Tag: tax abatement

Bloomington-Meridiam fiber-to-home internet deal: 3 public bodies, 3 meetings, 3 days

Now pending is a deal between the city of Bloomington and Meridiam, a Paris-based infrastructure company, that would build a fiber-to-the-home network offering symmetric 1-Gigabit service, reaching at least 85-percent of the city.

The image links to a dynamic map. (UG = underground; AE = aerial)

The city describes the deal in terms of a $50 million investment that Meridiam will make. Meridiam has made the arrangement contingent on a kind of “tax rebate” for the company, amounting to $14.4 million over 20 years.

Meridiam says the creation of the wholesale open-access network—after an initial 5-7 year period of exclusive operation by an as-yet-unnamed internet service provider (ISP)—would create about 10 new jobs, with a payroll of about $1.1 million.

Bloomington’s redevelopment commission (RDC) got the legal process started last week, when it voted 4-0 to approve a declaratory resolution.

For the deal to go through, three different public bodies will need to give approvals, at three separate meetings, which are set for Monday (plan commission), Tuesday (economic development commission), and Wednesday (city council) of this week.

The final vote, by the RDC, is set for July 5. Continue reading “Bloomington-Meridiam fiber-to-home internet deal: 3 public bodies, 3 meetings, 3 days” →

First step for Bloomington-Meridiam internet deal OK’d, as current broadband companies ask: Why?

Map of proposed locations of underground and aerial fiber.
Merdiam’s Nick Phillips (Photo from May 31, 2022 meeting)
Scott Layman (photo from May 31, 2022 meeting).
Tom Havens, executive director of the Indiana Cable Broadband Association
Matt Kelley director of government affairs for Comcast distributed a flyer on the company’s digital equity program.
The RDC held its June 6, 2022 meeting in the McCloskey conference room at city hall.

On Monday, the first step towards a $50 million high-speed internet fiber deal, between Bloomington and the Paris-based infrastructure firm Meridiam, got a 4–0 vote of approval from the city’s redevelopment commission (RDC).

The question in front of the RDC was a resolution that declares an economic development area, designating it as a TIF (tax increment finance) area, and approving an economic development plan.

The idea is to rebate about $14.4 million in personal property tax to Meridiam over the course of 25 20 years. Under the agreement, which is not yet finalized, Meridiam will build and operate a fiber-to-the-home network as an open access platform, which eventually any internet service provider (ISP) can use. That’s after an exclusive five-year period for the initial ISP. Continue reading “First step for Bloomington-Meridiam internet deal OK’d, as current broadband companies ask: Why?” →

Tangled web: So-called “spider” TIF for Bloomington high-speed internet deal hits procedural snag

A 2–1 vote by Bloomington’s redevelopment commission (RDC) on Tuesday night is now a procedural bump for a $50 million high-speed internet fiber deal between Bloomington and the Paris-based infrastructure firm Meridiam.

Even though two out of three was a majority of RDC members who were present and voting, Indiana state law and Bloomington’s local ordinance are both clear about the majority vote requirement for the RDC: “[T]he concurrence of three (3) commissioners is necessary to authorize any action.”

So the 2–1 vote meant the motion failed.

Bloomington’s five-member RDC was short-handed on Tuesday, because RDC president Cindy Kinnarney could not attend and no replacement for David Walter has yet been named.

Now, the RDC has set another special meeting to consider the question again, with four commissioners present. That meeting is scheduled for Monday, June 6 at 5 p.m., according to assistant city attorney Larry Allen, in an email message sent to The B Square after the meeting. Continue reading “Tangled web: So-called “spider” TIF for Bloomington high-speed internet deal hits procedural snag” →

Some details emerge on $14.4M “spider” TIF funding for Meridiam’s high-speed internet in Bloomington

Late last year, a high-speed internet fiber-to-the-home project for Bloomington showed some signs of progress after starting in April 2016.

Existing tax increment finance (TIF) area in Bloomington.

In mid-November last year, Bloomington announced that it had about six weeks earlier signed a letter of intent (LOI) with Meridiam, an international player that builds infrastructure.

The $40-million investment by Meridiam, which was announced in November, grew to $50 million in mid-May, when Bloomington made another announcement about the pending deal. The service is supposed to provide up to 1 gigabit symmetric upload-download speeds to at least 85-percent of Bloomington.

The master development agreement (MDA) is not yet signed. But some aspects of the partnership have been sketched out. The basic idea is that the network will be operated as an open access platform, which eventually any internet service provider (ISP) can use—after an exclusive period for the initial ISP.

Meridiam has requested that Bloomington establish a tax increment finance (TIF) allocation area to support the project. Bloomington officials are calling it a “spider” TIF, because of the web-like appearance that will come from following the path of conduit to be installed by Meridiam.

One of the big unanswered questions prompted by the mid-May announcement was how such a “spider” TIF would actually work.

Some of those details about the TIF district have started to emerge—at a city council work session held on Friday, and at Monday’s meeting of Bloomington’s redevelopment commission (RDC).

One of those details is the estimated benefit that Meridiam will receive from the establishment of the new TIF district—around $14.4 million over the course of 25 years. Continue reading “Some details emerge on $14.4M “spider” TIF funding for Meridiam’s high-speed internet in Bloomington” →

Catalent tax break gets just a 6-vote majority from 9-member Bloomington city council, but it’s enough

A six-vote majority on Bloomington’s nine-member city council was enough Wednesday night to grant pharmaceutical company Catalent a tax abatement in exchange for a capital investment of $350 million and 1,000 new jobs.

The additional jobs would grow the pharmaceutical company’s local workforce by about one-third.

[Updated April 21, 2022: In a news release Catalent has announced it has chosen Bloomington as the location where it will be making a $350 million investment.]

Catalent is looking to spend about $10 million on development of real property, possibly by buying more land. The other $340 million would be invested in personal property, which includes all the non-permanent fixtures inside a building, like manufacturing equipment.

The investment by the pharmaceutical company would be contingent on a tax abatement on the additional value for both real and personal property. Real property would be abated at a rate of 50 percent a year for 10 years, making a total of $826,760 in additional paid property taxes and $826,760 in abatement.

The bigger break comes for the personal property, which is 90 percent for 20 years, and totals an estimated $43,450,785 in abated taxes, which is calculated to have a net present value of about $28.4 million.

Speaking in support of the tax abatement was Bloomington’s director of economic and sustainable development, Alex Crowley, who allowed that the cumulative figure for the abatement  is an “eye-popping number.”

Public comment in favor of the abatement came from current and former elected officials, including former mayor John Fernandez (1995–2003) who also served as assistant secretary of Commerce for Economic Development Administration in the Obama administration.

Fernandez said, “This decision isn’t so much about Catalent—it’s about creating economic opportunities for our community, for people in our community who are at risk of being left behind in an ever changing dynamic economy.”

Speaking against the abatement during the public hearing was Ariana Gunderson, who said, “Being a company town is a really good situation for a company, but not for a town.” She added, “I am astonished that the city would invest so much money into the profits of a company instead of into its people.” Continue reading “Catalent tax break gets just a 6-vote majority from 9-member Bloomington city council, but it’s enough” →

Catalent tax abatement OK’d in first of two Bloomington city council votes: 9–0

Bloomington’s city council voted 9–0 on Wednesday night to approve a tax abatement for Catalent in exchange for a capital investment of $350 million and 1,000 new jobs.

Final approval will require a confirmatory vote on March 2, after a public hearing.

The additional jobs would grow the pharmaceutical company’s local workforce by about one-third.

Catalent is looking to spend about $10 million on development of real property, possibly by buying more land. The other $340 million would be invested in personal property, which includes all the non-permanent fixtures inside a building, like manufacturing equipment.

The investment by the pharmaceutical company would be contingent on a tax abatement on the additional value for both real and personal property. Real property would be abated at a rate of 50 percent a year for 10 years, making a total of $826,760 in additional paid property taxes and $826,760 in abatement.

The bigger break comes for the personal property, which is 90 percent for 20 years, and totals an estimated $43,450,785 in abated taxes, which is calculated to have a net present value of about $28.4 million.

Because tax increment finance (TIF) capture is calculated on real property but not personal property, the impact of the abatement on TIF revenue would not be significant.

In the state of Indiana, the tax abatements don’t have an impact on the tax levy, that is, the amount of taxes collected by local governments. But an abatement does have an impact on how the tax burden is distributed across different taxpayers.

Councilmember Ron Smith was sanguine about the tax abatement. “I just think this is a fantastic opportunity,” Smith said.

Some councilmembers said they were voting yes Wednesday night, but seemed to leave open the possibility of voting no two weeks from now. Their concerns included: some skepticism about the “but for” criterion for tax abatements; the ability of Bloomington’s market to absorb the demand for additional housing; and the diminished income tax benefit of the new jobs due to out-of-county location of workers. Continue reading “Catalent tax abatement OK’d in first of two Bloomington city council votes: 9–0” →

Bloomington to woo Catalent with tax break as pharma company might invest $350M, add 1K jobs

By the end of 2026, Catalent might spend $350 million, in order to expand its Bloomington operation at South Patterson Drive in the southwestern part of town.

The project would add 1,000 new jobs, growing its local workforce by about one-third.

The pharmaceutical company is looking to spend about $10 million on development of real property, possibly by buying more land. The other $340 would be invested in personal property, which includes all the non-permanent fixtures inside a building, like manufacturing equipment.

The investment by the pharmaceutical company would be contingent on a tax abatement on the additional value for both real and personal property. Real property would be abated at a rate of 50 percent a year for 10 years, making a total of $826,760 in additional paid property taxes and $826,760 in abatement.

The bigger break comes for the personal property, which is 90 percent for 20 years, and totals an estimated $43,450,785 in abated taxes, with $4,827,865 in additional taxes to be paid.

It’s not a done deal, even if Bloomington’s city council grants the abatement, in a series of steps that will start at its meeting next Wednesday, Feb. 16.

That’s because Bloomington is just one of a number of other places in the country that are in the running for Catalent’s potential expansion in production capacity.

At the city council’s Feb. 4 work session, Bloomington director of economic development Alex Crowley put it like this: “[Catalent has] not made a decision—we are competing for this investment with other areas in the nation. They have biologics plants—as you’ll hear as part of their presentation, around different parts of the country.”

Crowley added, “Bloomington, I think, stacks up pretty well, from a talent perspective, from a quality of life perspective, the site, and the adjacent land availability.” Continue reading “Bloomington to woo Catalent with tax break as pharma company might invest $350M, add 1K jobs” →

Tax abatement for affordable housing project next to new park to be weighed by Bloomington city council

By December 2022, Bloomington is expecting to see completed construction of Retreat at the Switchyard, a new housing project with 48 apartments designated as affordable.

The project is a 64-unit, 5-story building with first-floor retail space at the 1.5- acre site of the former Night Moves building on South Walnut Street, next to the new Switchyard Park.

To help the project along, Bloomington’s city council will be considering a resolution at its regular meeting on Wednesday that will take the required steps to give the project a tax abatement.

The resolution would set up the relevant parcels as an economic revitalization area and would approve a 10-year abatement schedule that would waive a total of $154,370 in taxes.

The first year’s abatement would be 100 percent of the taxes owed. That percent would ratchet down over a decade, so that $175,690 in taxes will have been paid by the end of the abatement period.

Next steps, after Wednesday’s expected council action to adopt the resolution, include a public hearing that’s set for June 16. The June 16 hearing will be followed by a city council vote to confirm, amend, or rescind the resolution adopted on June 2.

Another step, before construction can start in August on Retreat at the Switchyard, is a site plan review by the city plan commission.

Also at Wednesday’s city council meeting, a report will be heard on compliance for eight other tax abatements previously granted by the city council. Continue reading “Tax abatement for affordable housing project next to new park to be weighed by Bloomington city council” →

Change to Bloomington tax abatement policy swaps in capital investment for job creation, making it easier to justify affordable housing projects

A change to the city of Bloomington’s tax abatement policy, approved by the city council on Wednesday last week, will make it easier for affordable housing projects to satisfy abatement criteria

The change replaces the basic criterion for tax abatement. In the previous policy, the basic requirement was that the project create full-time, permanent living-wage jobs.

In the revised policy, which won unanimous approval on Wednesday night, the basic requirement is creation of capital investment as an enhancement to the tax base.

Job creation is still a part of the mix for tax abatements. But it has the same status as two other criteria, listed under the basic requirement about creation of capital investment: significant increases to existing wages; and creation of affordable housing units. Continue reading “Change to Bloomington tax abatement policy swaps in capital investment for job creation, making it easier to justify affordable housing projects” →

Bloomington’s city council asks for dollar amounts on active tax abatements, accepts report saying all are in “substantial compliance”

cropped tax abatement 2020-08-02 at 4.39.40 PM
Image links to dynamic version of the map, with clickable dots that reveal links to the resolutions on the tax abatements approved by the Bloomington city council, including vote tallies.

At last Wednesday’s regular meeting, Bloomington’s city council accepted a report about tax abatement activity over the last year, from the city’s five-member economic development commission (EDC).

The oldest tax abatement reviewed by the council dates back to 2013. The most recent one was last year.

By accepting the report, without taking further action, councilmembers were acknowledging that the companies are in “substantial compliance” with the commitments they made—related to jobs and affordable housing—that led the city council to grant them a tax abatement.

Councilmembers have requested that city staff provide some followup information, about the dollar amounts of tax abatements.

And the city council will likely soon be asked to approve revisions to the  guidelines on tax abatement compliance. The point of the revisions is to ensure that affordable housing projects don’t get analyzed as non-compliant due to a failure to create or retain the jobs they indicated in their applications. Continue reading “Bloomington’s city council asks for dollar amounts on active tax abatements, accepts report saying all are in “substantial compliance”” →