Unlocking Indiana's Water Future: The Leap Innovation District's Transformative Journey
In a strategic move to drive economic growth and address critical water infrastructure needs, the Indiana Budget Committee has approved a staggering $101 million in additional funding for the Limitless Exploration/Advanced Pace (LEAP) Innovation District in the city of Lebanon. This investment includes a $50 million seed funding for a bond-financed project to bring water from the Indianapolis area to the thriving district, where the Indiana Economic Development Corporation (IEDC) aims to attract more tenants and foster further development.Unlocking the Potential of Lebanon's Water Challenges
Bridging the Water Divide
The city of Lebanon, located approximately 25 miles northwest of Indianapolis, has long grappled with the challenges of its unique geographical position, straddling the White River and Wabash River watersheds. Mayor Matt Gentry acknowledges that the city's maximum water pull of 4.6 million gallons per day, sourced from local wells, has been strained by the growing demands of industrial development, particularly the pharmaceutical giant Eli Lilly, which has invested a staggering $9 billion in the site. With Lilly's daily water consumption of 800,000 gallons, the city's water resources have been pushed to the limit, leaving little room for further expansion.A State-Backed Solution
Recognizing the critical importance of addressing Lebanon's water woes, the state government, through the IEDC, has stepped in to provide a comprehensive solution. The $50 million in seed funding will be used to establish a trust account to cover the interest and principal payments on the bonds for the project to bring water from the Indianapolis area's water utility, Citizens Energy Group, to the LEAP District. This strategic partnership between the city of Lebanon and Citizens Energy Group will ensure a reliable and sustainable water supply to support the district's continued growth and development.Structuring for Sustainable Growth
To ensure the equitable distribution of the costs associated with the water infrastructure upgrades, the city of Lebanon is creating two distinct utility districts. The first will serve the pre-LEAP Lebanon area, catering to the current customers and residents, while the second will be dedicated solely to the LEAP District tenants. This approach aims to shield existing ratepayers from the financial burden, with the expenses structured to impact the new industrial park tenants instead.Unlocking the LEAP District's Potential
The LEAP Innovation District, designated as one of Indiana's two Innovation Development Districts (IDDs), has already attracted significant investment and attention. With approximately 9,000 acres under contract, the majority of which have been annexed into the city of Lebanon and zoned for planned urban development, the district is poised for exponential growth. The IEDC has ambitious plans, with an expected $9 billion in additional investment by the end of this year and a projected $18 billion in total investment within the next three years, all accompanied by the creation of high-paying jobs.The IDD Advantage
The IDD designation, established by the Indiana legislature in 2022, provides a powerful tool for driving economic development. This "big TIF district at the state level" allows the state to capture 88% of the property tax, sales tax, and income tax growth generated within the district, with 12% passed on to local political units. This revenue stream will be crucial in funding the necessary infrastructure and supporting the continued growth of the LEAP District.Balancing Transparency and Accountability
While the LEAP District's progress has been impressive, the project has not been without its critics. The Citizens Action Coalition has raised concerns about the "water management policy" being discussed and formulated in secret, with no public input. This issue of transparency and public involvement in the decision-making process is an important consideration as the project moves forward.Incentivizing Investment, Maximizing Returns
The IEDC has taken a proactive approach to ensuring that the state's investment in the LEAP District is well-structured and financially sound. Through careful analysis of the infrastructure needs and the anticipated usage by incoming tenants, the IEDC has incorporated the costs into the agreed-upon land sales prices. This approach aims to guarantee a fair return on the state's investment, while also providing incentives to attract the desired industries and companies.Transforming Indiana's Economic Landscape
The LEAP District's success is part of a broader strategic shift in Indiana's economic development efforts. Recognizing the need to attract the industries of the future, the state has focused on sectors such as semiconductors, electric vehicles, batteries, energy transition, data centers, artificial intelligence, bioscience, and ad tech. This targeted approach, coupled with the modernization of the state's economic development toolkit, including the introduction of cash performance grants, has positioned Indiana as a prime destination for cutting-edge investments.Revitalizing Rural Communities
The LEAP District's impact extends beyond the immediate boundaries of Lebanon. With 80 of Indiana's 92 counties having lost population in recent years, the state's focus on driving economic growth and job creation in strategic locations like the LEAP District is seen as a crucial step in reversing this concerning trend. By providing high-paying job opportunities and attracting new residents, the LEAP District has the potential to breathe new life into the surrounding rural communities, offering a brighter future for the state's residents.
