Noblesville killed $5.5M development deal because of adult baby shop, emails show

The owner of a woodworking supply company said the city of Noblesville reneged on a $5.5 million development deal because he wouldn’t shut down a baby shop for adults he also owns.

Ryan Polokoff, owner of WoodTurningz, reached a preliminary agreement last October for property tax abatements if he built a new headquarters at 15405 Endeavor Drive. The incentive was part of a package deal with Texon Towel and Supply, Co., which would build an identical $5.5 million building next door.

When the city discovered he owned My Inner Baby, a store that sells adult diapers and other adult-sized baby clothes, it moved to nix the WoodTurningz deal because it “doesn’t meet the morals of the city,“ Polokoff siad. 

The city is now trying to shut the baby store down or force it to move to an adult entertainment zoning district, claiming it is a “sex shop.” Polokoff is challenging that designation and a hearing is scheduled before the Zoning Board of Appeals on Monday. (Read the outcome of that hearing here).

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The city denies that it pulled out of the WoodTurningz deal because Polokoff wouldn’t close the baby shop, despite emails from the city indicating that was the reason. Officials said Polokoff wasn’t willing to pay salaries the city demanded, but offered no evidence to support that claim. Emails show Polokoff agreed to pay higher salaries.

Owner offers several concessions, but it wasn't enough

Polokoff said WoodTurningz, which sells wood turning supplies, pen kits, and shop accessories, has been in Noblesville for 20 years at 15248 Stony Creek Way, but he needs to expand.  He purchased the land on Endeavor Drive for $446,500 and estimated construction of the 52,000-square-foot building would cost $5.5 million more.

WoodTurningz guaranteed the city it would hire 10 employees over the next 10 years and the city offered a tax abatement that would save it about $1 million in property taxes over eight years. Polokoff said he could not afford to go forward with the project without the tax abatement.

Polokoff said city officials first tried to get out of the WoodTurningz deal by demanding Polokoff match the annual pay of Texon’s expected new workers — $58,300. Polokoff said he did so within five minutes at a Nov. 19 meeting he and developer Jim Kent had with Noblesville Economic Development Director Andrew Murray.

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The city then demanded Polokoff promise not to move My Inner Baby into the new WoodTurningz building, which he was reluctant to do because he thought he might store some baby supplies there. "Why should I not be able to use space that I own?" he said. But about three days later Polokoff agreed to that, too.

After realizing the roadblock My Inner Baby presented, Polokoff, who co-owns the store with his fiancée, Sabine Kissee, told officials he would be willing to divest ownership. But he said the city restricted the people to whom the business could be transferred; it included wife, girlfriend or fiancée, he said.

Finally, Polokoff said, the city demanded he close My Inner Baby or move it out of Noblesville to keep the development deal. He refused and the deal was scuttled, he claimed.

Noblesville was once 'excited' about WoodTurningz

When the preliminary deal was announced in October 2021, Mayor Chris Jensen touted it as an example of the city forming partnerships with homegrown businesses.

“We are excited to see two of Noblesville’s own expand with this new investment and jobs commitment within our community,” Jensen said in a news release. “As new investment continues to occur in Noblesville, working closely with companies that are already here is critical to ensure they have the best opportunity to thrive.”

When IndyStar asked Deputy Mayor Matt Light if the deal was terminated because of Polokoff’s ownership of My Inner Baby, city spokesman Emily Gaylord replied in a text that it was because of other reasons.

“That tentative economic development was not moved forward based on feedback from council committee and further review of fiscal components, including the average wages involved,” she said.

Emails conflict with city's statements on why deal fell apart

In an email dated Dec. 28, Assistant Director of Economic Development Chuck Haberman told Kent the baby shop killed the deal and acknowledged Polokoff had met the other demands.

“The city has decided not to incentivize the business,” Haberman wrote. “While they appreciate the increase in wages and jobs and divesting ownership, they are still not comfortable given the connect to MIB (My Inner Baby).”

Kent, who is principal at Design & Construction, Westfield, told IndyStar the conversations became heated at times when new "hurdles" were put up, but Polokoff agreed to the concessions.

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"Every time he agreed to something, they came back with something else and it just became nastier and nastier," Kent said, "And it always came back to the baby shop."

When presented with the contents of the email by IndyStar, the city insisted wages and other issues were why the tax abatement was pulled.

“It didn’t meet the normal threshold of average wages,” Gaylord said. She said she was “not aware” the city had demanded that Polokoff not move the baby shop into WoodTurningz or move the store.

In another email, dated Nov. 24, Kent said Polokoff was bewildered by why the baby shop was such an impediment.

“Knowing that we were able to work through the major issue of proposed wages in five minutes, the situation of his ownership of My Inner Baby, which we were told was the minor issue, seems to have escalated to the major issue,” Kent wrote to Murray. “Never did he figure My Inner Baby would cause such a disruption with his non-related business Woodturningz.”

Kent said Polokoff had made "significant investment" in the project besides the land costs, including new employees, machinery, ordering of steel, bank appraisal fees and building design costs.

“Now having agreed to meet and satisfy all the concerns … he is asking for his tax abatement offer to proceed,” wrote Kent.

Polokoff has owned My Inner Baby for a year in an area zoned for light industry next to State Road 37 near 154th Street. It is a self-described medical supply outlet that sells adult diapers and incontinence supplies, but also adult-sized baby bottles, pacifiers, stuffed animals, coloring books, pajamas and onesies.

In April, on the same day that Polokoff told his landlord that he wanted to renew his lease, he and the landlord received notice from the city that My Inner Baby was now considered a sex shop and couldn’t stay in the building. The landlord then told Polokoff he wanted him out.

Kent said Polokoff is considering moving WoodTurningz out of Noblesville and he is scouting other possible locations.