City officials have granted a major tax deduction to a company that promises to provide high-speed internet infrastructure to most of Columbus.
Columbus City Council has approved a 20-year personal property tax abatement for Hoosier Networks LLC. The council also passed a resolution confirming the creation of a citywide Economic Revitalization Area to facilitate the request.
The abatement is part of efforts to create a fiber-to-home network throughout the city of Columbus. The Columbus Board of Works approved a 30-year master development agreement with Meridiam Infrastructure North America Corp. for the project in late June. City officials have said that the network will reach at least 85% of the city, and the company will contract with an internet service provider rather than being the provider itself.
Hoosier Networks LLC, which requested the tax abatement for the installation of new, qualifying equipment, is owned by Meridiam. Meridiam Senior Investment Director Nick Phillips said that the “fiber to the premise” network will support high-speed internet for both homes and businesses within the city. The project calls for the installation of new IT equipment, which in turn necessitates an investment of approximately $28 million. According to the company’s application, this investment will take place over “a several year period” starting this year.
Bartholomew County is also working with Meridiam and is contributing $4 million to its own project with the company. The sum comes from the county’s American Rescue Plan allotment. County Commissioner Tony London also expects the company to request a tax abatement from the county.
The tax deduction granted by the city of Columbus will be 95% on an annual basis. Per city documents, it has been estimated that this will allow Hoosier Networks to save almost $4.6 million in property taxes over 20 years, with the company paying a little over $240,000 in taxes during that same period.
However, Assistant Director of Community Development Robin Hilber has said that this initial calculation may not be accurate and also noted that the state has discussed eliminating personal property taxes. If this is done, it would make the abatement a moot point.
She also wrote in a memo to city council members that while the project will not necessarily provide additional employment, Hoosier Networks will hire a community outreach specialist to market high-speed internet to households throughout the city with a special emphasis on low-income families eligible for the Affordable Connectivity Program.
“This program will provide internet speed of up to 250mbps (megabits per second)/250mbps with a subsidy from the federal government covering the cost,” said Hilber. “Speeds up to 1gb (gigabits per second)/1gb can be purchased for an additional cost.”
In regards to an internet service provider, Phillips said at a previous meeting that Meridiam will initially have an exclusive contract with one ISP. The contract will be for five years with the option for two one-year extensions, making the maximum term seven years. Once the initial contract period is over, Meridiam will then be open to forming agreements with other providers.
During the time for public comment, Jarrett Moore, Comcast’s government affairs and relation regulatory liaison for Columbus and Bartholomew County, requested that the fiber-to-home network be available for use by all providers and not just one.
He referenced Comcast’s long-running service of the area and said that the company offers 1.2 gigabits of download speed in Columbus.
“Within the next few years, we’re looking to upgrade and increase our network here in the city of Columbus to 10G,” he said. “So again, we’re very proud of what we’re doing here in the city and what we have done.”
Moore added that Comcast’s “Internet Essentials” program provides discounted service to low-income individuals, allowing them to get their internet for free through the federal Affordable Connectivity Program. The company serves more than 1,600 homes in the city that qualify as “income-restrained,” he said.
Local resident Tom Heller also spoke during the time for comment, stating his opposition to the abatement. His concerns included whether the project with Meridiam would really bring anything new or needed to city residents, how the abatement might impact future property tax rates and a lack of new jobs created by the project.
“We’re not looking at a lot of high-paying jobs here,” said Heller. “I mean, there’s almost none. And yet their investment is equivalent to what NTN and Toyota and Enkei and whatnot have put down just on land and building, not their personal property. … Those folks employ thousands of people in our community, and that’s what abatements were really designed to do, not to be handed out, I guess, as candy to anybody who wants to stick their hand into the bag that has been given from high.”
He also voiced concern how increasingly virtual the world is becoming.
“Technology really will be changing our world,” he said, “and we’re on the diving board, ready to take a dive into something that might just usher us in that much more quickly into a future that maybe we ought to think about and take our time.”
In response to these comments, Matt Ehinger from Ice Miller LLP, which represents Meridiam, cited the company’s capital investment into the city and said that the project isn’t financially viable without the tax abatement.
Meridiam Digital Infrastructure Director Scott Layman added that the new infrastructure will give residents more options and provide “10-gig by 10-gig symmetrical service” that is not limited in terms of upload speed.
“It’s those types of speeds that we think are going to be beneficial to the low-income communities as well, as we really open up educational training, remote work opportunities,” he said. “While a parent can be going to remote work, a student can be doing their homework, perhaps another person can be watching Netflix and another one can be on a Zoom call. And that’s the world that we live in today.”
Additionally, he said that the company will bring in construction crews that would likely stay in local hotels and benefit the local economy.
Councilman Frank Miller also noted the need for more options in terms of internet service. He said that while he himself is an Xfinity customer through Comcast, it is the only choice available to him.
“There’s a lot of places, even in the city, not just the county, that have no option or maybe only have one option,” he said.
“We’re putting forth no cash for this, and we’re getting, hopefully, high-speed connectivity within the city that will be a draw, attract other companies and individuals to our city,” said Hilber. “… Now that more people are working from home, they can choose where to live. So the more amenities that we provide, the better chance we’ll have of attracting some of those.”
