Monday, March 2, 2015

Angie's List $18.5 Million Subsidy Will Cost Indy Taxpayers for the Next 25 Years

Tonight's vote in the Indianapolis City-County Council for an $18.5 million subsidy for Angie's List would actually be a loan by which Indianapolis taxpayers borrow money in the form of tax increment revenue bonds to be paid off over 25 years.  The interest rate on the bonds can go as high as 6.5%.

So a quarter century from now, the City's taxpayers will still be paying for the 2015 Angie's List subsidy voted on tonight.  This comes on the heels of $14.6 million in subsidies given to Angie's List in 2011.  Presumably that was also paid with a 25 year downtown TIF revenue bond.

Unfortunately, I was unable to obtain the Project Agreement which would have more specifically addressed job creation promises, and the supposed clawback and creation of an escrow account.  Section 3.2 of the Financing Agreement, which I did obtain, opens up the possibility of an interpretation that a sale of Angie's List would not obligate the buyer of the company to stay in Indianapolis:
The Company agrees that it will maintain its existence as a [corporation], will not dissolve or otherwise dispose of all or substantially all of its assets, and will not consolidate with or merge into another entity, or permit one or more other entities to consolidate or merge with it; provided, however, that the foregoing provisions of this Section shall not apply, and the Company shall not have any such obligations in the event of: (a)(i) the sale or transfer of all of the ownership interests in the Company or of all or substantially all of the assets of the Company for which the costs of construction or equipping are being financed with the Bond Proceeds, or (ii) a merger, consolidation, reorganization or spin‑off involving the Company or such assets, either alone or in conjunction with other assets; if the surviving, resulting or transferee entity, as the case may be, assumes in writing all of the obligations of the Company under this Financing Agreement; or (b) the occurrence of any transaction described in Section 9.4(b) of this Financing Agreement.
My guess is that few councilors have actually read the Project Agreement to know for certain what Angie's List contractual responsibilities are.   They could well be signing off on an agreement as one-sided as the regional operations center contract.  But what the is only $18.5 million.


Anonymous said...

So much for that liberal schmuck Zach Adamson who screeched at critics how he was "making money with taxpayer money" for the completely dishonorable Angie's List deal. Are all CCC District 16 voters aware of the economic illiteracy of this career political hack?

Aside from the sheer lunacy of his ignorant economics credo, "taxpayer money" is not the porcine Adamson's to dole out as if our money was his to "invest"... Too bad his opponent in November is a proved loser.

Nicolas Martin said...

If Anonymous thinks this sort of thing is merely the product of liberalism, he should visit Hamilton County, Indiana, where conservative Republicans have honed tax-funded payoffs to a sublime art.

There are none so blind as Republicans who harbor beliefs about their party's fiscal conservatism that have been delusions since the 1950s.