IEDC secures budget approval for LEAP pipeline, land and infrastructure

IEDC Senior Vice President Mark Wasky speaks before the State Budget Committee in Bloomington on Thursday, August 22, 2024. (Screenshot of livestream)

Indiana’s State Budget Committee on Thursday approved a combined $101 million for a water pipeline, land and infrastructure for a controversial industrial park.

The Indiana Economic Development Corp. (IEDC) also landed permission to augment its deal closing fund by a separate $101 million for a battery plant project worth $6 billion.

Skeptical and supportive lawmakers sparred during the 90-minutes committee meeting, held in Bloomington.

Sen. Fady Qaddoura, D-Indianapolis, said he was “personally uncomfortable” augmenting funding at the same time Indiana’s low-income residents face a Medicaid “crisis.” He is a non-voting alternate.

The most recent budget allows IEDC to augment its Deal Closing Fund for projects with proposed capital investment of $5 billion or more.

“Hoosiers are contacting us from corner to corner, across the state … We shared some of these examples yesterday in the Medicaid Advisory Committee, and we were unable to help them because of budgetary concerns,” Qaddoura added. “Then we show up here today and ask for a $101 million augmentation for economic development. It really reflects values.”

Sen. Chris Garten, R-Charlestown, countered that the IEDC will pay the money back — “Medicaid is not.”

Shortly after, however, he encouraged IEDC representative Mark Wasky to “expedite those (land sales) as fast as humanly possible” and repay the state’s General Fund within the 2025 fiscal year.

Pipeline advances

The IEDC asked for permission to spend $50 million out of its Deal Closing Fund on a water pipeline stretching from the Indianapolis area to the city of Lebanon in Boone County.

The quasi-public agency said it would hand the funds to the Indiana Finance Authority (IFA) for bond financing. The money would cover the first five years of debt service coverage.

Lebanon hosts the Limitless Exploration/Advanced Pace (LEAP) Innovation District, envisioned as a massive advanced industrial park. Its sole confirmed tenant is homegrown pharmaceutical giant Eli Lilly & Co., with a $9 billion project.

But Lilly and other tenants sought by the IEDC need lots of water for their work, and Lebanon — which has hit water capacity — wants to keep developing.

The pipeline will deliver about 25 million gallons daily to Lebanon, per the IEDC. Citizens Energy Group, which runs Indianapolis’ water and stormwater system, would supply the pipeline.

“They have multiple well fields and multiple treatment plants that they are currently engineering to figure out … the optimum way to draw water,” IFA Chief Operating Officer Jim McGoff said.

The pipeline would “satisfy” water needs in the LEAP District and in Boone County for the next 15-20 years, according to McGoff.

Wasky said the pipeline’s long-term expenses wouldn’t drive up bills for existing ratepayers. He told the committee impacts “will be limited to new tenants of LEAP and new users added to the Lebanon water utility system.”

A larger pipeline stretching 50 miles from Tippecanoe County to the district, capable of carrying 100 million gallons daily, is on pause while IFA researches its feasibility.

The expanded studies are expected to be completed by the end of the calendar year, McGoff said.

The IEDC also asked to spend $36 million on property acquisition, deposits and option payments for about 1,850 acres of land. The acreage is intended for three LEAP District projects.

While the deals aren’t finalized, Wasky said he was “very confident” in IEDC’s ability to secure them.

Finally, the IEDC requested to use $15 million for infrastructure work within LEAP: upgrading roadways, installing a roundabout and installing utilities.

Other approvals

The committee heard a separate request from IFA seeking $25 million to spend on housing-related infrastructure help.

IFA runs a revolving loan fund providing low-interest loans for public infrastructure that supports home construction.

Program Director Sherry Seiwert said the agency hopes to close the 13 loans it made in the first round of awards by the end of the year.

“We’ll have a second round of funding available, based on this appropriation,” she said. The applications go live October 15.

Lawmakers intended the program to help developers build housing that otherwise wouldn’t have been profitable, and to pass savings on to home-buyers.

However, the program doesn’t require a certain number or percentage of affordable units.

“It really depends on what the community tells us what their need is,” Seiwert told Qaddoura. “And so they must submit a housing market study that’s been completed in the last five years, and within that, they need to tell us what type of housing their community truly needs. Is it rental? Is it single family? What is that income cohort that they really need to direct the housing to?”

Qaddoura also asked if there’s been evidence of cost savings passed on to homeowners and tenants.

“We’ll know that a year from now,” Seiwert replied. She said communities must demonstrating cost savings as part of reporting requirements.

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