Commercial Real Estate and Residential Real Estate and Proposals and Urban development and Development/Redevelopment and Real Estate & Retail

Center Township seeks redevelopment bids for former YMCA

October 28, 2009

The owner of the vacant former Fall Creek YMCA along West 10th Street in Indianapolis is seeking bidders interested in tearing down the building and redeveloping the prime 2-acre site.

Center Township bought the property in 2004, a year after the YMCA closed its branch. It most recently served as a fitness center called Healthplex operated by the Indiana Minority Health Coalition, but the facility closed earlier this year when revenue came up short.

The Center Township Trustee’s Office is looking for a developer interested in a long-term lease with an option to buy the property at 860 W. 10th St., according to a bid packet. The township wants a mixed-use development supporting the Indiana Avenue Cultural District and nearby IUPUI and hospital campuses. The deal would come with a restriction against freestanding fast-food restaurants.

The materials suggest a minimum annual rent of $210,250 for the first five years of a 15-year lease, with two 15-year options, and a minimum ultimate purchase price of $2.9 million. The tenant would pay all expenses.

Five potential buyers have picked up packets so far, said Phillip L. Bayt, a partner at local law firm Ice Miller LLP who represents the township. Bids will be accepted from Nov. 6 to Dec. 4. Township officials would then listen to presentations from two finalists.

Bids will be evaluated based on price, financial strength and experience of the bidder, and the proposed development’s impact on the neighborhood. Market observers say student or senior housing likely would be a component of any development plan.

The former YMCA is one of several land holdings amassed by former Center Township Trustee Carl Drummer. Critics have assailed the strategy as divergent from the office’s primary responsibility for poor relief.

It wasn’t clear whether the offering of the YMCA property represents a change in strategy by the current trustee, William Douglas, who did not return a phone message this morning.

The township also is working on a new use for another building it owns at 875 Massachusetts Ave., next to its headquarters. The Riley Area Development Corp. has signed a lease for the site and plans to replace the property with a $9 million residential and retail development.

As for the old YMCA, the trustee’s office paid $1.5 million in 2004 for the 50,500-square-foot building, which appraised at the time for $2.4 million. The trustee’s office spent about $175,000 on renovations and turned over operations to the Minority Health Coalition. The group operated a fee-based fitness center and paid some rent, but the township continued to shoulder most of the $100,000 in annual operating expenses.

The YMCA of Greater Indianapolis closed the Fall Creek branch in 2003, a move that led some to question the organization’s commitment to low-income neighborhoods. But the YMCA said its membership base simply had migrated elsewhere. It has promised to build a new branch in Pike Township.

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