Home

Join

Main Menu



blog advertising is good for you
Powered by Disqus

Links

Like IB

«
»

Living in a LiteBox*

Someone asked me what I thought about the recent controversy surrounding LiteBox.  For those of you who may have been out of the loop, LiteBox is the pet project of Bob Yanigahara, an California-based entrepreneur who announced last he was bringing his company to Indianapolis and creating 1,100 jobs in the process.  The problem with Yanigahara  is that his  financial past has some serious questions attached to it and it has put Indiana Governor Mitch Daniels and Indianapolis Mayor Greg Ballard in a somewhat awkward political position.  And is gave a an arrow for Democratic Mayoral challenger Melina Kennedy to get in a shot at the incumbent.  So with all that said, here is where I stand.

The LiteBox deal would only concern me if the city and state put up money up front to attract them here to Indy.  The way I understand the deal, there is not one dime of incentives to be paid out unless a job is created.  So as long as that remains the case, I don’t stay up at night worrying about this one.  I do think that holding a news conference may not have been one of the better moves and the city and state should have let things go quietly and then be ready to answer if someone were to call.

I do worry though about what this says for someone who is looking to invest in Indianapolis and will they get similar treatment.  The very nature of entrepreneurship involves a certain amount of risk taking and eccentric behavior; whether you are creating Apple, Angie’s List or IndyPolitics.Org (Shameless plug).

Also, if we are going to get upset over an economic deal where no taxpayer dollars have been given out, then shouldn’t there be an outcry from the critics over deals where incentives have been paid out and jobs promised where never delivered? Case in point, Eli Lilly. The company has received more than $1.6 billion in tax beaks and incentives in exchange for creating  9,500 new jobs in Indianapolis area.   It not only never reached that goal, but actually shed more than 2,000 as part of restructuring.  I am waiting for the outcry.

But back to LiteBox.  Is it a bad deal?  I don’t think so, if no jobs are delivered the taxpayers aren’t on the hook. If the jobs show up, all is forgiven.  Does someone (i.e. BobYanigahara) need to hire a P.R. person for next time, definitely.  See there’s a job right there that’s waiting to be created.

*My apologies to Richard Darbyshire.

Posted: 10|30|11 at 8:49 am by Abdul Hakim-Shabazz
Follow this entry via RSS 2.0. Comment | Trackback

  • John Howard

    When the only credibility surrounding a venture seems to be from political leaders lauding it, the political leaders should not be lauding it  – regardless of whether there is investment risk.

  • Pogden297

    I don’t buy for a second that we would have held Litebox accountable for job creation when we hand them taxpayer money. This City has a long history of not enforcing job committments.  Lilly is only one such example.  Even if Litebox initially hired people to get the taxpayer money, the company could just lay off people and keep the money.  That’s what happened with Navistar which laid off a 1000 people.  This City only got  got a portion of those tax abatements back in a settlement. (Not sure why they settled for only $5 million when $23 million was owed.)  Then 18 months later they are giving Navistar a new tax abatement because they hired 250 people.

  • Ramon

    You are assuming that Yanigahara has enough money to hire a P.R. person for even one day.  This is what it is.  A blatant attempt to manipulate the media for a preelection boost for a losing candidate.  It backfired and made Daniels look horrible.   Word[maybe your famous word on the street] is that Daniels is furious with the Ballard crew.

  • Steved608

    Why is Daniels mad? Last I heard he pretty much made Ballard jump on this? I like my plastic car that runs on water, makes as much economic sense as LiteBox to anyone with a semi functional brain. Don’t forget the money thrown at the United Hub, every job that brought in came from another United facility.

  • pascal

    The whole idea of even thinking that politicians should have a lead role in job creation marks the holder of that idea as a stupid person. Both parties compete to destroy jobs.

  • Dave

    Amen, the expression is private not public enterprise.

  • Rico

    Hey, Abdul, you forgot that Bart got a good gig out of the deal!

  • Think Again

    They should be.

    The city folks were the 90% lead on this, nolt the state.

    Sloppy.  

    And I’m not surprised, Abdiul, that you’re saying exactly the same thing the Mayor is saying.  What a coinkiedink.

    Ramon is absolutely correct.  I don’t know if Ballard is a losing candidate–the voters will determine that.  But this deal should never have gotten past the “what if?” stage.

    And don’t for a minute swallow the 25th floor’s endorsement: that if you question this entrepreneurial attempt, you’re somehow anti-business.

    Typical Reaganistic switcheroo–attack the questioner.

    The raw Google facts should’ve KOed this deal for a little while longer, at least, if not forever.

    It’s just pathetic.

  • Think Again

    Uh–not even close to true, and, those jobs came with the best gaurantee available in the country at the time.

    United’s problem was leveraged debt.   Heavily.

  • Nick

    Yes, your absolutely right.

    We should be more upset about the bigger deals like Eli Lilly, Navistar, and others that have walked away will tens of millions without fulfilling their job creation and/or capital investment promises.

    Who should be holding these companies accountable?

    No one other than Mitch Daniels and Greg Ballard.

    We should be even more outraged and someone should be held accountable at the polls and possibly in court.

  • Nick

    Abdul, this Litebox deal is not risk free.

    Don’t buy this “performanced based” government incentives garbage.

    Companies large and small have walked away will hundreds of millions of taxpayer money with these incentives recently.

    Look at EnerDel which got $80 million in local & state tax abatements, grants, and other government incentives.

    They are restating their earning for the second time, have auditors questioning its ability as a going concern, delisted from stock exchange, and faces investor lawsuits.  Bankruptcy is around the corner.  The money is gone and taxpayers and investors will get nothing back.

    I suspect Daniels and Ballard have not even tried to recover any money from this company for not meeting the initial job or capital investment requirements.

    The scale of this problem statewide would shock everyone.

  • Rico

    Reaganistic?  BS! Try Obamaistic or Alinskyistic! Your history revision is second-to-none!

  • Rico

    Reaganistic?  BS! Try Obamaistic or Alinskyistic! Your history revision is second-to-none!

  • Think Again

    It’s a national phenomena. Almost all expanding/relocating firms make demands, and pit states against one another.  

    There are even highly-compensated brokers in this nonsense.  They secure incentives for companies and get paid a fee.

    Webster needs to redefine “whorish.”

  • Think Again

    It’s a national phenomena. Almost all expanding/relocating firms make demands, and pit states against one another.  

    There are even highly-compensated brokers in this nonsense.  They secure incentives for companies and get paid a fee.

    Webster needs to redefine “whorish.”

  • Dave

    It would be the states who allow themselves to be pitted against one another, vs promoting a healthy climate within their borders.

  • Steved608

    United didn’t hire anyone but maintainence for the hangers.
    Go see all the large houses in the Monrovia area that were built by United employees cashing in on the property difference when they got here.

  • Steved608

    I believe a certain governor got a great gig from Lilly also.Actually the only 8 years he wasn’t a politician. Helps to be a politician from either party. Amazing how politicians can’t be influenced by donations and perks. Just kidding on the last comment.

  • MH

    How about that Indy Star endorsement for Melina Kennedy?

  • Think Again

    It’s real accurate.  You don’t like it, but it is.  Reagan was a master at communicating–and if you didn’t agree, he or his cronies branded you unpatriotic.

  • Think Again

    wel, Steve, that’s just not true.  I know two mechanics who kwent to Vincennes U. for training, and were hired, and worked until it closed.  They report tht Hoosiers were in the majority in every job category.

    Sadly, United wasn’t paying attention to the light-speed changes in the airline industry.  Their goose was cooked.

    Monrovia large houses?  Pshaw.

  • Think Again

    If you want the job,s you have to pony up.

    I suppose if all the states got together and refused, it could be viewed as a restraint of trade…can governmental entities be accused of cartel activity?

  • Turk182

    You forgot to mention the United Airlines Scam!
    Doesn’t make any difference if it’s a Dem or Rep, they all get scammed!

  • Rico

    Who else would a liberal rag endorse?  Hell, they endorsed Julia Carson AFTER she hallucinated during an interview with Tully.  The Star’s not fit to line my ferret’s cage.

  • pascal

    Most especially if you were a draft dodger or a supporter of one.

  • pascal

    You must have missed the Styring take down of the stupid politicians and the United Deal.  Look it up and be smarter than your post indicates.  We are past the Whig version of History and don’t need your childish revision attempt.  As I recall, Styring exposed it before it even happened in the Star…back when folks used to subscribe for content instead of bad habit.

  • pascal

    Uh, States and Localities make prior demands, don’t they?  Indianapolis, for instance says if you locate here we will tax your property and equipment out the ying yang to pay for schools your employees don’t wish their children to attend.  Indianapolis then says, we know our schools are crummy and not worth a warm bucket of spit but we can’t do anything about that.  What we can do is partially re imburse you for our no value demands. That is, Melina was an honest whore when doing “deals”.

  • http://twitter.com/IndyStudent Matthew Stone

    The Stat endorsed 19 GOP council candidates. Rag? Sure. Liberal? Far from it.

  • Steved608

    Sadly I know 4 who built houses in the same neighborhood in Monrovia. Cashed in well on the housing market. I was out bid on 8 acres by a United mechanic from CA.  The promised jobs did not come close to the money thrown.

  • Steved608

    Have to agree, Lilly is doing a “great job” cutting costs and contracting a lot of jobs that used to be considered great ones to be able to land. Sad that the way things are states, cities and muncipalities compete for the promised jobs. It is a race to the bottom anymore.

  • Steved608

    Please someone find me a liberal newspaper here or a radio station.
    I can’t spell Pullium, but last I knew Russ is still in charge or the editorials. Don’t think he is a liberal. Oh I forgot “Evil Gannett Newspaper” My bad.

  • pascal

    When one views policy results it is difficult to find the difference between liberal and stupid.