Indianapolis Int'l Airport Blamed for Small Business Slump

Neighboring businesses claim that Indianapolis International Airport's land policies and its tax-exempt status are placing an unfair burden on the community.

Dec. 25--The Apple Tree Restaurant in Wayne Township is a few blocks from the runways at Indianapolis International Airport, so anyone sitting at one of its window booths can watch planes coming in for a landing or just after takeoff.

Yet that proximity to the airport's 8 million yearly travelers and 12,000 employees has not shielded the Apple Tree's co-owners -- Bill Birch and his uncle, Alex Birtsas -- from an economic slump that has turned this corner of Marion County into a collection of decaying storefronts and empty parking lots.

To township leaders, one of the biggest culprits in the decline is the airport itself. They contend the airport's land policies and its tax-exempt status are placing an unfair burden on the community, including small businesses like the Apple Tree.

In response, Wayne Township is lobbying for a number of changes, including one that returns to the tax rolls a number of businesses at the airport that are now exempt from taxes. It also is pushing the airport to sell some of its excess parcels to private, tax-paying businesses.

In addition, state Rep. Phil Hinkle, R-Indianapolis, plans to propose an idea in the upcoming General Assembly that would expand the airport authority's taxing powers by allowing it to collect property taxes on airport-owned land in any Central Indiana county. Hinkle envisions an arrangement similar to the multi-county levies being used to finance the new Colts stadium. Hinkle, who represents the township, said doing so would allow "everyone who benefits from the airport in the region to pay their fair share."

The proposal, however, could run into trouble with lawmakers as they try to keep taxes in check.

The issue reflects a larger debate about tax exemptions for airports that is playing out across the nation.

Wayne Township's hardship comes at a time when the airport is undergoing a $1.07 billion expansion that will move its main entrance west. That shift is expected to spur a wave of new development in neighboring Hendricks County, further throwing into question the fate of Wayne Township businesses near the present entrance.

Airport officials are mindful of Wayne Township's concerns. But they point out the airport doesn't rely on the township for services. The airport, they say, sustains itself mainly through airline fees, maintaining its own roads and paying for its police and fire operations.

"The airport is providing an essential public service on its own revenue," said Patzetta Trice, an airport spokeswoman.

Wayne Township's immediate outlook is less than promising.

Assessed property values within the township have declined from $7.5 billion in 2002 to $6.4 billion this year, according to local officials.

The recent closings of two local manufacturing plants -- Olin Brass and a Chrysler foundry -- shaved about 1,300 jobs and cost the township tens of thousands of dollars in property taxes. The township's population of 133,000 has remained virtually level since 2000, according to the latest U.S. census data.

Next year's statewide repeal of the so-called inventory tax -- a fee on warehoused goods -- is expected to cost Wayne Township about $1 million in lost revenue.

Those figures, coupled with a recent wave of hiring to bolster the ranks of the local Fire Department, have strained the township's nearly $20 million annual budget.

"When places like Olin Brass get torn down and when things like the inventory tax go away, then homeowners have to pick that up" through higher property tax rates, Township Trustee Dan Gammon said.

Hinkle and others argue the airport should be doing more to help.

Township officials have identified 30 businesses on airport land that they think should not be exempt from taxes. If taxed, these businesses would generate $1.6 million in tax revenue annually, they said.

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