Six business groups are vying for Mayor Greg Ballard’s approval to redevelop the antiquated wings of the historic Indianapolis City Market. Their proposals range from a bicycle hub and microbrewery to a “Center for Sustainable Agriculture” showcasing the best of Indiana’s locally grown foods.
But the one-two punch of tight credit and the recession could indefinitely stall all their best-laid plans.
“Most of the proposals are really looking for the city to invest a great deal of money, then ... the proposal writer would manage a process. And if there’s profits left on the table, they’d share them with the city,” said Indianapolis architect Wayne Schmidt, board president for the Indianapolis City Market Corp. “It would be very hard for anybody to finance a project right now.”
The city issued a "request for information" this fall, seeking new ideas for what to do with the struggling market. IBJ reviewed the proposals after making a verbal public-records request.
Founded in 1886 and located just north of the City-County Building at Delaware and Alabama streets, City Market has long been a lunchtime institution downtown. But its business has endured a slow, steady slide for decades as its customers moved to the suburbs.
In recent years, City Market’s problems were exacerbated by the demolition of Market Square Arena, former home of the Indiana Pacers, immediately to its east. The market’s east wing, which had connected it to the arena, is now nearly vacant. Its west wing also is underused.
Indianapolis spent $2.7 million three years ago to renovate City Market’s historic main hall. Ballard wants the market to become self-sustaining, and he has been attempting to eliminate its annual $250,000 utility subsidy from the city.
Since the RFI was issued, City Market has been taking steps to clear the path for potential developers and consolidate existing tenants inside the Main Hall. For example, in December the market evicted onetime anchor tenant Constantino’s Market Place after reaching a settlement over $27,000 in unpaid rent. Only 40 percent of City Market’s space is now under lease.
But City Market Executive Director Jim Reilly said he’s starting to find success in landing new tenants. He recently signed a lease with organic merchant Peace Leaf Tea, and Reilly said prospecting for others is going well. In the meantime, the market is reorganizing vendors already in the Main Hall. The idea is to minimize each one’s footprint, opening space for a larger mix of fresh and prepared food merchants.
“A lot of people still love the place and want to see it succeed. We will take advantage of that,” Reilly said. “We’re getting a chance to get this thing right, and we will.”
As IBJ reported Dec. 3, the six RFI responses include one from the not-for-profit Riley Area Development Corp., which proposes erecting a new Performing Arts Center and affordable housing complex for artists on the east and west wing sites. Riley’s proposal, which would include collaboration with the YMCA of Greater Indianapolis, also includes non-binding memorandums of understanding from 21 local arts organizations that expressed interest int he project.
“Imagine a performing arts complex with a central area for crowds [to] gather on weekends to mix and mingle, then disperse to the five different performance opportunities at 8 p.m.,” the Riley proposal reads. “All in a complex that provides affordable housing and rehearsal space to the performing arts and literary arts community, conveniently located on the Cultural Trail and accessible from all parts of Indianapolis.”
Riley’s proposal, the most detailed of the six, lays out three potential price tags: At $33.5 million it would build a 63-unit apartment building and three 100-seat black-box theaters. At $45.5 million, it would add a $12 million, 500-seat theater. And for $50.5 million, Riley also would build hostel space, rehearsal rooms, banquet facilities and a catering kitchen.
Riley’s proposal estimates its performing arts complex would draw 278,000 attendees annually, infusing $22 million into the Indianapolis economy. To finance its project, Riley depends heavily on low-income housing tax credits and $20 million from the YMCA.
Chicago-based real estate firm Jones Lang LaSalle seeks to expand the scope of City Market’s redevelopment, proposing a larger-scale project that would include a five-level parking deck to the north, the vacant Market Square Arena site and the Old City Hall at 202 N. Alabama. Ballard already is considering six separate business proposals to redevelop Old City Hall.
Jones envisions a three- to five-year process exploring plans to create what it calls a “festival retail food destination” at City Market. The company also suggests adding national chain restaurants such as Olive Garden or Ram Brew Pub to the current mix of local vendors. It also would investigate refurbishing the City Market’s 20,000-square-foot basement catacombs as a restaurant and building a 200-room hotel with ballrooms and conference rooms on the MSA site.
“In examining the site, its surrounding areas and potential opportunities, Jones Lang LaSalle has uncovered some related opportunities at adjacent sites which it feels and respectfully suggests be explored in order to ensure the future success of the City Market,” Jones wrote.
Columbus, Ohio-based planning firm Kinzelman Kline Gossman’s proposal aims to restructure the City Market’s management to increase its efficiency. It proposes replacing the market’s wings with mixed-use “green” buildings and an outdoor performance venue, with a bike hub/shop, a “green” grocer, a microbrewery and wine bar.
Kinzelman would tear down both wings. On the west side, it would build a three- to four-story building with a ground-floor retail or food anchor. On the east side, it proposes a public plaza with an 8,000-square-foot bicycle hub facility connected to the Cultural Trail. Its initial financing ideas for the project include selling the naming rights to the new east side pavilion and leveraging the City Market’s three-way liquor license to recruit restaurant and entertainment tenants.
“While being in a historic building is a great bonus, the most important issue for the building is to showcase the products well and make it easy for the customers to buy,” Kinzelman wrote.
St. Louis-based developer McCormack Baron Salazar points out in its RFI response that “a comprehensive development plan is not realistic at this point.” It broadly wants to build a “Best of Indiana” market and establish the Indiana Center for Sustainable Agriculture, with room for a “small, highly adaptable black-box theater and/or cabaret studio space.” It proposal aims for energy savings from new window and insulation technologies and solar energy systems.
McCormack is frank about the challenge of funding a City Market redevelopment, explaining its intent to capture capital from local foundations, philanthropic groups and government sources, such as historic and new markets tax credits.
“We will need to deal with a funding gap,” McCormack wrote. “The key to filling the gap will be matching the market user constituencies with funding sources that have a vested interest in their operational success and in the success of the market in total.”
Although it doesn’t affix a price tag to its project, locally based architecture firm Rowland Design’s proposal may be the least expensive in the mix. It proposes a number of ideas for reusing the east and west Wings. Options include a public health facility in partnership with the IUPUI College of Public Health offering medical screenings and tests, a fitness center that transforms the historic central hall’s mezzanine into a year-round jogging track, a culinary school, and a pair of educational wellness centers focused on Indiana’s professional sports and Hoosier children.
“It has been disheartening to watch the City Market struggle to define itself for a growing and diverse urban audience and we believe it has great potential to regain its standing,” Rowland wrote.
Locally based Tabbert Hahn Ping Global Strategies submitted a two-page response—by far the shortest of the six. Its central idea is to build an entertainment venue with a connected restaurant or bar that would seat 1,500 and host four or five shows weekly. It pegs the price tag at $15 million to $20 million.
“The facility would require TIF [Tax Increment Financing] in order to be built but would offer revenue sharing as a means of retiring the bonds,” Tabbert wrote.
Ballard’s policy director, David Wu, who is spearheading the mayor’s review of the six proposals, said the city is still evaluating the responses. He said the mayor wants to decide whether to take the next step sometime in the first quarter. But first, he said the city must analyze whether a redeveloped City Market would affect other parts of Indianapolis. Adding performing arts space there, for example, could draw activity away from other stages.
“We also are trying to think ahead of time, not just how to close the gap and get it built, but how does it operate? I don’t want to build something and find it will go bankrupt or require subsidies later,” Wu said. “It doesn’t mean you don’t take these risks, but you want to fully understand all of them.”