A global engine company headquartered in Columbus is expanding across Indiana and moving 500 technology jobs to Greenwood, the company announced Thursday.
Cummins Inc. plans to build an information technology and digital hub at the southeast corner of Interstate 65 and County Line Road. The 100,000 square-foot office building is expected to bring at least 500 jobs that pay, on average, $100,000, including benefits, as early next year.
The city is giving the company an incentive valued at more than $10 million.
The company said it could expand its Greenwood footprint with an eventual 1,500 jobs.
Most of the initial 500 employees will be transferring from offices in Columbus and Indianapolis, the company said, but it will include some new jobs as well.
Greenwood has long wanted to recruit a tech employer to the city, and at the same time has struggled to develop key property near the interstate. Several previous plans for the property have fallen through.
Cummins, which announced plans to its employees on Monday and to the public during an event this afternoon at Indianapolis Motor Speedway, plans to begin construction in August.
Greenwood Mayor Mark Myers is calling it the biggest economic development move in the city’s history. For decades — with the exception of retailers and employers Endress + Hauser and Tilson — Greenwood has been a logistics and warehouse hub because of its proximity to several major highways and available land.
This changes things.
"Getting a leading corporation to relocate into the Greenwood market, for us, is absolutely huge. It’s something we have been waiting for for a long time," Myers said.
"It’s something that we’re finally seeing come to fruition. It’s something that we knew would come."
Greenwood will serve as the heart of what the company is calling the Cummins Corridor, the city’s location ideal for commuting to and from the company’s other offices, and its proximity to the Indy South Greenwood Airport, which the company plans to use.
"They’re bursting at the seams in Columbus, and there’s no where else to expand (there)," Myers said.
The move will make Cummins one of the top employers in Johnson County, and specifically Greenwood.
The City of Greenwood bought about 85 acres from County Line Partners 101, LLC for about $7.7 million, and is selling 31 acres to Cummins for $10, according to city documents. The 31 acres, valued at $5 million, is one of several incentives the city is providing.
Other incentives or investments by the city include:
<li>Up to $3 million for utilities and road improvements;</li>
<li>$1.8 million reimbursement for the construction of a parking lot;</li>
<li>$1 million grant to Central 9 Career Center to develop an IT curriculum at Cummins’ request;</li>
<li>Space to double its footprint in Greenwood.</li>
In return, the company agreed to not apply for any tax breaks, and to produce at least 500 jobs immediately. If it does not, as a protection for Greenwood, Cummins will owe the city the difference in income tax that would have been produced by those jobs, city documents show.
Johnson County’s income tax rate is 1 percent for local workers who live in the county, and 0.25 percent for local workers who live outside the county. Greenwood should get about 20 percent of the local income tax collected in the county next year.
Based on estimates, Cummins would bring in up to $100,000 in new income taxes annually for Greenwood.
Cummins plans to invest $35 million to $40 million in the property, and city officials estimate an assessed value of $40 million, which would result in about $1.16 million in property taxes annually.
Cummins will owe full taxes as soon as it is built and occupied.
In addition to the increase in tax income, the project will spur further development east of the interstate, the kind of development the city has been waiting for, Myers said. The city hopes to attract upscale hotels, restaurants and retail to the rest of that property, he said.
The deal has been in the works for about eight months, Myers said. A site search consultant for Cummins approached the city about possibilities. But city officials did not know the identity of the company until recently.
"We naturally selected that piece of ground. We thought we’d take it in a different direction this time because we’ve had complications on that site," Myers said.
"I’ve always said that once somebody lands on that piece of property, (that area) is going to take off. I am convinced that it is. This is just the start of a lot of good things."
Greenwood plans to use the remaining land as collateral for those other businesses.
"The sky is the limit," he said.
The city’s redevelopment commission on Thursday morning unanimously approved all funding for the project, which will come from the city’s eastside tax-increment financing district.