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Interest high for soon-to-be-shuttered foundry: Size, location make redevelopment promising

September 19, 2005

When the workers at DaimlerChrysler Corp.'s Indianapolis Foundry clock out for the last time at the end of the month, they'll leave behind 756,000 square feet of factory space, tons of equipment, and more than 52 acres of industrial land on the city's west side.

Rather than becoming a rusting industrial relic along Interstate 70, however, the buildings will be razed and real estate experts expect the land will soon find a new use, albeit likely not for a factory.

"We believe it would make an excellent reuse for bulk distribution or [logistics]," said Michael Cook, local vice president of Chicago-based Equis Corp., which handles real estate matters globally for DaimlerChrysler. Equis is marketing about 34 of the 52-1/2 acres the automaker owns under and around the foundry.

The company plans to remove its equipment, tear down its buildings, and perform any required environmental remediation before closing on a sale of the property, Cook said. That process could take a year or more.

The property will likely be under contract to a prospective buyer by the end of this year, however. The listing price is $3.6 million for all three tracts Daimler-Chrysler is selling, or $2.1 million for the 24 acres the foundry sits on.

"I cannot believe the amount of interest we've had," Cook said. "It's been phenomenal."

Equis has been marketing the property about three months and has received "four or five" offers on it to date, Cook said. He declined to name specific parties, but said potential buyers have been local, regional and national investors and users.

The site's relatively large size, rail access, location on Interstate 70 between downtown and the Indianapolis International Airport, and heavy-industrial zoning classification all make it attractive, said Patrick B. Lindley, principal and executive vice president at Colliers Turley Martin Tucker.

In recent years, most large-scale industrial development has happened in suburban counties, mostly because of a lack of available sites in Marion County, Lindley said.

Although the zoning classification was granted to a manufacturing plant, it will also permit some uses, such as a truck terminal or outside equipment storage, required by distributors, industrial brokers said. Some suburban business parks, including Plainfield Business Center, frown on large-scale outside operations.

"We can always use heavy industrial sites," said Thomas Cooler, senior vice president at CB Richard Ellis. "And that's a good area of the city for reuse."

So far, neighborhood groups and the city of Indianapolis haven't been heavily involved in redevelopment efforts while DaimlerChrysler seeks to find a buyer for the foundry site in the private market. Neighborhood officials are hopeful, however, they'll be included in discussions about the site.

"The neighborhood is confident Chrysler knows how to handle the shutdown in a way that is environmentally appropriate," said Jeff Gearhart, executive director of the West Indianapolis Development Corp. However, "there's a substantial amount of land from a development standpoint. We're hoping there's a more comprehensive conversation with Chrysler about how [land] disposal occurs."

For instance, Gearhart and other neighborhood groups would like a chance to weigh in on whether all of Daimler-Chrysler's land in the area-such as parking lots and spaces not directly used for manufacturing-should remain zoned for heavy industrial or intense commercial use.

There's also the question of the land that DaimlerChrysler is, for now at least, choosing to hold onto. Property for sale includes the 24 acres directly under and around the foundry, a company exercise facility on the east side of Tibbs Avenue across from the plant, and a vacant 7-acre lot on Warman Avenue about one mile from the foundry that had been used as a holding site for scrap awaiting transit.

Not for sale are about 10 acres just north of the foundry and across I-70 used for the factory's wastewater treatment and another 10 acres on the east side of Tibbs used for parking. Neither Equis' Cook nor a DaimlerChrysler spokesman could offer details about when or if those parcels will be sold.

When and if redevelopment of the site happens, it will be one of a growing number of shuttered local factories to find new life, Lindley said. Marion County facilities formerly owned by Illinois-based Olin Brass, Omaha-based Hebrew National and Chrysler have all been sold and redeveloped or absorbed by other industrial users in recent years, he noted.

"They still have a good, solid location," Lindley said. "They make good alternatives for industrial development."
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