Mass Ave and Retail Development and Urban development and Development/Redevelopment and Real Estate & Retail

East end of Mass Ave poised for rebirth

May 7, 2007

Bustling foot traffic at lunchtime and at night helps sustain many of the restaurants, shops and galleries in the vibrant Mass Ave downtown neighborhood.

But few of the Massachusetts Avenue shoppers and diners on foot venture east of the psychological barrier that is College Avenue. Businesses beyond the divide are waiting for redevelopment to reach down the avenue—past vacant lots, empty buildings and industrial properties—toward an area known as East End.

There are encouraging signs more traffic could be coming:

A deal is in the works that could bring as many as 400 apartments and condos and 200,000 square feet of retail space to one of the big missing links, an 11-acre Indianapolis Public Schools operations center and bus maintenance facility that includes the historic former Coca-Cola Bottling Plant. In exchange for control of the land, the developers would build IPS a new facility in the 2800 block of Massachusetts Avenue.

A petition drive is circulating among Mass Ave businesses to gauge interest in an Economic Improvement District that would impose a special tax on area businesses to pay for marketing, facade improvement and possibly an extension of curb "bump-outs" and landscaping beyond College Avenue.

Construction has begun on the Cultural Trail, a bike and pedestrian path connecting the city's cultural districts. The $50 million project, which broke ground late last month, will help connect the East End with the Monon Trail and the rest of Mass Ave.

Of course, none of the changes will happen overnight. Development of the IPS property, in particular, could be several years away. And even if the developers can reach a deal with IPS, they would have to build the school district a new facility before they could start work on Mass Ave.

Already, the wait has been too long for some businesses. The Bike Line was hemorrhaging cash when it closed at the end of March. The local chain had opened a year earlier at 911 Massachusetts Ave., in a building visible from Interstate 65, the one with a bicycle on the side.

"Sometimes you have to take a chance because you're excited about the idea and want it to work," said Charlie Revard, Bike Line's owner. "It unfortunately wasn't in the cards."

The slow traffic also scared away Dean "Deano" Wilson, who sold his interest in Deano's Vino. Wilson will be an operating partner at the new BARcelona Tapas restaurant at Delaware and Ohio streets and also owns a restaurant in Fountain Square. Meanwhile, the wine shop's new owners are giving it a new name, Mass Ave Wine Shoppe, and a revamp.

"It's just not there yet," Wilson said of the East End. "The location's just a little bit barren."

Slow going

Massachusetts Avenue takes on an industrial look east of College, thanks in large part to the IPS facility and a vacant building across the street that is owned by the Center Township trustee. A dead end at the interstate doesn't help.

School district officials asked developers in late 2005 for proposals to replace its facility on another site in exchange for the land along Massachusetts. The IPS property, which includes the main site and a parking lot across College Avenue, appraised at the time for $9.25 million.

Locally based Browning Investments Inc. and Kite Realty Group each offered bids, but a group known as College Flats LLC has drawn the most attention from IPS. The team consists of the locally based not-for-profit Riley Area Development Corp. and California-based Panatonni Development Co.

If a deal is reached, Riley and Panatonni would join with other partners to construct a mixed-use project on the IPS land, while preserving the Art Deco Coca-Cola building, said Bill Gray, Riley's executive director. Riley doesn't yet have a price estimate for the project, but it would easily be its most ambitious to date.

Gray envisions 200 to 400 condos and apartments, some of them affordable housing. His group has worked on several mixed-use projects in Mass Ave, including The Davlan, where tenants include Elements, Starbucks and Subway.

An IPS committee is trying to work out an agreement and would like to present a proposal to the IPS board this summer, said Steve Young, the school district's facilities management chief.

IPS did not require the developers to share a plan for the land, but Young thinks it has a lot of possibilities.

"We've never felt that this particular site was being utilized in its highest and best use," he said.

Ditto for an office building across the street owned by the Center Township trustee. Trustee Carl Drummer did not return an IBJ phone message, but neighbors said he has discussed ideas for redevelopment including affordable housing.

The properties aren't the only changes that could help the East End if businesses can hold on long enough. A potential Economic Improvement District could help spruce up the area, by levying a surtax on property taxes based on square footage. It would raise about $225,000 annually.

But the tax would have to be approved by the City-County Council and it faces opposition from some business owners who aren't eager to increase their own taxes. A petition would have to be signed by at least half the property owners.

Creating a draw

For now, shops such as R Bistro, Mass Ave Wine Shoppe, The Best Chocolate in Town and Mass Ave Video are trying to create a draw of their own.

If there's an anchor in the area, it's R Bistro. Chef and owner Regina Mehallick has been serving lunch and dinner in the East End for six years. Her menu changes every week, but always features local ingredients.

Without foot traffic, Mehallick relies on word-of-mouth. And she tries to spread the love among her neighbors. She bought bikes from Bike Line. And her menu includes truffles from The Best Chocolate in Town—a name that sounds cocky until you try the dark-chocolate cheesecake.

Elizabeth Garber opened the chocolate shop in January. She also sells organic ice cream from Trader's Point Creamery.

Next door, the Mass Ave Wine Shoppe is trying to create an after-dinner destination complete with free Internet access and 50 wines under $15, said David Galvin, the store manager.

"It looks like an industrial area around here," he said. "We need to create more of a draw."

Retail success stories are more common closer to downtown, where developers now are demanding record rent rates around $30 a square foot in 3 Mass, a new luxury condo building. About 5,000 square feet of the building's 12,000 square feet of retail space likely will be taken by a casual restaurant, and the rest shouldn't be a challenge to fill, said Todd Maurer, president of locally based Halakar Real Estate.

Closer to the East End, 757 Massachusetts Ave. has not yet rented its retail space but several possible tenants, including a martini bar, have expressed interest.

The general rule is, the farther from downtown on Massachusetts, the tougher to survive for retailers, said Mark Perlstein, a principal with locally based Sitehawk Retail Real Estate.

"Certain restaurants like Yats [a block west of College] and R Bistro can succeed as destinations," Perlstein said. "Other mom-and-pops need the foot traffic."

Yet retailers on the East End can get much cheaper rents, around $12 to $15 a square foot, Gray said.

Bike Line was a little ahead of its time, said Molly Fenneman, who owns the building where the shop operated. She bought it last year and believes it to be one of her best investments.

"I think it's going to be a real booming area," she said.

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