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WEST LAFAYETTE SETS SK HYNIX LOCAL REVENUE SPLIT, DESPITE SKEPTICISM
An agreement that sets out how local tax revenues from SK hynix’s $4 billion semiconductor facility will be shared over the next 30 years was approved Monday by the West Lafayette City Council, despite pushback over how the bulk of the money will be controlled by the Indiana Economic Development Corp., the state’s quasi-public driver of development.
SK hynix’s property north Kalberer Road will be part of one of Indiana’s first Innovation Development Districts, a mechanism built to channel state incentives that were used to land the South Korean chip maker.
The IEDC and SK hynix signed an Innovation Development District fund grant agreement in June 2024. According to the document, available on the IEDC’s transparency portal, the agreement runs from Dec. 12, 2023, to Dec. 31, 2055. It offers a maximum grant amount of more than $712 million.
According to a 2022 state law that created the Innovation Development District concept, local governments are guaranteed a minimum 12% return, with the rest managed by the IEDC. West Lafayette negotiated that to 20% in a deal announced this summer.
West Lafayette Mayor Erin Easter has said that the local share of annual property tax payments, along with a one-time $45 million distribution for infrastructure projects and portions of SK hynix’s performance-based incentives, will work out to be about $500 million over the next 30 years.
The agreement that passed the city council Monday, on an 8-1 vote, would send roughly 52% of the local share to the Tippecanoe School Corp., with the rest split evenly between West Lafayette and Tippecanoe County. (The property is in the TSC boundaries, just north of the West Lafayette Community School Corp.)
David Sanders, a city council member, voted against the plan, saying he backed repealing legislation that initiated the Innovation Development District concept for some of the largest projects in the state.
Sanders said he appreciated that Easter and the city’s team negotiated for a deal that provided more than the minimum 12% a – “they have done for the city … even better than could be expected.”
But he argued that persistent questions about the IEDC leadership, past and present, gave the agency too much control without adequate oversight from the General Assembly’s budget committee or from the administration. Several residents who spoke against the plan Monday agreed, calling the IEDC lacking in internal controls and too “nebulous” to trust.
“Once we allow for an IDD here in West Lafayette, we are contributing to the increase in not having accountability and not having transparency,” Sanders said. “I am absolutely opposed to this.”
WASTEWATER TREATMENT PLANT EXPANSION’S COST AND SK HYNIX’S ROLE
The West Lafayette City Council on Monday also gave initial approval to issuing up to $95 million in bonds for a wastewater treatment plant expansion that would push capacity from 10.5 million gallons a day to 15 million gallons a day.
But on Monday night, the council received word that the project likely would be around $85 million, according to bids reported by Jim Treat, a city consultant with Krohn & Associates.
The project, expected to be done in April 2029, is not slated to increase sewer rates to cover the bond issue. David Henderson, the city’s utility director, told the council the need to increase capacity was driven by recent growth in the city, including anticipation of the $4 billion SK hynix semiconductor facility, hospitals under construction by IU Health and Parkview Health, recent additions of housing in the city and projects on Purdue’s campus. Henderson said the expansion, the first since 1994, was aimed to cover city needs for the next 20 years.
The reason customer rate increases are not being targeted, the council heard, was in part because part of a one-time $45 million infrastructure distribution to the city connected with the SK hynix project would go toward backing the bonds. City officials said that figure will be around $22 million.
The next day, at Tuesday’s weekly board of works meeting, the city signed off on an agreement for wastewater services for SK hynix’s high-bandwidth memory facility expected to open in late 2027 north of Kalberer Road, between Yeager Road and County Road 50 West.
