Cummins coming to Greenwood

Greenwood’s long-time wish to recruit a tech employer, and its work to develop a key piece of real estate near the interstate both came to fruition this week with the news that global manufacturer Cummins is coming to the city.

Columbus-based Cummins Inc. announced plans on Thursday to build an information technology and digital hub in Greenwood, 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, with the possibility of up to 1,500 jobs if a second phase is built. Most of the initial 500 employees are being relocated from Columbus or Indianapolis. 

Cummins is committing at least 500 employees initially but expecting to employ closer to 750 people in Greenwood. The city has given the company incentives valued at more than $10 million, funded by taxpayers.

“We are finding that our customers are demanding more from our products in regards to information and services,” Cummins CEO Tom Linebarger said.

[sc:text-divider text-divider-title=”Story continues below gallery” ]Click here to purchase photos from this gallery

“Sure they love the engines, but they want to be able to diagnose things with their phones and their laptops … We have a lot of investing to do to make that available to our customers the way they want it.”

Expansions abound

Other announcements on Thursday included additional expansions in Columbus and Indianapolis. The Fortune 160 power generation and diesel engine company announced a $33 million investment in Columbus, mostly for upgrading and equipping the 1.6 million-square-foot Columbus Engine Plant, making it the corporate hub and primary North American manufacturing center for the company’s newest business segment, Electrified Power, officials said.

That expansion is expected to bring 75 new jobs to Columbus, they said.

“Where it all began for diesel it will all began for electrification,” Linebarger said. “We don’t only see ourselves as a diesel engine company, we see ourselves as a technology leader."

In Indianapolis, the company will finish additional space at its Distribution Business headquarters downtown and also occupy additional space at the Salesforce tower.

The global engine manufacturer employs more than 62,000 people worldwide, including 10,000 in Indiana, and is celebrating is 100th anniversary this year.

“Today is a significant milestone and a day of immense celebration as we commemorate 100 strong years of Cummins operating in the Hoosier state and look forward to 100 more,” Gov. Eric Holcomb said. “Cummins has from their beginning been a major force to Indiana’s strong advanced manufacturing sector, and we are so grateful for their commitment to continuous education and training for employees, particularly helping prepare workers for the jobs of the future.”

On track to be the largest

Greenwood Mayor Mark Myers is calling the Cummins investment the biggest economic development move in the city’s history. For decades — besides Endress + Hauser and Tilson — Greenwood has been a logistics and warehouse capital because of its proximity to several major highways and the expansiveness of its available land. The city also has a large retail workforce.

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. It’s something that we’re finally seeing come to fruition. It’s something that we knew would come," Myers said.

Greenwood will serve as the heart of what the company is calling the Cummins Corridor, with the city’s location ideal for commuting to the company’s other offices, and its proximity to the Indy South Greenwood Airport, which the company plans to utilize.

"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 largest employers in Johnson County, and specifically Greenwood. It could become the largest employer in the county.

Besides retail, which is hard to track, Center Grove Schools and Camp Atterbury top the list with 1,100 employees each. Amazon, which is slated to open later this year, is expected to be the largest with an estimated 1,250 employees. In Greenwood, Ulta has 565 employees; Endress + Hauser has 500; and Poynter Sheet Metal has 475, said Dana Monson, director of the Johnson County Development Corp.

Dealing directly with the company

The City of Greenwood bought about 85 acres from County Line Partners 101 for about $7.7 million, and sold 31 acres to Cummins for $10, according to city documents. Giving Cummins 31 acres of land valued at $5 million is one of many incentives the city is providing.

Other incentives or investments by the city include:

  • Up to $3 million for utilities and road improvements;
  • $1.8 million reimbursement for the construction of a parking lot;
  • $1 million grant to Central Nine Career Center to develop an IT curriculum;
  • Space to double Cummins footprint in Greenwood.

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 at least $100,000 in new income taxes annually for Greenwood.

Cummins plans to invest $35 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 property taxes as soon as the building is constructed and occupied.

In addition to the increase in tax income, Cummins 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.

How did this come to be?

The deal has been in the works for about eight months, Myers said. A site search consultant for Cummins approached the city about possibilities. Officials did not know the company’s identity until recently.

“Mayor Myers and his team did an outstanding job of convincing us that Greenwood, Indiana was the place to do it,” Linebarger said.

“Our intent is to be an asset to that community just as we are to Seymour, Columbus and Indianapolis. We want everyone who lives in (Greenwood) to be glad Cummins is there.”

Instantly, the city knew the perfect location.

"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.

Cummins, which announced plans to its employees on Monday and to the public during an event on Thursday at Indianapolis Motor Speedway, plans to break ground on the first of possibly two Greenwood office buildings in August.

"We’re far enough along in this process that, yes, we’re confident they’re coming," Myers said.

"We know the company. We know the company’s history. We know their track record locally. We’re not worried."

[sc:pullout-title pullout-title=”By the numbers” ][sc:pullout-text-begin]

1919: Year Cummins was founded

62,610: Number of company employees worldwide

1.5: Approximate number in millions of engines Cummins built in 2018

894: Amount in millions invested in research and development in 2018

23.8: Sales, in billions, for the company in 2018

2.1: Profit, in billions, for Cummins last year

6: Sales, in billions, in the first quarter of 2019

— Source: Cummins and The Republic (Columbus)

[sc:pullout-text-end][sc:pullout-title pullout-title=”Details of deal” ][sc:pullout-text-begin]

Here is a look at some of the details of the project agreement between the City of Greenwood and Cummins Inc., which announced Thursday it is expanding into Johnson County:

What is Greenwood getting?

Estimated $1.16 million in annual property taxes;

Estimated $100,700 in annual income tax;

Promise from company it will not apply for any property tax breaks;

At least 500 high-paying, high-tech jobs;

Presence of a Fortune 160 company.

What is Cummins getting?

Land valued at $5 million;

Reimbursement for the construction of a $1.8 million parking lot;

Up to $3 million for utilities and road improvements;

Locally trained workers by way of a $1 million grant from the city to the Central Nine Career Center;

Space to double its footprint in Greenwood.

[sc:pullout-text-end][sc:pullout-title pullout-title=”Pull Quote” ][sc:pullout-text-begin]

"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. It’s something that we’re finally seeing come to fruition. It’s something that we knew would come."

— Greenwood Mayor Mark Myers

[sc:pullout-text-end][sc:pullout-title pullout-title=”History of property” ][sc:pullout-text-begin]

The city has offered a variety of financial incentives for a series of developers interested in the property at Interstate 65 and County Line Road, but none of those projects were built. Here is an overview of those:

2007: Cabela’s announced plans for a Greenwood store and indoor water park as part of a 100-acre retail and entertainment project. Greenwood agreed to give Cabela’s an $18 million loan for the project, and spent $130,000 to draw up plans for the loan.

2014: Greenwood agreed to pay up to $2 million for infrastructure improvements as an incentive to GoodSports Enterprises Global for a $22 million hotel and sports complex.

2015: Greenwood agreed to pay $2 million for infrastructure improvements as an incentive to Gershman Partners for the Greenwood Town Center, a $90 million, 700,000-square-foot shopping center.

2017: Greenwood agreed to pay $8.5 million for infrastructure improvements as an incentive to Gershman Partners and Indy Fuel hockey team owners Jim and Sean Hallett for a $40 million shopping center and sports complex with ice rinks, turf fields and basketball courts.

[sc:pullout-text-end]