Angie's List canceling Eastside expansion over RFRA

The continuing blowback over Indiana's new "religious freedom" law hit home Saturday, with Indianapolis-based Angie's List announcing it is canceling a $40 million headquarters expansion.

The decision is a direct result of passage of the Religious Freedom Restoration Act, co-founder and chief executive officer Bill Oesterle said Saturday.

The proposed expansion of the online consumer ratings service was touted to add 1,000 good-paying jobs over five years and help revitalize a struggling Eastside neighborhood.

"Angie's List is open to all and discriminates against none," Oesterle said, "and we are hugely disappointed in what this bill represents."

The Angie's List news came as thousands of opponents of the law rallied outside the Statehouse, and Democrat leaders on the City-County Council announced plans to push a resolution "that rejects the RFRA and lets the world know what a wonderful, welcoming city Indy truly is."

Outside Indianapolis, the law approved last week by the state's Republican-controlled legislature and Gov. Mike Pence continued to generate widespread negative attention. The latest criticism included a joint statement Saturday from the NBA, WNBA and the Indiana Pacers and Indiana Fever.

"The game of basketball is grounded in long established principles of inclusion and mutual respect. We will continue to ensure that all fans, players and employees feel welcome at all NBA and WNBA events in Indiana and elsewhere," the statement said.

Pacers and Fever owner Herb Simon added: "The Indiana Pacers, Indiana Fever and Bankers Life Fieldhouse have the strongest possible commitment to inclusion and non-discrimination on any basis. Everyone is always welcome at Bankers Life Fieldhouse. That has always been the policy from the very beginning of the Simon family's involvement and it always will be. "

Despite the groundswell of criticism, the Angie's List decision is the first tangible hit.

"This could be a sign of other things to come," warned Zach Adamson, the Democrat councilman who represents the neighborhood where the $40 million expansion was planned.

"It has only been two days since the bill was signed and we're already hearing of other things. This is not good."

The overwhelming public opposition has even caused the governor to take a step back. Pence told The Star late Saturday that he is willing to consider clarifications that make it clear the law is not about discriminating against gays and lesbians, as many critics believe. But the governor said no specific language has been finalized.

Oesterle's announcement is evidence that opposition to the controversial law — or the opinion that it sends the wrong message to the LGBTQ community — is not driven only by liberals or outside agitators.

A Republican who managed former Indiana Gov. Mitch Daniels' first election campaign in 2004, Oesterle supported Pence in the race for governor. And Saturday, he continued to express respect for the governor.

"Look, I'm very proud to be a Republican," he said. "I'm concerned about the direction that the legislature and governor have chosen to go here. ... I'm concerned that very valid input around this type of legislation is not being heard in the Statehouse."

The bottom line to Angie's List, Oesterle said, is that the new law hurts the company's ability to recruit and retain top-flight talent. The project, which required assistance from the state and city, contained hiring benchmarks.

"We believe that what that bill does to our efforts to recruit good talent into Indiana is significant," he explained. "We're unwilling to engage in an economic development agreement that is contingent on us hiring people in when the state is sending a message out to potential employees that is not always palatable."

Oesterle said one of Angie's top executives and his partner, who are gay, are questioning their decision to move to Indiana to work for Angie's List.

"The demographic of our company is younger and to the extent ... people become fed up with (the passage of RFRA) and look for other opportunities and places that don't have this tone, that is an issue for us. The connection is not being made at the Statehouse that these acts hinder our ability" to do business, he said.

Oesterle said Angie's List, a publicly traded firm that he co-founded, will re-evaluate its plan to expand. And, at least for now, the company has no plans to pull out of Indianapolis.

He said he was soured by the way the governor handled the bill signing, excluding the press and public — then issuing a photograph of him surrounded by the bill's supporters.

"That photograph told me everything I needed to know," Oesterle said. "I've been on the other side of this issue with them for a long time, going back to the governor's (Daniels') campaign. That's when I first became exposed to those people. The most prominent three figures standing directly behind the governor were those three individuals."

Oesterle said he was referring to Micah Clark of the American Family Association of Indiana, Eric Miller of Advance America and Curt Smith of the Indiana Family Institute. The three groups have been strong and vocal backers of efforts to enshrine a same-sex marriage ban in the state constitution and other laws limiting the rights of gays.

"The state needs leadership on this issue," Oesterle said. "I like Gov. Pence, but he's got a blind spot on this (RFRA)."

Under the initial proposal, the company would have converted a 101-year-old Ford assembly plant being used as a warehouse by Indianapolis Public Schools and turned it into offices. It also would have constructed a 1,000-space garage nearby. That would have required an $18.5 million tax increment financing package deal being negotiated with city officials.

However, the reaction to the proposed expansion and funding plan had cooled somewhat, as residents and City-County Council members raised concerns about the company's profitability and ability to meet the job promises. The proposal was eventually passed in committee after some vetting and was due for vote before the full council on Monday. Council members John Barth and Adamson, both Democrats, said Saturday that there were enough votes to pass the incentive package.

Oesterle also said Saturday that he had expected to break ground very soon, before making the decision to nix the deal.

Adam Collins, the city's deputy mayor for economic development, said in a statement that the Angie's List announcement "is the type of reaction to RFRA that continues to create real concern in our administration." Mayor Ballard earlier spoke out against the law.

"Indianapolis thrives when we embrace the contributions of our diverse business community and residents," Collins said. "We are committed to ensuring that all who live and work in this city continue to feel welcome here."

In a statement Saturday, Democratic mayoral candidate Joe Hogsett said RFRA "was already hurting Indy's neighborhoods."

"I'm disappointed to hear of the potential loss of the Angie's List expansion," Hogsett said. "It meant more than just jobs to Near Eastside neighborhoods. When key corporate and community partners like Angie's List speak, we should listen."

Chuck Brewer, the Republican candidate for mayor, called Angie's List "an important part of the future of the Eastside" and said he hopes the project can be revived.

"While the legal impact of RFRA remains unclear, it is abundantly clear that Indiana, and therefore Indianapolis, now face a major perception problem," Brewer said in a statement.

"Mayor Greg Ballard has done a great job to make Indianapolis a thriving, welcoming city and we need to take seriously anything that threatens our reputation and our ability to attract talent, businesses, conventions, and investments. As a business owner Downtown, I am keenly aware of the negative impact that can result from the perception of this legislation. I believe the Indiana legislature should consider taking additional action to provide assurances against discrimination."

City-County Council president Maggie Lewis said she expects the council to take up a resolution at it meeting Monday "that rejects the RFRA."

"Indianapolis welcomes people of any sexual orientation, race, gender identification, ethnicity, religion, or creed," Lewis said in a statement. "RFRA does not reflect the diversity we celebrate in our great city."

Star reporters Jeff Swiatek, Matt Tully and Brian Eason contributed to this story.

Call Tim Evans at (317) 444-6204. Follow him on Twitter: @starwatchtim.