Indianapolis Auditors Descend Upon United

Remember the United Airlines Hub project that hundreds of cities wanted back in 1991? As you know, Indianapolis got the project for a price of $295 million. Now, Indianapolis is sending their auditors in to determine if $34 million in tools and equipment purchased by the company was done so with the incentive money. If so, they want to ensure that the tools remain the property of the airport authority.

This situation is a vivid reminder that public investment in private business is a risky undertaking. State and local governments using public incentives should protect themselves against failed deals like the United project. A host of performance-based tools, including clawbacks, are available to offer some protection. I wrote in a couple earlier articles about the need for greater attention to "risk management" by EDO's. This is essential in the economic development incentives area.

You can read the article about the Indianapolis United Hub project by clicking here.