Apartments and Residential Real Estate and Urban development and Development/Redevelopment and Real Estate & Retail

Developers vie for property by Central Library

June 9, 2008

Two high-profile property developers are squaring off for the rights to transform a six-story apartment complex adjacent to the Central Library downtown.

Van Rooy Properties and Buckingham Cos. both submitted proposals to redevelop the Ambassador apartments at 39 E. Ninth St., just north of the library.

The Indianapolis-Marion County Public Library purchased the property in 2001 and used it to house construction offices during its recent downtown expansion. The 60,000-square-foot building is now vacant, and the library wants to change that.

"The Ambassador sitting empty is not the way you want a building," said Ed Olsen, the library's director of facilities management. "I would like to see it be a place that draws people and becomes part of that community."

Library officials requested proposals for both the Ambassador and property it owns at 815 and 817 N. Pennsylvania St., now home to a single-story building and two parking lots.

Van Rooy and Buckingham both proposed a mixed-use project on the Ambassador site, with street-level retail and commercial space and 60 one-bedroom apartment units on the upper floors.

Van Rooy, for its part, proposes to purchase the building for $1 million and spend another $3.7 million to update the interiors and add features such as a business center, fitness room and a movie theater for residents.

In Buckingham's proposal, the company offers to buy the Ambassador for $865,000 and spend an undisclosed amount to spruce it up to create "high-quality, market-rate" apartments that would rent from $800 to $1,000 per month.

"Our plan is to basically renovate the entire building back to its former glory," said Clinton Winkler, a Buckingham development associate.

Built in 1924, the Ambassador is on the edge of the historic St. Joseph neighborhood. It has been listed on the National Register of Historic Places since 1983.

Both companies say they have significant experience to tackle the project.

Van Rooy, a property management company that focuses on multifamily developments, said in its bid that it has redeveloped more downtown housing than any other firm in the market. It also said its $3 million rehab of the historic Blacherne apartment complex at 402 N. Meridian St., just a few blocks from the library, relates directly to the Ambassador project.

Similarly, Buckingham pointed to numerous developments in the area as proof of its qualifications. The company recently announced plans to spend $45 million to build a "north village" in the neighborhood surrounding the Central Library. And last year, it moved its corporate headquarters to the Stokely-Van Camp building at the corner of Meridian and St. Joseph streets nearby.

Parking a key issue

The companies differ significantly, though, on how they plan to address parking.

Van Rooy puts forth two options in its proposal. Under the first scenario, it would pay $46,200 annually to lease 70 unassigned spaces within the Central Library's underground garage.

In the second option, it would purchase the two 50-space Pennsylvania Street parking lots, which the library uses for staff parking. Van Rooy would purchase the lots for $350,000 and lease them back to the library for $1 per year. In exchange, the company wants free parking in the Central Library garage.

The library's two-level garage, which contains about 400 spaces, is not being used to capacity, Olsen said. But that could change with time as more patrons head to the library or book events in its newly opened auditorium.

"Parking's a tough issue," he said. "There's very limited parking capability in that area and it becomes even more of an issue as the neighborhood is more developed."

The neighborhood--a hodgepodge of residential, commercial and office properties--is gaining momentum as urban living becomes increasingly popular.

As part of its proposal, Van Rooy said it would like to build an elevator and an enclosed walkway on the west side of the Ambassador building to link the apartments to the garage. The company wants to split the estimated $330,000 costs of the connector and elevator access with the library.

Safe, close parking is essential for the apartment complex to be competitive in the marketplace, said Russ Seiler, Van Rooy's vice president of finance and development.

"We felt that was a relevant option to meet the standards that a downtown resident requires," he said.

Buckingham, for its part, proposes to purchase the Pennsylvania Street properties for $620,000. It would then lease 120 parking spaces back to the library staff on that property and other lots it owns in the area. Winkler said the one-story building on the site could be used for office or retail space, although he said it is in poor condition.

"It's going to be a difficult building, to be honest," he said. "It's just kind of unspectacular; it just doesn't have a whole lot of character to it."

The company also proposes to build a multistory parking garage for Ambassador tenants and those in other nearby Buckingham buildings.

The garage likely will be built near the Plaza apartments at 902 N. Pennsylvania St., Winkler said, straddling the current Master Glass & Color Inc. parking lot at 922 N. Pennsylvania St., which Buckingham also owns.

He said the garage proposal sets his company's plan apart since it eliminates the need to use the library's underground spaces.

"I think our biggest advantage is the parking situation," he said.

A third plan, submitted by independent developer and landlord Edward D. Gutting, proposes to purchase only the vacant lots on Pennsylvania Street for $471,101. He said the parking spaces could then be leased back to the library for staff parking at an amount to be determined in the future.

He did not bid on the Ambassador building.

Recommendation coming

Library officials have been reviewing the three plans for the past couple of weeks, and Olsen is expected to submit a recommendation to the Library Board of Trustees' Building Committee June 10. Trustees likely will make a decision at their June 19 meeting.

Price will be a key factor in any decision, Olsen said, since the library hopes to accept a bid that either meets or exceeds the appraised values of the properties. The Ambassador property was appraised at $900,000 and the Pennsylvania Street lots at $595,000.

The library also is looking for a project that will spur development and meet the needs of the historic area, said Communications Director Maria Blake.

The Ambassador became the center of controversy in 2001, when library officials proposed to move it to make way for the $150 million library expansion. After much public outcry, officials changed their minds.

Mark Dollase, vice president of preservation services with the Historic Landmarks Foundation of Indiana, said he and other historians were concerned when the library initially proposed to move the building.

But he said he now welcomes development at the Ambassador site, since it reinforces the importance of the building.

"To hear that the library is trying to find suitable users is a positive move from our perspective," he said. "I think there is so much more potential for this midtown section just north of the downtown area that hasn't been explored yet."

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