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.

State law allows tax exemptions on property that is necessary to operate the airport. But township officials think the airport authority has improperly granted exemptions on properties that do not "provide basic facilities for the traveling public."

Rental car companies, some warehouse buildings and private hangars at the airport should all be taxed, the township contends.

The township, meanwhile, laments another point: the 7,700-acre airport's purchase of an estimated $24 million in surrounding land since 1992 as part of a federal program to cut down on jet noise in residential communities.

While the ultimate goal is to redevelop that land into commercial and industrial use, township officials say the airport has lagged in its efforts to do so. As a result, the parcels remain off area tax rolls.

Wayne Township may have an ally in its push to see that land sold. The federal Department of Transportation recently issued a report criticizing airports across the nation for failing to dispose of excess land, said Richard Marchi, a technical and environmental affairs expert for Airports Council International, an airport advocacy group.

Indianapolis airport officials say they are reluctant to sell their land without a cohesive development plan. And much of their property is in small parcels, not large swaths that would be attractive to sizable commercial or industrial building. They also say demand for much of the land has been somewhat meager.

"It's not like I get calls every day from developers asking: 'Will you sell us all this property?' " said Robert Duncan, general legal counsel for BAA Indianapolis, the private firm that runs the airport. "That's the reality of the market."

Similar debates have emerged elsewhere as communities across the nation have looked toward neighboring tax-exempt airports for financial relief in an era of tight public coffers.

Earlier this month, after more than a year of negotiations, Logan International Airport near Boston agreed to pay its hometown of Winthrop, Mass., $900,000 a year to compensate for lost tax revenues. Elsewhere, the city of Norfolk, Va., collects about $1.5 million a year from Norfolk International Airport for the same reason.

The rules governing how the Indianapolis airport manages its land and revenue prohibit the airport from entering into a similar payment-in-lieu-of-taxes agreement.

Meanwhile, Senate President Pro Tempore Robert Garton, R-Columbus, said it would be difficult to get Hinkle's tax idea passed in light of a bigger overall push by state leaders to control taxes. Local leaders in neighboring counties, such as Hamilton, where the airport authority owns land, said they would give the idea some thought.

"It's one of those things where you have to see what the extent of the tax is, where exactly the money is going and what the overall purpose of it is," said Fishers Town Council President Scott Faultless. "I'm not saying yes, and I'm not saying no, but I'd like to take a close look at that bill."

The Apple Tree's Birch is hoping relief, in whatever form, comes soon.

"There are a lot of problems here. It's not just the airport," the Wayne Township resident said. "It's becoming less feasible to live or to run a business here."


Wayne Township officials are pushing several proposals to offset declining property tax rolls. Among them:

-- Push Indianapolis International Airport to sell excess land for development.

-- Collect property taxes from businesses at the airport that, in the township's view, are wrongly granted tax-exempt status.

-- Extend the airport authority's taxing power so it can begin to collect taxes from businesses that lease airport property in all of the region's counties. Some of those new tax revenues would go to Wayne Township.


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