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Wal-Mart’s Request For CRED
Tax Credit Denied
Wal-Mart is still committed to the Lafayette Square Area despite the Indiana Economic Development Corporation (IEDC) denying the corporation's request for a Community Revitalization Enhancement District (CRED) tax credit.It has been a year now since Wal-Mart's announcement to build a Super Center Store at 46th and Lafayette Road.
"We did apply for the CRED tax credit, and it was declined. However we made the internal decision that a tax credit could conflict with our overall goals for the Lafayette Square. We are not leaving the area and should be moving on the project within the next few months," Wal-Mart Senior Manager Public Affairs Jason Wetzel said.
Wetzel had nothing but kind and empathetic words to say about the state.
"The state has books it has to balance too. The state has been great partner and the Daniels' Administration has been very supportive to our efforts. The Lafayette Square store is a special store. Wal-Mart plans to give beyond a new retail center and employment opportunities to the community. This will be part of the announcement in the groundbreaking ceremony," he said.
Wal-Mart has already demonstrated its desire to be a good neighbor to the area by contributing $10,000 to the Lafayette Square Area Business Coalition to help the organization's cause to bring revitalization to the area. Wal-Mart also has a scholarship program to help the area.
Ryan Asberry of IEDC said the new policy was adopted September 21, 2006 that eliminated retail from receiving the 25 percent tax credit because of the state's fiscal condition.
The IEDC needed to examine how best to use the state tax credit. The IEDC determined that retail location is based on "the market" for support rather than receiving a tax credit.
Asberry noted that the state is glad Wal-Mart is part of the Lafayette Square Area; however, state needs to be good stewards of its tax resources. Lafayette Square Area is the only CRED district in the City of Indianapolis. It was created by state legislation in 2004. This economic tool provides individual businesses with a 25 percent tax credit for new development, improvements, and job creation.
Part of the CRED provision included the state forgoing $750,000 annually in sales tax revenue, so the money could be funneled back to the city for infrastructure improvements to the area.
Tony Armstrong, state budget agency media relations officer, pointed to the state's fiscal condition as the cause for the budget committee decision to place a moratorium on any creation of new CRED areas in the state. The budget committee denied Elkhart and Lawrence their applications to create to CRED districts within their city limits in May of 2005.
This moratorium would also include CRED boundary expansions. This would nix the desire of the Lafayette Square Area Coalition's (LSAC) goals to expand the CRED boundaries. In previous meetings, the LSAC had expressed a desire to expand the CRED district to its original proposed boundaries of the north and south side of 38th Street to Moller Road that would also include the southwest corner of 38th Street and Lafayette Road.
The state budget agency also oversees the $750,000 CRED money that is collected through sales tax in the district. As of January 4, 2007, no sales tax dollars have been collected by the Indiana Department of Revenue to be distributed back to the CRED. Armstrong said it is not unusual for the Indiana Department of Revenue to take this long to establish a CRED tax base line in order to start returning the incremental growth sales from that tax base back to the CRED.
Armstrong said he was aware that the IEDC created new guidelines for existing CREDs that could affect the outcome for businesses applying for tax credits.