Commercial Real Estate and Proposals and Development/Redevelopment and Architecture/Design and Real Estate & Retail

24-year-old developer tackles $30M deal

September 10, 2007

Jaron Garrett hasn't developed anything like the 25-story tower he's proposing for downtown. And he doesn't come close to having the financial muscle to pull off the $30 million project, at least on his own. Heck, at 24, he still has to show ID to get a margarita.

But Garrett is determined to sell his vision of transforming a downtown eyesore at Washington and Pennsylvania streets into a twisting glass-and-steel apartment tower. The Marquis Tower, if built, would be an instant Indianapolis landmark. Designed by locally based WDI Architecture Inc., it would feature about 120 apartments with monthly rents ranging from $800 to $2,500, along with three levels of retail and restaurant space.

Since late last year, Garrett--who grew up in Indianapolis but now lives in Chicago--has been working to assemble properties and design his ambitious plan. If he pulls it off, blight could disappear from one of the last strips in downtown's core that hasn't undergone a revival.

Garrett's company, JJ Marquis Investment Group LLC, already has agreed in principle to contracts that give him control of two vacant buildings he needs: 42 and 44 E. Washington St., which sit immediately west of the Panda Express restaurant. He also is negotiating contracts on buildings that house Panda Express and H&R Block.

Garrett said he plans to kick in $2 million to $3 million in equity for the project and already has sunk $100,000 into design, engineering and earnest money for his contracts.

That's not nearly enough to get the project off the ground, so he's hunting for a big-name partner. He's hoping to schedule appointments with Kite Realty Group, Kosene & Kosene Residential Inc., Flaherty & Collins Properties and others. And he's talking to nearby property owners about building parking separate from the tower.

Local brokers say the pitch won't be easy.

"My initial impression is, it's a pretty tough deal," said Brian Epstein, president of Urban Space Commercial Properties. "I think it's a great location if they can figure out the parking and all the other issues."

Garrett admits the odds are long. After a little pressing, he puts the chances of completion at 79 percent. But he's ready to sign over his stake in the project, as long as he can stay on as a "junior" developer.

"We have no interest or desire to be the majority owner," said Garrett, who graduated from Arsenal Tech High School in 2001 and received a bachelor of arts degree with concentrations in business and pastoral sciences from Indiana State University in 2005. "We just want to make the building happen."

"The only thing that could impede us is the financing," he added.

No small impediment. And it's not the only one. The plans so far don't include any parking. The site is small, only about 6,000 square feet if he gets all the buildings he wants. And Garrett's own architect says the estimated price is at least $20 million below what he will need.

"He can't do that design for $30 million," said Daryl Williams-Dotson, who owns WDI Architecture, which has worked on the IU schools of nursing and dentistry and Indianapolis International Airport.

She said Garrett wanted a design that would capture attention without signage--something "striking to look at day or night." She said the eventual building would look slightly different from the conceptual drawing because of engineering requirements.

At first, Williams-Dotson admitted, she was "a little timid" about Garrett's ability to pull off the project. But she's coming around.

"I've met with some of the other partners, who are older and impressive," she said. "He has positive backing."

In an interview with IBJ, Garrett would not name his partners. His company has no Web site, and its registered address is half of a duplex near East Washington Street and Sherman Drive (his mother-in-law's former house, he says). He said the company has ownership interests in several apartment buildings, including one at 3505 N. Pennsylvania St., but that could not be verified in property records.

Garrett's inspiration to work in real estate came from his stepfather, who owned several rental properties. Garrett took real estate classes in college and worked for a year at book publisher Houghton Mifflin in Chicago before he started doing real estate full time last year.

Garrett said he plans to live in Chicago for at least a few more years while his wife attends classes at Northwestern University. Meanwhile, he buys and flips homes while working on an MBA from Benedictine University in Lisle, Ill.

He said the run-down Washington Street block where he wants to build his tower is begging for redevelopment. He was drawn to the site, which is close to an office he maintains at 120 E. Market St., after walking by several times.

Previous deals for redevelopment of the block have fallen through over the years. In the late 1990s, the city raised the possibility of eminent domain to spark redevelopment along the strip, but later dropped the idea. A big hang-up has been the inability to gain control of all the properties along the strip from half a dozen owners.

"Maybe they didn't see what I see," he said of those who previously tried to redevelop the site. "Maybe it wasn't the right time."

He's not alone in believing the time now is right. A building immediately west of his site that recently burned now is under renovation. And the next building west soon will house an Argentinean restaurant.

Garrett vowed to file for permits from the city in the next three months. Meanwhile, he's working on letters of intent for a gym and other retailers. And he's hoping to get pre-lease agreements for the apartments, which should be easier to finance than condos.

The kid has vision, said George Crawford, a director of Indianapolis-based Meridian Real Estate who represents Garrett. He's talking about an observatory atop the tower, in the style of Chicago's Hancock Tower, and possibly a skywalk across Washington Street that would take cues from the Artsgarden.

Under the contracts Garrett struck with property owners, he is leasing the land and acquiring development rights. The pacts give him the option of eventually buying the land outright.

"He's created the vision, and he's starting the wheels turning," Crawford said. "I think it's a real progressive approach. I'm surprised it's taken so long for someone to pay this corner some attention."

It makes perfect sense to Garrett.

"It's a beautiful location," he said. "I see so much growth potential for Indianapolis; we really need to take it to the next level."

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