Lilly's $7M tax abatement in Indianapolis draws bipartisan pushback: reports

Eli Lilly
In 2017, Lilly unveiled an $850 million spending program for U.S. manufacturing and more. (Eli Lilly)

Eli Lilly rolled out an $850 million investment plan for the U.S. two years ago, with a chunk of that earmarked for its hometown. But one of those Indianapolis building projects is getting some pushback now, thanks to a local tax break approved Monday evening.

Despite objections from some local lawmakers, the Indianapolis City-County Council approved a $7 million abatement for Eli Lilly's $91 million expansion project, the Indianapolis Business Journal reports. The vote was 19-6 in favor of the tax break, which is spread over 10 years. It was at least the second local tax break Lilly has won in the last few years.

Several Democrats and Republicans voted against the deal, The Indy Channel reports. Zach Adamson, a Democrat on the council, said it’s the “second or third” abatement “where the city is not seeing any direct benefit,” as quoted by the TV station. The new tax break follows a separate $9 million abatement granted in 2017. Lilly says the project will help it with insulin manufacturing. 

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Lilly doesn't plan new jobs with the latest project, the council member said. Adamson previously expressed concern about custodial pay at the facility. 

“They don’t need it,” he added, referring to the $7 million in savings. “That’s the worst part. Lilly doesn’t need it. The City of Indianapolis does.” 

The mayor’s administration supports the abatement. Deputy Mayor Angela Smith-Jones, J.D., has said Lilly's corporate citizenship more than pays for the abatement amount, the business journal reports.

A Lilly spokesman said the abatement request "is part of a long-term strategic investment in our Indianapolis facilities, particularly in research and manufacturing." Over the last 8 years, the company has spent about $2.4 billion on its facilities in the city, he added, "resulting in the preservation of thousands of highly-skilled manufacturing jobs and the creation of hundreds more."

RELATED: Lilly expands diabetes production in commitment to U.S. manufacturing 

Lilly announced the expansion back in 2017, at a time when the Trump Administration was touting corporate expansions in the U.S., particularly manufacturing expansions. The Indianapolis project was part of an $850 million capital spending plan in the U.S., focused on manufacturing, R&D and general administrative projects.

The Indianapolis project includes upgrading more than 22,000 square feet at an existing site and adding 12,000 square feet, according to The Indy Channel. After the project, Lilly will be better equipped to produce insulin at the site, a spokesperson told the TV station.

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