Indianapolis-based GDI Companies had filed a conceptual plan with Hancock County depicting seven buildings totaling over 3.5 million square feet.
HANCOCK COUNTY — Speculative developments are unlikely on a 300-acre site in the western part of the county after a narrow vote denied a tax break for the venture.
The decision marks officials’ cooling sentiments toward the surge of large buildings over the past few years, particularly those built without tenants immediately in mind that end up getting used for logistics purposes.
A developer thinks the site still has potential if a user can be secured and supported by county leaders, however.
The Hancock County Board of Commissioners in February approved Indianapolis-based GDI Companies’ request to rezone over 300 acres of mostly undeveloped farmland north of CR 300N and west of CR 300W to an industrial business park designation. The decision followed an unfavorable recommendation from the Hancock County Area Plan Commission.
GDI filed plans with the county indicating seven buildings totaling over 3.5 million square feet for build-to-suit and speculative purposes, although Mike Sheek, director of business development for GDI, said the plans were purely conceptual.
The developer first attempted to rezone a smaller site at the location – nearly 200 acres – last year. The plan commission opposed that as well, and the board of commissioners never considered it.
With its latest rezone attempt successful, GDI sought a tax abatement that would have gradually phased in the project’s property taxes over the course of 10 years.
Hancock County Council members on Wednesday voted 3-2 against the abatement, with Keely Butrum, Robin Lowder and Mary Noe voting against and Bill Bolander and Kent Fisk voting in favor. Jim Shelby abstained, explaining he wasn’t ready to make a decision. Jeannine Gray was absent.
Sheek and Briane House, a lawyer with Greenfield-based Pritzke & Davis representing GDI, made a case for the tax break before the vote. House noted the site is east and north of sites where county officials have recently approved rezonings and tax abatements for large industrial projects. He pointed out the site is on the west side of CR 300W – the farthest east that members of the board of commissioners have said they want to see the western industrial boom extend.
House also said the project was estimated to have resulted in about $20 million in property taxes to the county over the abatement decade and about $4 million a year after that. He added GDI signed an economic development agreement outlining economic development payments to the county.
Sheek said demand continues to outpace supply for speculative buildings and spoke to the importance of tax abatements, explaining the benefits from them get passed through to building tenants. He said without abatements, rents would have to be higher than those of competitors, resulting in a disadvantage.
“It’s not money in our pocket, and the reason we need it is that we are competing not just with other buildings in Mt. Comfort, but other buildings in central Indiana, in Whitestown, Plainfield, Greenwood, and we’re competing against opportunities in Chicago, Dayton, Columbus and Louisville,” Sheek said. “And this kind of development only happens where there’s some sort of incentive like that.”
Sheek said requests are on the rise in the development world for manufacturing space, with much of it related to the electric vehicle industry. He added GDI was negotiating with an “international high-tech manufacturing company” over the site at CR 300W and CR 300N in Hancock County.
That intrigued council members, but the lack of conclusiveness and possibility of yet more speculative logistical space was a sticking point.
“From my standpoint, I don’t like building more just spec buildings,” Shelby said. “But I’m all for a good manufacturer.”
Fisk agreed.
“Manufacturing – I have to look at much differently than I do everything else, because we haven’t been blessed with a lot of that,” he said.
Fisk made the motion to approve the tax abatement on an initial reading to get it to a public hearing and final reading, but a majority of the council felt it didn’t need to get that far.
Butrum said a trend seems to be emerging of the county’s western industrial development extending east, prompting more landowners to want to sell their land to escape the sprawl, which in turn leads to more industrial proposals.
“I’d be surprised if a lot of the things that we’ve agreed to in the last 12 months even happen in the next five years,” she continued. “I am not at all convinced that demand is increasing for what is already building that appeals to a very small market. Hopefully we onshore more, hopefully there is demand for the sake of what we’ve already done.”
Butrum asked why the manufacturing possibility couldn’t go in GDI’s East 70 Logistics Park, a 10-building project underway west of Mt. Comfort Road south of CR 500N. Sheek said GDI would pitch that location too, but noted it’s running out of room and the site farther east would give a large manufacturer more space to expand.
Noe, also a county council member, said her line in the sand for industrial development is a county road farther west of the area for which GDI sought its abatement.
“I’m not happy with these projects that are going east of 400 right now,” she said.
Sheek said the decision likely means the end of any speculative buildings at the site GDI was eyeing, but potential for another future remains.
“I wouldn’t say it’s 100%,” he told the Daily Reporter when asked if the council’s rejection of the tax break killed GDI’s plans. “There’s some things that we’re working on with some manufacturing opportunities … that I think we can come back for probably. But in terms of just speculative developments that have been going on in Mt. Comfort for the last couple years, I think they’re not interested in any more of that kind of development.”
The lack of the abatement would make it difficult to develop speculative buildings, he added.
“We’re disappointed, but we knew that the mood in the county was changing,” Sheek said. “There’s been a lot of development out there over a very short amount of time. I think a lot of people are starting to feel like it’s enough. But we spent a lot of time on this particular property and think it’s a great site for industrial development, so we’re disappointed that it didn’t go through. There’s still some potential opportunity for something to happen there if it’s for a specific user.”
