INDIANAPOLIS, Ind. (Jan. 26, 2015) - The proposal set to be discussed on Monday, regarding an $18 million funding request from Angie's List, has been moved to February 23. Angie's List is requesting more time for their proposal to the Economic Development Committee.
The company is asking for the funds to consolidate and move to a new location at the abandoned Ford plant.
The request would come at the expense of taxpayer dollars. "There is tremendous benefit to this project in terms of improvements and positive activity in this area of the city. The project will include new retail and parking in the neighborhood. There are also protections in the proposals to ensure taxpayers money is being protected. Thinking long term, if the project is approved, Angie's List will be paying taxes on two properties-Ford Building and garage-where no or minimal taxes are being paid now," Angie's List said in a statement.
Dr. Tom Gjerde is a professor of finance and the asst. dean of the school of business at Marian University. He says the request for funding is a red flag for a company that hasn't been profitable. "It doesn’t look the best in terms of the trends you see in terms of the cash that’s coming in and the borrowing they have to do and it looks like a lot of it is short term borrowing," Dr. Gjerde explains.
The proposal would require Angie's List to pay back the funds if they do not show an increase in profit. "If they don’t meet their goals and they get sold, they go bankrupt, there's a number of protections for the city, but this is a risk. It’s like any investment. There’s risk involved. This one has potential to be pretty substantial," says City Councilman Zach Adamson.
Angie's List says if the funds are granted, this is the breakdown:
- $10 million to Angie's List ($9.6 million for the garage and $400,000 for infrastructure).
- $6.75 million to IPS, which currently owns the Ford building and will relocate.
- $1.55 million for costs related to insurance (legal, accounting, underwriting, marketing, etc) and to provide a contingency fund for unexpected issues.
The proposal in front of the Economic Development Committee has been rescheduled for February 23.