In exchange for the $18.5 million, Angie's List is agreeing to hire 1,000 additional workers at an average of $23 an hour. At least, that is what the company and city officials are telling the media and council members. A review of the 22 page "Project Agreement," however, shows that the jobs promise is an illusion.

The Agreement does discuss a job target of 2800 jobs (there
are about 1800 people employed at Angie's List so this would be a 1000 job
increase) at $23 an hour. But the
language reveals an enormous loophole:
During the Retention Period: (A) the Jobs Target shall be the lesser of 2,800 Company
Jobs or the number of Company Jobs existing
on the Target Outside Date; and (B) the Wage Target shall be the lesser of the Average Wage of $23 per hour or the Average Wage for the Company Jobs
existing on the Target Outside Date
(Emphasis supplied) (See Section 10(f)(i), p. 17)
Translation: If by
December 31, 2019, i.e. the "Target Outside Date," Angie's List not
only has not hired the 1000 new workers single person but instead has laid off
500 workers and cut their pay to $15 an hour, the company still will have met
its obligations under the Project Agreement.
It appears that the only time Angie's List is obligated to
hire 1000 workers at $23 an hour average pay is if the company moves its office
out of downtown before December 31, 2020. (See Section 10(f)(i), p. 17) If that happens, then the expiration date for
the contract is extended from December 31, 2020 to April 30, 2025. (See Section 10(g)(ii).)
Pursuant to the Agreement, the failure to not meet jobs
target during the retention period (January 1, 2020 to December 31, 2020) is
not an event of default. (Section 10(f)(ii), p. 17)). Rather the only remedy is to pursue a
“catchup plan." (Section 4, p. 9).
Only if Angie’s List fails to diligently pursue the catchup plan, and is less
than 90% compliant, can the city pursue a remedy with respect to the amount
escrowed. (Section 8(c)(d)(e)(f), pp.
14-15).
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Bill Oesterle, CEO Angie's List |
If that wasn't enough of safeguard to ensure that no
enforcement of the 1000 jobs/$23 an hour promise ever takes place, the
"Sole Remedy" provision steps in.
(Section 9(f), p. 15) Even if Angie’s List fails to meet a project
target or a project compliance percentage, it still is not an event of default
and the sole remedy is a catchup plan under Section 4 or, under Section 10(g) a
requirement Angie's List pay Indianapolis Public Schools $1 million and sign a “Taxpayer Agreement”
which appears to be a document that would limit the right of Angie’s List or an
successor to take a tax assessment appeal during the retention period which
ends on December 31, 2020 if not extended. (Definitions Section, p. 7). But
even that Taxpayer Agreement is sharply limited in that as long as the
challenge is not seeking to reduce the tax burden more than 50%, such a
challenge is not precluded by the Agreement.
(Definitions Section, p. 7).
The only other remedy the City has is to go to court and ask
for specific performance, i.e. to force Angie’s List to meet its promised
targets. (Section 10(f)(ii), p. 17).
But again, by the time you get to the Retention Period, it is irrelevant
as the employment numbers (Section 10(f)(ii), p. 17.) Whatever employment Angie’s List has on December
31, 2019 by definition meets its obligations under the Project Agreement. (See
Section 10(f)(i), p. 17).
Bottom line, the Angie's List jobs promise is certainly an illusion, with any mechanism to enforce it for show only. It appears that what we're buying for $18.5 million is a promise that Angie's List will keep its headquarters in Indianapolis through the end of 2020. But even if Angie's List doesn't live up to that promise, the penalty for the company moving is at best a slap on the wrist - a payment to IPS of $1 million and signing a Taxpayer Agreement that only slightly limits a tax assessment challenge for a handful of years. (See Section 10(g), pp. 17-18).
Bottom line, the Angie's List jobs promise is certainly an illusion, with any mechanism to enforce it for show only. It appears that what we're buying for $18.5 million is a promise that Angie's List will keep its headquarters in Indianapolis through the end of 2020. But even if Angie's List doesn't live up to that promise, the penalty for the company moving is at best a slap on the wrist - a payment to IPS of $1 million and signing a Taxpayer Agreement that only slightly limits a tax assessment challenge for a handful of years. (See Section 10(g), pp. 17-18).
While the Angie's List Project Agreement is not as harshly one-sided as the ROC Agreement, it is filled with meaningless provisions that leave the taxpayers with no guarantee of getting anything for their $18.5 million.
6 comments:
"While the Angie's List Project Agreement is not as harshly one-sided as the ROC Agreement, it is filled with meaningless drivel that leave the taxpayers with no guarantee of getting anything for their $18.5 million..."- which is EXACTLY why career political hacks like Zach Adamson, Jeff Miller, Mary Moriarty Adams, and Maggie Lewis will support it.
Jobs for lawyers?
Jobs for minimum wage earners that are able to write the 'reviews'.
Well.... Now I guess we do not have to worry about Angie's list and this junk deal. Of course it is because of RFRA, not because they are being hounded in court and loosing money or anything like that.
How did the deal from 4 years ago compare to this one?
Anon 943, good question. I didn't have the agreement from last time to review. Needless to say, these agreements are very difficult to review as they're written to be almost completely incomprensible. Reports are that Angie's List made job promises in exchange for the previous subsidy. Whether AL lived up to those job promises who knows. The subsidy money last time was also used to buy property. There was the story in the IBJ that AL CEO Oesterle partnered with someone else to form an LLC, used the subsidy money to buy up downtown property and then sold them at a much higher amount to Angie's List. I kid you not.
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