This is the IBJ podcast for the week of April 18th, 2022, brought to you by Taft. I'm your host, Mason King. Welcome back to the podcast, everybody. There's been a big question mark on the map of Indianapolis since the GM Stamping Plant on the far west side of downtown closed in 2011. Located just south of the Indianapolis Zoo and White River State Park, the sprawling property has been seriously considered over the years for many projects including Indianapolis's Community Justice Campus, a concert amphitheater, Amazon's secondary corporate headquarters. None of these projects, of course, came to pass. In 2019, Indianapolis-based developer Ambrose Property Group was deep into planning and prep work for a $1.4 billion mixed-use development on the 103-acre site before abruptly announcing in September of that year that it had changed its mind. Now the question mark turned into an exclamation point in December 2020 when Elanco Animal Health announced that it would move its corporate headquarters from Greenfield to a portion of the Stamping Plant site. Now this was considered a huge win for the city and the state in that they were able to keep a major public company in the area and take advantage of a prime but somewhat problematic location downtown. And Elanco at the time was on its way via a $7.6 billion merger to becoming the second-largest animal health company in the world. That's the kind of corporate citizen that any government official would fight for. Elanco has committed to contributing $100 million to the cost of the project. The state has promised tens of millions of dollars in tax credits and training grants in addition to providing the land. The city committed to issuing $135 million in tax increment financing bonds to help cover site improvement, public infrastructure, and financing costs. Details about plans for the corporate campus itself were fairly sparse until Tuesday of last week. Elanco filled in some of the blanks, heralding a 220,000-square-foot six-story office structure and connected innovation and collaboration buildings that will occupy 40 acres of the Stamping Plant site. But Elanco CEO Jeff Simmons clearly does not want us to think about this project as simply a collection of buildings. He speaks about it in terms of connections between this project and the adjacent Valley neighborhood, between the neighborhood and the rest of downtown, and between Elanco and other animal health firms that together could create a powerful ecosystem of innovation for the industry. As he puts it, the headquarters could provide the foundation of a planned animal health epicenter in Indianapolis. It's an intriguing phrase but a little hard to get your head around. Jeff Simmons is our guest this week to discuss plans for the campus and what he foresees as its role downtown and in the animal health industry. Here's our conversation.
I'm pleased to welcome to the podcast Jeff Simmons, President and CEO of Elanco Animal Health. Thank you for making time today.
Great to be here, Mason. Thank you.
Now, first off, I want to get the lay of the land at the former GM Stamping Plant site. Now, the footprint for the full Elanco corporate headquarters campus will be how many acres?
Oh boy, I would say probably in the neighborhood of around 40 acres. There's more than that, and I would say that's what was so appealing as we looked across the country at different options. You do not find that many acres open and available in the downtown of a city like Indianapolis. So very unique, and yes, we'll be on about 40 acres.
Yeah, my recollection was that there might be as many as 85 to 100 acres available, but you're taking a portion of that.
We were going to concentrate, as you saw some of the design plans. We'll have White River Park built and expanded out front. That's one of the good drawing cards between the White River and our facility. And then we'll have Henry Street now come through the center of our property, and we'll be all on the north side of that.
Yep. So the main feature of the campus, what I'm going to see probably first when I'm zooming up I-70, is a six-story, 220,000-square-foot glass-faced office building. What will happen in that building? Who will be there? What are they going to do?
Yeah, and I'm going to say that probably will be an important part of the facility, no question. But I would say we've started with an open space area that connects that building with our research lab that will be in parallel north of it. So we've got a very open space area. And look, I start with this: there's not many people building buildings in the middle of this pandemic. We are building a destination. We are building, as one of the team members said to me, 'Hey, this is going to be a destination, not an obligation to our employees.' So we're looking at everything there, and we can jump in and have this discussion. But I will tell you, we've spent as much time in this open space area that is going to have everything from food amenities — it's going to be a little bit Starbucks-like, having food on a roof and being able to do things that create the community that drives a culture that ultimately ends in a competitive advantage and a magnet for talent. And in that building, that six-story building, Mason, yes, there will be not cubicles as much as open offices where the creativity happens around a table overlooking the city, open space to have an incubator, to have our partners in. We are opening our facility to innovators and partners and customers even that want to have access to animal health and the future of animal health. We can talk about that as well. So that's what you're going to see.
So you said running parallel to that is a lab space, is that right?
Yeah, so look, we are — our business model, just like Eli Lilly and the human pharmaceuticals, it's an innovation-centered strategy. We have a flywheel, as Jim Collins would say, that is working, and we've been talking about it since we went independent. It starts with innovation first and best-in-class products. We're launching about five to six a year, and that drives both in the pet side, the livestock side, that leads to a portfolio that is differentiated, that keeps expanding around problem areas for different species of animals. That then leads to more productivity. Innovation, portfolio, productivity, repeat, continue and grow and expand. So that lab combined with three or four others around the world is going to allow us to do everything from basic research to actually helping coordinate and drive clinical studies that we're doing, all the way through. But it'll be mostly the R side of the R&D.
What is the timeline then for, let's say, those two buildings? About in the 2024 stage?
Um, it'll be two to three years is probably the best way to look at it. Just like any new house project, any project, we're going to have our ebbs and flows and our challenges. But we're off and started. That's what Tuesday marked was groundbreaking. Concrete's going to start to be torn up and we're going to start constructing those buildings as soon as possible.
When would you expect the big lift, the big move from Greenfield to plant yourself down on that campus?
It's hard to predict exactly, but you know, we're going to get it right and we're going to keep running our company. We're in a great facility here and we've got people coming back into our facilities and we're getting into the post-COVID new ways of working here in Greenfield. And so we'll transition when it's right. And again, we're being told a two- to three-year time period.
Now, in addition to the buildings that we have already discussed, what else will be part of that 40-acre campus?
Yeah, so look, I think first of all we're going to focus a lot on that open area of those three buildings. But let me add a few other things. So we're actually using the stamping line — if you go by that facility now, you see the stamping line of the GM facility. We're going to use the first third of that out near the White River and create a glass structure that's going to be used for a multi-use larger function site to hold scientific forums, to hold different key meetings. So that'll be tied into the White River Park. And look, this is all about the destination. We want a place where you can relook at fitness and pets and food and your total well-being on this site. So we're welcoming White River Parkway, this multi-use facility capturing a little history from the GM stamping. Then you'll have our facility that will be on there. We are going to work very hard, as we said, we're removing concrete, we're not removing trees. We're planting trees. We handed out these saplings to highlight the importance of taking the land back to a little bit of the way it was, being part of the West Side Valley neighborhood, and as we said, connecting the Valley with the Circle. And that's all important. So what you're going to see in this facility is a very open courtyard. We're going to have a lot of working space outside, and we're going to have something that's going to blend into the neighborhood across those acres in our site.
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All right, we're back with this week's edition of the IBJ podcast and our conversation with Jeff Simmons about plans for Elanco Animal Health's global corporate campus in downtown Indianapolis. How many Elanco employees would be based there?
Yeah, you know, in the neighborhood of around a thousand. And as you can imagine, there'll be a combination of permanent working there all the time to some that'll be flexible, calling Destination Indianapolis their office. That'll be around a thousand.
At the groundbreaking for the global headquarters this week, you said the project is aimed to serve as the foundation of a planned animal health epicenter in Indianapolis. I was really curious about that phraseology. What does that mean, epicenter?
Yeah, let me back up. I think the most important headline I would want people to hear is Tuesday was the groundbreaking. I wanted to emphasize one point — the most important point, I should have opened with this — it's not about a building, it's about building. It's about the verb. We're building four things. We're building the next era of Elanco innovation, growth, talent. We're building this post-COVID office, a destination place where we're going to have a whole different way of working and create a whole different kind of well-being where people not only want to come but they create community, culture, and competitive advantage, and it's a magnet for talent. The third is we want to build the West Side. We want the Valley to connect to the Circle. We want to expand and push downtown west. What I've learned in spending time with the community leaders and understanding the West Side is this is a really unique — the Valley of the West Side is very unique. And I think we have a real opportunity here to take the amazing neighborhoods and culture that's on the West Side and integrate into that and enhance and be part of it — not change it, but be part of it. And then the last I would say is the epicenter. We're building an epicenter. So to answer your question again, first it's not about a building, it's what we're building. But one of the elements of this is there's a corridor for animal health in Kansas City. There's biotech in Boston for human pharma. What we've seen that our industry needs, Mason, is animal health is not as mature in the way we fund and source and partner innovation. So what the epicenter can do is give access to the world's animals really through Elanco and others. If you're a small inventor and you're wanting to get to the European pet market, we're going to be able to enable some of that by coming here. The other side of it is access to innovation, and innovation takes capital, it takes incubators, it takes partners. And we have some examples of how we've partnered with Scott Dorsey and High Alpha to actually create this. So our goal is we're going to actually open a part of the facility to where it will be a maker space, it will be an incubator, and we'll be able to have people come in and be able to even interact socially with us and be in there saying, 'Hey, I am here to land the next animal-centered innovation.' And whether it's Elanco or High Alpha or just capital funding or state support, we're going to create companies. This vision was less than six months old and we've already brought two companies to play. Elanco's played in both of them. One, High Alpha and Elanco got together and formed Aeternum. Aeternum is a company out of the High Alpha model. We had a need our customers have, which is, 'Hey, we believe we can cool the climate and farmers can make money.' So what Aeternum does is certifies the carbon reduction on farms and can help monetize it. That's going to be a big value. That's a company we've spun out really with that idea. And then the other one is BioMed, which is all around us spinning out our microbiome research. And Aaron Schott, who used to lead our R&D, has actually set up and formed a company and it's going to be sourced by outside capital and it's going to be set up here in Indianapolis. Those are examples of what the epicenter can deliver.
