IKEA brings revenue, jobs to central Indiana

By Adrianna Pitrelli
TheStatehouseFile.com

FISHERS, Ind. — From comfy couches to colorful clocks, the country’s newest IKEA store offers thousands of items as well as a boost to central Indiana’s economy, bringing more jobs to the area and providing solar energy.

“An average store generates $90 million revenue,” Richard Feinberg, professor of consumer science at Purdue, said. “At 7 percent sales tax, that’s $6.3 million in additional tax revenue.”

The 289,000-square-foot store that sits at I-69 and East 116th Street in Fishers, which opens Wednesday, cost more than $40 million build, but received some help from the city. It also contributes to job growth as 250-full time employees will staff the store, which carries more than 10,000 items and has a 325-seat restaurant.

People camp out at the Fishers IKEA Monday. The first 45 people who camped out will win a free couch. Photo by Adrianna Pitrelli, TheStatehouseFile.com

In 2015, the Fishers City Council agreed to cover the cost of new roads, sewer impact fees and development around the Swedish furniture store. The total savings for IKEA was more than $1.6 million, because of the assistance given for the new roads leading to the store and zoning fees.

“IKEA is thrilled and honored by the support from Fishers officials and staff in favor of building a store in their entrepreneurial and vibrant city,” said Lars Petersson, IKEA president. “Opening IKEA Fishers will bring the unique IKEA shopping experience closer to Indiana shoppers who have not been to an IKEA or are not able to visit us frequently.”

Officials in West Chester, Ohio, 20 miles outside of Cincinnati, also supported IKEA by sharing costs for local road improvements. But officials in St. Louis provided $32 million in tax incentives, Kansas City, $20 million, and Denver, $18 million.

“IKEA’s improvements to its site and construction of its store increased the value of the property where the business sits and therefore generates more property taxes for the community than would have been the case if the land remained vacant,” said Barb Wilson, West Chester, Ohio spokesperson.

IKEA also benefited from planned upgrades to area highways. The $22 million interchange on 106th street and the $6 million project for a new eastbound lane on 116th Street from I-69 to Cumberland Road was finished before the grand opening. A new traffic signal was also installed at 116th Street and Exit Five Parkway, and Oak Drive was widened.

Fishers’ officials promised if the projects hadn’t been done before fall 2017, the store would have received a property tax abatement on top of the $1.6 million in assistance.

Nearly 128,000 cars drive in both directions on 1-69 near 116th a day. By 2035, it is said that the number will increase by more than 30,000, according to Fishers Director of Engineering Jeff Hill.

Dozens of people anxiously waited outside the IKEA more than 48 hours before its grand opening in hopes of winning a free item. The shoppers stayed in tents for more than two days while they waited for the grand opening. Photo by Adrianna Pitrelli, TheStatehouseFile.com

Hill said the new interchange is already reducing congestion on the exit ramp at 116th Street.

Mayor Scott Fadness and the city encouraged business and residential buildings to develop in the area so more people would work and live downtown. Tech firms, high-rent apartments, restaurants and shops went into the area to draw the crowd.

Since June 2013, Fishers’ unemployment has decreased steadily. As of April 2017, the rate was at 2 percent. Fishers has attracted hundreds of jobs in the past few years.

Money Magazine has projected a job growth in the city of nearly 90,000 of 11.6 percent in the next several years.

“Last year we put $30 million of road infrastructure into the city, particularly around places like IKEA and Top Golf,” Fadness said. “We’re having another probably $200 million, if you include State Route 37, over the next five years that will happen in our city.”

When searching for a location to place a new IKEA, the company wanted a place that isn’t too close to other IKEA stores, is easily accessible and offers at least 25 acres of land, Joseph Roth, IKEA spokesperson said.

Yet, despite the IKEA’s expected positive economic impact on Fishers, some residents remain concerned that the character of their community is changing and will be congested with too much traffic.

“I know we had all these new road project but that doesn’t make me believe that the area isn’t going to be cluttered,” said Anne Mills, who has lived in the Fishers area for 12 years. “I don’t know how I feel about all these big businesses coming to take over our city.”

Others, however, are excited.

The 45th IKEA store opens in Fishers Wednesday. It will sell more than 10,000 furniture and home goods items. Photo by Adrianna Pitrelli, TheStatehouseFile.com

“I can’t wait for the store to open because now I won’t have to travel to Ohio,” said Fishers resident Lindsey Whitney, who travels to other IKEAs a handful of times a year. “Plus, yes, it will help the economy because it’ll bring more people to Indy, I think.”

With tents, lawn chair and games, dozens of people camped outside the IKEA 48 hours before its grand opening in hopes of winning a free couch or chair.

“I’m not even a person who goes out for Black Friday, but I’m a big fan of IKEA’s products so I’m out here waiting,” Lisa Ingersoll, of Indianapolis said. “The items are fun and creative and I’m really excited.”

Fadness said he sees both sides.

“I went through the same emotions [the residents] did,” he said. “It’s a transformative project but it could transform the city in many ways and we have to explore and be sure it fits the ultimate version of our community.”

Like Mills, hundreds, if not thousands, of people travel to IKEA stores from elsewhere. Wilson said that’s the case for the store near Cincinnati.

“The license plates found in the parking lot demonstrates that IKEA draws shoppers from a wide area and these shoppers may stay in West Chester’s hotels, dine in West Chester’s restaurants, visit other shops, purchase gas and more,” Wilson said.

The Fishers store will have more than 1,000 parking spots. Roth said the parking lot is so large because people typically stay at the store for up to three hours.

Feinberg agreed IKEA is a tourist destination, and with travel comes spending money at other businesses.

“People go to have an entertaining afternoon,” he said. “The arrival of this store is a signal that Indianapolis is in the top ranks of retailing and should be a significant sign to other national retailers who have yet to consider Indianapolis worthy of their stores.”

The store isn’t just said to help the economy, it’ll also help job growth.

Employees who work 20 hours or more a week are eligible for full medical and dental benefits. They also get four months of paid parent leave and shopping discounts. Jobs vary from home furnishing sales to cashiers.

“We believe it is as fun to work at IKEA as it is to shop at IKEA,” said Holly Davidson, Fishers IKEA store manager. “I am excited about growing IKEA culture among new coworkers from the Indianapolis area.”

Additionally, Feinberg said, the 74-year-old company typically adds an average of 1.75 new jobs to new or existing businesses near its location.

Aside from boosting the economy and adding jobs, the 45th IKEA store will also generate solar energy, allowing for less grid-based energy to be used.

Last month, IKEA placed nearly 4,000 solar panels across 219,000 square feet of its roof.

Davidson said the solar panels span across the biggest square footage in the country for retail stores.

“IKEA strives to create a substantial life for communities where we operate, and IKEA Fishers is adding to this goal,” Davidson said.

IKEA being part of the Fishers community is something Whitney is looking forward to.

“I’m so glad IKEA chose Fishers because I think our city has a lot to offer to people who come to visit the store,” she said. “And I think it’ll just be a fun place where people who live around here can also visit and see more of Fishers.”

Adrianna Pitrelli is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.

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