Retail construction has all but ground to a halt because of the recession, but that’s not the case in Carmel, where Keystone Construction Corp. is in the midst of developing a $45 million, mixed-use project that includes 46,000 square feet of retail space.
The ground-level retail is part of Keystone’s Arts District Lofts and Shoppes project in the Carmel Arts & Design District. The project, which covers an entire block on Main Street just east of the Monon Trail, will also include 450 parking spaces in two levels of underground parking and 202 apartments on the second through fifth floors.
The Carmel Redevelopment Commission chose Keystone last year to develop the project on a site the commission assembled over several years. Keystone began excavating the two-story underground garage last May after working with Carmel to clear the site of 10 buildings. Above-ground construction began in the last month and the framing for the top floors should begin after the first of the year, said Bruce Stauffer, senior project manager.
Keystone expects to start marketing the retail space and apartments next spring. The building is expected to open in the first quarter of 2011.
That timing could work in Keystone’s favor.
“The retail sector is very soft, and 2010 will be a lot of treading water,” but conditions should improve by 2011, said Bill French, a retail broker and senior vice president at Colliers Turley Martin Tucker.
Project owners who managed to get financing during the recession will be in a good position to lease their space when things pick up because of the scarcity of new space being built now, French said.
The timing isn’t the only thing working in the project’s favor. The population density in and around Carmel’s Arts & Design district is becoming respectable, French said. And with the traffic flow generated by Carmel’s nearby City Center project, which includes performance venues, and a relatively high level of disposable income in the area, the space should be attractive to prospective tenants.
Keystone hasn’t yet determined how much it will charge for the apartments or retail space.
It secured financing earlier this year for the project, which was designed by CSO Architects. A portion of the project is privately financed. Tax increment financing will pay for a portion of the parking garage, one floor of which will be open to the public.