LEAP spending nears $1B with projected budget shielded, investigation finds

Yahoo

24-02-2025

A rendering of the Limitless Exploration/Advanced Pace Research and Innovation District. (Via Indiana Economic Development Corp.)
Indiana has poured almost $1 billion into a contentious technology park with few tenants and a mystery budget, reporters with the Arnolt Center for Investigative Journalism and the Indiana Capital Chronicle have found.
The Limitless Exploration/Advanced Pace (LEAP) Research and Innovation District, led by the Indiana Economic Development Corp. (IEDC), is among the costliest economic development projects Indiana has attempted.
But the agency's quasi-private structure obscures its spending and who benefits. And it's withholding the project's budget from public disclosure.
Arnolt Center for Investigative Journalism staff Max Reich, Marissa Meador, Mia Hilkowitz, Alaska Jones, Libby Erlenbaugh and Zoe Benson co-wrote this special report.
Throughout a six-month investigation, reporters tallied spending on land, water and more — accounting for $985.1 million. They reviewed business contracts across multiple agencies, environmental reports, property data and responses to public records requests, in addition to speaking with public officials.
The IEDC said it has received $693.9 million in state-appropriated money for LEAP since 2022. Of that figure, $574.1 million has already been spent, $41.1 million is dedicated to land under contract and $78.7 million remains in the coffers for additional property and infrastructure. The agency's figure doesn't include LEAP-related spending by other state departments.
Outcry from concerned residents, elected officials and environmental groups has shadowed LEAP since it went public nearly three years ago.
Now, campaigns to toughen water regulations are gaining momentum within the Indiana General Assembly even as proposals to increase oversight of IEDC teeter. And lawmakers on opposite sides of the aisle describe different levels of access to information about the agency's activities.
'Communication comes from relationships, from trust, (when) both parties know that you're willing to work with one another, even if you don't agree all the time. … And passing a bill doesn't really make that happen,' Senate President Pro Tempore Rodric Bray, R-Martinsville, said of IEDC. 'So, … whether there's more legislation on this or not, we'll continue to try and make sure that communication is really good.'
But Rep. Ed DeLaney, D-Indianapolis, wants more.
'We don't have a mechanism for the Legislature to conduct any oversight,' he said. '… We know what the schools are doing; we know what the National Guard is doing. We know what the Department of Transportation is doing, but we don't know what IEDC is doing.'
New Republican Gov. Mike Braun, meanwhile, 'remains committed' to the project, according to spokeswoman Molly Craft.
'Future development on the site, as well as elsewhere in the state, will be mindful of existing resources and as transparent as possible in the planning,' Craft wrote. 'As he has made clear previously, Gov. Braun's strategy for the IEDC is an increased focus on helping existing Indiana companies grow to their fullest potential while empowering entrepreneurship.'
Inspired by North Carolina's Triangle Innovation Park, Indiana leaders hope LEAP will boost the state's competitiveness for big, job-rich developments by making thousands of acres of land 'shovel-ready' for manufacturers, researchers and corporate headquarters.
The Boone County district is close to three interstate highways and the Indianapolis International Airport, and lies between university research hubs in Indianapolis and West Lafayette. According to its website, IEDC expects the district to house hundreds of companies and employ over 50,000 people focusing on life sciences, microelectronics, clean tech, and electric innovation.
Eli Lilly & Co. is LEAP's sole confirmed tenant. The homegrown pharmaceutical giant plans to invest $13 billion into a research and medicine-manufacturing facility, creating an estimated 1,300 jobs, WFYI reported. Meta, Facebook's parent company, struck a 'tentative deal' with the city of Lebanon in November for an initial $800 million investment, Inside Indiana Business reported. It's the first of six potential phases of development, which could take Meta's investment to nearly $5 billion. But no public contracts have been signed.
'We got, you know, a nearly $14 billion investment for Eli Lilly,' Bray told the Capital Chronicle. 'If nothing else happens up there, I think you'd probably call that a success. But I think there's lots of other things that are going on there that will ultimately pay really nice dividends for the state of Indiana.'
IEDC has partially funded the district using state tax dollars. But it's not subject to the same regulations as other government agencies. While operating as a broker to attract companies, the IEDC has labeled some of its expenses, budgets, and spending as proprietary information, making it difficult to track spending.
Arnolt Center reporters sought the agency's budget for LEAP in an October public records request, but were denied. In a letter, IEDC Deputy General Counsel Andrew Lang wrote the budget was withheld because it's 'considered deliberative and speculative in nature.'
'The IEDC sees the LEAP Research & Innovation District as instrumental in landing significant economic development wins that will benefit Hoosier families for generations to come,' IEDC Spokeswoman Erin Sweitzer wrote to the Capital Chronicle. 'Lilly's strategic investment is the first example of that. While we are sometimes limited in what we can disclose publicly, we are committed to operating with as much transparency as possible while remaining good stewards of Hoosier tax dollars.'
She emphasized that all funding has won approval from entities like the General Assembly and State Budget Committee.
Democrat lawmakers were skeptical.
'We scrutinize every penny that goes out when any agency comes into Ways and the (State) Budget Committee,' said Rep. Chris Campbell, who sits on the House's budget-building Ways and Means Committee. 'Yet we seem to be OK with giving, again, free rein to these appointed, non-elected positions, and allowing a lack of transparency about those dollars.'
Asked about LEAP's budget, one of the top state budget architects said it 'isn't one big project.'
Sen. Ryan Mishler, R-Mishawaka, prefers to take a deal-by-deal approach to LEAP. He leads the Senate's powerful Appropriations Committee and recently chaired the oversight-providing State Budget Committee.
'It's not like you just have a plot of land and it's one (Innovation Development District), and you're trying to bring companies,' Mishler told the Capital Chronicle. 'Each company is its own IDD, so it's its own little investment district. (LEAP) is only going to be as big as however many companies we can bring into it.'
Lawmakers created IDDs in 2022. Sweitzer confirmed that, thus far, Indiana has designated one IDD for Lilly's development at LEAP and another for an unrelated semiconductor facility in West Lafayette.
As of October last year, the IEDC had spent almost $427 million on about 5,800 acres of mostly rural land, according to Lang — paying more than $73,500 per acre. Some was farmland and some hosted improvements like houses.
Arnolt Center reporters verified nearly all funds allocated for these land acquisitions by aggregating publicly available property records.
The IEDC continues to buy land. It has dedicated $41.1 million to parcels under contract, according to Sweitzer. The agency denied a public records request seeking those parcels.
IEDC is also making sales.
The agency sold 605 acres back to Lilly in April 2023, recouping about $60 million, per Lang. Meta's proposed data center would be 1,400 acres.
But most of LEAP remains unclaimed — and is a target for skeptics.
Boone County farmer Tyler Everett wouldn't mind if a private developer snapped up 1,000 acres in the area. Using public money to push private development, he said, is 'irresponsible.'
'When the state comes in with my tax dollars and says, 'Hey, we're gonna spend oodles amount of money to buy up all this property and then resell it, hopefully, trying to make a buck — I don't agree with that,' Everett said.
Others contend IEDC overpaid.
DeLaney said the agency's 'refusal' to use eminent domain — a broadly unpopular but lower-cost way to seize private property for public use — led it to pay 'exorbitant prices and really enrich a small number of people.'
'The theory, which is panning out in the Lilly part, is that, well, we overpay, but the manufacturers that come in will overpay us to buy the land from us,' DeLaney said. 'To me … that's an accounting maneuver. Because if they're going to overpay us for the ground, they're going to want something else … some tax break or some incentives or improvements.'
The IEDC's purchases are inflating price tags on farmland surrounding LEAP, said Brian Daggy, a retired soybean and corn farmer who lives within the district. He is a member of the Boone County Preservation Group formed in opposition to the LEAP project.
When a farmer sells their land, they can avoid taxes on the profits if they reinvest in the same business — in this case, buying more farmland. But with the IEDC buying land at high prices, farmers on the receiving end of the money are driving up bids for land, Daggy said.
High prices could work in the state's favor if there's extra land.
'The state's controlling the land and getting options on the land, but if they don't think they're going to fill it, they can sell the land off too,' Mishler said. 'And then think about the value of the land out in that area, how much it's gone up since they started doing the development.'
But LEAP also has holes — and they're worth a lot.
IEDC has already dedicated some money to filling the gaps. DeLaney, the Indianapolis Democrat, feared IEDC holds 'a very poor negotiating position.'
Daggy is one of those holdouts.
His home sits in the middle of the LEAP District because he refused the IEDC's initial offer for his land. Though he's not sure what the future holds for him, he can already see the construction lights from the Lilly site through the trees at night, blotting out the stars.
As IEDC pieced together parcels for the sites, the agency found itself in a water supply boondoggle, teeing up a series of costly studies.
It has spent about $15 million dollars on water-related contracts, according to Arnolt Center reporting. Another $155 million from an Indiana Finance Authority (IFA)-administered program has been committed to a LEAP-related water supply project.
IEDC's most expensive water-related contract, worth $10.2 million, was with engineering consultant Black & Veatch for LEAP water management, treatment and storage services.
It also struck a $2.9 million contract with engineering firm INTERA to determine if the Wabash River could supply enough water for a proposed pipeline that would divert 100 million gallons a day to the LEAP District. The 2023 executive summary and study indicated two wells could sustainably produce 30 million gallons of water a day but didn't define an upper bound.
Anti-pipeline lawmakers and their communities questioned the results' independence, arguing that IEDC paid for a study to support its own project. Former Gov. Eric Holcomb directed IFA to take over in late 2023, weeks before he — along with Bray and House Speaker Todd Huston — assured Tippecanoe County officials of a pause on the proposed pipeline until after the expanded water studies were done, WFYI reported.
IFA expanded the study to include more counties, paying more than $2 million in contracts to Stantec Consulting Services, the Indiana University Geography Department and Jacobs Engineering Group, according to monthly invoices obtained by Arnolt Center reporters. It also paid $45,000 to Wessler Engineering for a pipeline preliminary engineering report.
The IFA studies, released last month, predict that supply will continue to outpace demand and urge stakeholders to consider more conservation measures. Neither study explicitly mentioned LEAP.
The state has pulled back — settling, for now, on a water main extension project in the Boone County area.
Citizens Energy Group is building out its water system so it can sell 25 million gallons daily to Lebanon Utilities. By last spring, the city had fully committed all of its water to current customers and those who'd reserved capacity — including the Lilly development — per the Boone County Reporter. Other home and business construction was put on hold.
Although Citizen's project will serve new Lebanon customers in addition to LEAP, the district has driven the maneuver. That's why the investigation's tally of expenditures includes this spending.
Citizens closed on its first loan — for about $105 million — in mid-December, according to spokeswoman Laura O'Brien. It's likely the first of several loans; the project is expected to cost $552 million, according to the utility's September application to the IFA-administered Drinking Water State Revolving Fund. While Citizens is drawing down from the state, it indicated on the application that the project wouldn't proceed without other funding sources.
The State Budget Committee also gave the IEDC permission to spend $50 million out of its Deal Closing Fund to finance the Citizens project's debt, handled by IFA. The money would cover the first five years of debt service coverage.
For Rep. DeLaney, the turmoil over water is proof that the state of Indiana goes 'all in, and we don't think things through.'
'We picked a place that, I think, met the goals of certain economic planners, but didn't meet the goals of the industries that were coming in there,' DeLaney said. Industries targeted for LEAP, like microchip manufacturing, need lots of water.
Proposals regulating big water transfers didn't progress during the last legislative session. But this year, the topic is a Senate Republican priority advancing with wide support.
Sen. Eric Koch, R-Bedford, said lawmakers have had more time to study up on the water problem — and solutions.
His Senate Bill 4 would establish a Department of Natural Resources permit for inter-basin water transfers and require Indiana Utility Regulatory Commission approval for long-haul pipeline starting in July. The bill defines such pipelines as carrying at least 10 million gallons of water daily at least 30 miles from the withdrawal source. The Citizens-Lebanon deal is excluded to avoid 'impair(ing) contracts,' per Koch.
Another measure, Senate Bill 28, would add to the state's groundwater regulations.
The bills passed the Senate unanimously and head to the House for consideration.
Lawmakers on both sides of the aisle said they would've liked the legislation to go further. And Braun has indicated he's not a fan of major water moves.
'I'm not going to be for moving water from one watershed to another, because that means you're robbing from an area. … You've got to treat it as a scarce resource,' Braun told constituents at a Lafayette town hall this month, Based in Lafayette reported.
Spending doesn't stop at water and land. Additional costs incurred by IEDC total $388.2 million.
The priciest deals included a $271.5 million grant to Lilly for Project Grasslands and a $94.4 million agreement with principal consultant Pure Development, according to an Arnolt Center review of the IEDC's transparency portal.
Lilly says Project Grasslands will expand the company's capacity to manufacture active pharmaceutical ingredients for tirzepatide injections, which are aimed at treating Type 2 diabetes and obesity.
The IEDC's contract with Pure Development requires the Indianapolis-based real estate developer to handle subcontracts for things like utilities, environmental assessments and roadways on undertakings including Project Grasslands.
But Pure Development is embroiled in a legal battle between co-owners Chris Seger and Drew Sanders. Seger sued Sanders in June 2024, asking a court to help liquidate the business' parent company after Sanders' 'poor temperament' and management style allegedly led to the departure of several key staff members. The initial complaint filed by Seger credits him with bringing in the LEAP project — the company's most important, according to the filing.
In a trial brief filed Jan. 31, counsel for Sanders called Seger's complaint 'laughable' and alleged Seger used a company expense account to fund his own personal expenses. It urged the court to deny Seger's request for dissolution given 'the chaos it would cause for nonparty Pure Development, Inc.'s current projects.'
IEDC's Sweitzer said the dispute is 'an internal company issue and has no impact on the continued development of the LEAP District.'
In interviews, Democrat lawmakers complained their efforts to understand the agency's spending have yielded little information — while Republican legislative leaders expressed confidence in IEDC's handling of the project.
'The main problem with (the IEDC) is we don't have a way for the Legislature to monitor it. I'm not saying supervise it — I don't want to run their business — but their obsession with secrecy, you know, everything's gotta be secret, because some manufacturer's plans might be leaked or something,' DeLaney said. 'It's gotten to the point where we don't know what they're doing.'
That's although DeLaney serves as an alternate on the State Budget Committee, and sits on the House's Ways and Means Committee.
Campbell, similarly, said it's been frustrating to figure out 'what it's costing the state.'
'When you've given this quasi-government-private-entity free rein, you know, there isn't much control a new administration would have over that unless we do start passing legislation that reins in the IEDC and forces more transparency,' Campbell added.
Even Braun has weighed in.
'It was spawned in no transparency,' he said at the Lafayette town hall, according to Based in Lafayette. 'It was done among folks, I think, with good intentions but who got so far ahead of their skis, they didn't know how we were going to get basic resources for it.'
Mishler acknowledged transparency concerns.
'It's sometimes difficult because, where we run into trouble is with the SEC rules. They get frustrated because you can't share that much, but, you know, the SEC rules say they can't share because of stock prices and stuff,' Mishler said. 'So, I think at some point the IEDC does share as much as they can … but we try to get as much information as we can before we make the decisions.'
Bray and Huston, meanwhile, have repeatedly noted the General Assembly provides oversight through the budget bill and State Budget Committee, with Huston also previously pointing to the IEDC's numerous publicly available reports.
Change could be on its way.
'Gov. Braun and (Commerce Secretary David) Adams have been clear that the IEDC will continue to evolve to focus on existing Indiana businesses — proactively working with them as partners to not only help them grow and thrive here, but also to help us determine what other organizations we're looking to attract to Indiana,' IEDC's Sweitzer wrote when asked about shifts under the new administration. 'We'll also work to further empower current and aspiring Main Street Hoosier entrepreneurs.'
Under Braun, communication has improved, multiple Republicans at varied levels of power said.
'I do want to praise Secretary Adams and the new administration — it's been a breath of fresh air,' said Sen. Spencer Deery, a Lafayette Republican who's been publicly critical of LEAP. 'Secretary Adams has come in and he understands the problems, and he has had a completely different approach, has been entirely transparent with me.'
'Because of that too, they also have asked for some time to fully understand both the problems of the past and the direction they need to go into the future,' Deery added. He said that's why his transparency-oriented proposal didn't get traction this session. Deery's caucus has also killed his previous attempts to further regulate IEDC and water.
The freshman senator credited state leaders for meeting with his area's officials and said he didn't want to 'come across as critical of leadership.' But, he acknowledged, 'I ran for office not to represent leadership or the caucus, but I ran to represent my community. And there was a compelling interest that my community needed me to be an advocate for.'
Deery said Indiana should restore public trust by 'codifying some of these guardrails, even beyond just a change of administration.'
Land-notification and other reporting requirements, authored by Sen. Brian Buchanan, are still alive and heading to the House. Buchanan, R-Lebanon, has said constituents could see'enhanced collaboration' under the new administration but isn't sure about his bill's future.
Bray, the Senate's leader, acknowledged calls for greater transparency but noted Adams has been 'very engaged' with his chamber. He said lawmakers would ensure the 'executive branch knows how we feel about things' — but asserted that economic development is largely under the governor's purview.
'That's where that responsibility is, and it's where that responsibility should be, in my opinion,' Bray said.
His House counterpart is bullish on IEDC's work.
Huston, R-Fishers, told reporters that, 'In 10 years, people are going to look around and see the incredible investments being made in the LEAP project — what's already been announced, what will be announced — and realize that that was a historic opportunity for Indiana.'
'Using predominantly one-time money, you know, we set ourselves up to make historic investments to generate long-term growth for the state — instead of creating a financial cliff like a lot of states,' Huston continued. 'I feel really good about it.'
This story was written by journalists at the Arnolt Center for Investigative Journalism at Indiana University and the Indiana Capital Chronicle. Max Reich, Marissa Meador, Mia Hilkowitz, Alaska Jones, Libby Erlenbaugh and Zoe Benson are students with the Arnolt Center.