Government and Real Estate & Retail

Canal could be home to new hotels or condos: Requirement for retail could jump-start slow effort

April 16, 2007

State and city officials have begun evaluating four groups that want to develop an acre of prime real estate along the Central Canal downtown.

The property, which covers about a third of the block stretching from Ohio Street to New York Street, will feature canal-level retail-a requirement of all potential developments there. It also could be home to a hotel or condominium complex, based on plans from two local developers.

Two other groups also are in the running for the project, but the state declined to disclose names.

Browning Investments Inc. has partnered with Dora Brothers Hospitality Corp. to propose a nine-story building housing two hotels. Designed by Browning Day Mullins Dierdorf Architects, it would include 166 rooms under a full-service, three- or fourstar hotel brand and another 89 extendedstay suites. Browning would not disclose the project cost.

The full-service hotel would be a highend "boutique-style concept," said James Browning, the company's vice president of development. The canal level would include a 3,500-square-foot restaurant with outdoor seating, meeting rooms and a fitness area.

"We wanted to drive more activity down to the canal level," said Browning's Executive Vice President Dennis Dye.

Downtown currently has three extendedstay hotels with a total of about 350 rooms, and Dora has begun construction on a 113-room Staybridge Suites a block south of Lucas Oil Stadium. It's scheduled to open in spring 2008.

"I think the extended-stay market is the only portion that's not overbuilt," said Tim Worthington, owner of the local hospitality consultancy, The Worthington Group.

Long a bastion for business travelers staying for more than a night or two, the extended-stay option also is gaining momentum with baby boomers making long visits and as transitional housing.

"The need is growing," said Julie Garrett, spokeswoman for Dora Brothers.

Locally based Flaherty & Collins Inc. is eyeing the same tract of land for residential development. The company, known for apartment and condo projects, is partnering with locally based Ratio Architects for the proposal.

Company officials are still weighing their options-apartments, apartments that could be converted to condos, or condos-but Vice President Jim Crossin said they're leaning toward condos, in part because the parcel's size might mean they can't put in enough apartments to make the project worthwhile.

Crossin said the group focused on submitting its qualifications, the first step in the state's process, and hasn't made the final decisions on the size or design of the project.

The site has strong retail potential, Crossin said, because it would include frontage not just along the canal but also on Ohio and New York streets-just a block north of the state government center, which has a huge daytime crowd.

"You've got the possibility of visibility on both those streets," he said.

Though a priority of the city, other retail development along the canal has been slow. In 2003, the city sold a dilapidated church building at the north end of the canal to a group of developers who are converting the historic structure into a 15,000-square-foot retail center. But the opening for Buggs Temple, first scheduled for fall 2005, has been pushed back. Backers now say it should open by the end of May.

Mass Ave favorite Hoaglin to Go is making progress, though, opening another eatery on the canal to replace the current operator at the Stardust Terrace Café in the Indiana History Center, home of the Indiana Historical Society.

Hoaglin to Go Café at the Stardust Terrace will be open for lunch Tuesday through Saturday and will offer a full menu plus grill-out options in the evenings when there's a concert at the lawn in White River State Park.

Flaherty & Collins also is including canaland street-level retail space in the $33 million apartment complex it's building on the east side of the canal between Michigan and North streets.

Crossin said the company doesn't expect any retail space to be available until at least the end of 2008, so it hasn't begun seeking tenants yet.

Though state officials said they hope to have a development plan in place for its parcel by the end of this year, the process is complicated. The state owns most of the land except a 7-foot strip abutting the canal that the city holds-what one developer called the "oceanfront property."

Indiana Public Finance Director Ryan Kitchell said the city and state have talked about the parcel's retail potential and will likely "circle back" now to see how to work together.

"It's a parcel that could be a great citystate collaboration," he said.
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