, said the city was willing to give up a portion of tax revenues for a time to help draw tenants to the 205-acre site near Indianapolis International Airport.

If all goes as planned, Holladay will have built nine buildings totaling about 3 million square feet at its AmeriPlex development over the next five years. Indianapolis will receive a 1 percent ownership stake in the project.

The amount of the tax breaks Holladay will receive won't be known until the value of the buildings is determined, which will depend on tenant needs. Abatements are phased out over a period of years; they are typically used as incentives for expansion or recruitment of new development that brings in extra tax revenue for a city.

In other such deals, the amount abated depends on the size of the investment and jobs created. For example, a development group received an $8.3 million abatement in 2004 to build the Conrad hotel Downtown and generate 240 jobs

What was not reported by the Indianapolis Star is that Holladay Properties was one of those post-election contributors to the Mayor's campaign, giving him $1,500. (Corporations like Holladay can only contribute a total of $2,000 a year to all local campaigns combined under Indiana law. That's why corporations often have their officers give money directly to campaigns on an individual basis.) Holladay Properties has also been a client of Barnes & Thornburg, the law firm that dominates the decision-making in the current administration.

While the City lauds its 1% ownership in a project that might not make any money, the abatement will negatively affect the tax base of Decatur Township and result in higher taxes for property owners in that area. Although the Mayor criticized these types of tax abatements during his campaign, he now appears to be embracing them as part of his post-election corporate outreach that leaves ordinary taxpayers out in the cold.


Diana Vice said...

A little off subject, but you can check B&T Lobbying Reports here if you'd like to see who all their clients are & how much money they're raking in.

Paul K. Ogden said...

Not at all off-subject. That's how I found out. Holladay was listed as a lobbying client of Barnes & Thornburg in 2006. I didn't see them listed any other year.

M Theory said...

And my question is how many warehouses or similar facilities are already built that are not yet leased?

And has anyone ever noticed that pretty much all of Meridian Street from 38th south to the circle is for sale or lease?

It's nice that the new mayor is taking such good care of his new friends, as he back stabs his old ones.

Sean Shepard said...

Get rid of property taxes completely, nobody then needs a special (or insider) deal to get an abatement.

Any company wanting to move or build here would automatically get the tax advantage.

It also prevents a tax abated big box retailer, for example, from having an advantage over an established retail merchant. said...

How to end Indiana's 9% unemployment: End property taxes.

From 2004

Unigov said...

How does the city own 1% of something ? Probably thru owning stock.

But the city cannot legally own stock - the state and therefore the city cannot own stock in a corporation.

I have HAD IT with Ballard.

Sean Shepard said...

And, really, one percent?? What is the point.

First we have Congress owning shares in financial institutions now our cities are partnering up with private real estate developments??

It's bad enough the sports arenas, convention halls and golf courses should be privately owned and operated and aren't.