Indiana’s budget panel on Friday approved a $120 million request from the state’s economic development agency to close a deal on a hushed advanced manufacturing project, despite transparency concerns from some Democrats on the committee.
The Indiana Economic Development Corporation (IEDC) made the nine-figure ask to provide performance-based incentive funds for an automotive company planning to invest about $3.2 billion in a new facility that — if finalized — could bring 1,400 new high-paying jobs for Hoosiers.
Those performance incentive grants will come out of a $500 million IEDC “deal closing” fund, which was created by state lawmakers in the most recent budget.
When asked by members of the budget committee, Mark Wasky, senior vice president of community affairs for the IEDC, declined to share the name of the company.
He said only that the facility will be located north of Indianapolis, but not in the LEAP Innovation District in Lebanon — where Indiana plans to craft a “high-tech” corridor along I-65 in Boone County, roughly halfway between Indianapolis and Purdue University.
Wasky gave few details about the company, citing non-disclosure agreements and federal security laws.
“With this project in particular, there was an elevated level of concern about any information being released publicly prior to the company notifying their shareholders and having a public announcement,” Wasky said.
The unnamed company is in the “advanced technology automotive components sector.” Wasky said the IEDC plans to announce the project within the next year.
Secretive IEDC request gets the greenlight
He noted that the company has already accepted the IEDC’s offer. To finalize the agreement, Wasky said the IEDC needs to have access to incentive funding.
Mark Wasky (Provided by IEDC)
The $120 million approved Friday by the State Budget Committee will be distributed to the company over the next eight years. Incentive grants will be dependent on the company meeting benchmarks related to jobs, wages and performance, however.
If the deal does not go through, funding will revert back into the IEDC’s closing fund and be available for other projects, Wasky said.
The project will bring an additional $3.2 billion to Indiana’s auto manufacturing industry — raising such investments as a whole to over $9 billion, he added.
“By establishing impactful investment tools, Indiana has attracted unprecedented investment in future-focused industries, and has empowered the organization to pursue transformative investments like this that’ll benefit the state for years to come,” Wasky said.
This is the second time the IEDC has come before the budget committee with a large funding request since the General Assembly adjourned in April.
At its June meeting, the panel approved the IEDC’s request for $122 million to acquire 1,000 acres of land in Boone County for a potential $50 billion semiconductor plant investment.
The budget committee also approved another IEDC’s requests for:
$35 million in performance-based grants for an electric vehicle battery manufacturing operation to be located in St. Joseph County
$20.2 million to acquire property in Boone County for roadway infrastructure in support of Eli Lilly’s planned expansion to the area
$16 million to acquire property in the LEAP District for a possible
$3.2 billion data center $10 million in grants to General Motors’s investments in its Fort Wayne Assembly plant
Ongoing transparency frustrations
Still, Democrats on the committee have been hesitant to move forward with IEDC’s “vague” requests.
“I understand … you don’t want competitors in other states to know what’s going on. But it’s taxpayer dollars,” said Rep. Greg Porter, D-Indianapolis. “I understand business, but I’m still very concerned about the transparency of what’s happening, particularly with some of the leadership within the state that allocates those dollars.”
Porter also expressed concerns about companies’ continued investment in Indiana years after the IEDC makes “a big splash” with a new project agreement.
“We need to understand, what is the real return on investment that we get from these companies that come here, and what did they really create here in the state of Indiana and for those local communities?” Porter asked on Friday.
Wasky assured that IEDC officials “continuously evaluate” the projects and the investments made with Indiana tax dollars.
He said the IEDC completes an annual “look back” on each active project to assess ongoing compliance and benchmark performance under their agreements.
Wasky emphasized that the quasi-government agency additionally undertakes “extensive” return on investment analyses to ensure that each company invests and creates new jobs, and to evaluate the “ripple effects” of projects on local economies.
At least one member of the State Budget Committee – Sen. Ryan Mishler, R-Mishawaka – signed a non-disclosure agreement so he could learn details behind the June request.
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