Economic Development and Real Estate & Retail

South-side exit finally sparking development: Wal-Mart might by key to I-65/County Line interchange meeting expectations

October 10, 2005

An interchange linking Interstate 65 and County Line Road completed six years ago is finally helping attract large commercial development to a busy Johnson County corridor.

While Greenwood city officials are pleased by the amount of activity occurring there, they question why it took so long.

"We thought it would take off much sooner than it did," said Ed Ferguson, Greenwood's director of planning, zoning and economic development. "We still have several hundred acres available in what we call the I-65 overlay zone."

Road improvements in the zone, ranging from County Line Road south to Main Street, have helped spur development. Emerson Avenue was widened from two to five lanes. East of I-65, Graham Road, which runs into Arlington Avenue in Marion County, also will be widened to five lanes. That roadwork should be completed in late 2006 or early 2007, Ferguson said.

Greenwood Springs is the largest retail development under construction at the interchange and will be anchored by a Wal-Mart Supercenter and a Gander Mountain outdoor recreation goods store. The 150-acre tract is west of the interstate on the south side of County Line Road. Gander Mountain opened earlier this month, and Wal-Mart is slated to open in the spring.

Jacksonville, Fla.-based Regency Centers Corp. is developing the 40-acre retail project.

To the east, between I-65 and Graham Road, Grand Rapids, Mich.-based developer Heritage RDG LLC has two parcels totaling 60 acres under contract from County Line Partners LLC. Heritage plans to develop 500,000 square feet of retail space in a lifestyle-center concept. Leasing has yet to begin.

Completion is targeted for 2007, said Heritage RDG principal Greg Brendel. In the meantime, improvements to infrastructure, and additional housing, are needed to support such a massive development, he said.

"I think it's a phenomenally great area for the future," he said. "Right now, it's just a little before its time. It's going to take time and interest to attract national retailers to that site, and we're in the process of searching for those."

Potential tenants are hesitant to commit until they see how Gander Mountain and Wal-Mart fare, Brendel said.

Scott Langdon, president of Langdon Real Estate Services Inc., a land broker representing County Line Partners, agreed.

"The retailers that are on the fence will jump off once Wal-Mart opens," Langdon said. "We're looking for big things to happen in the summer of 2006."

Land in the area is fetching $175,000 to $200,000 per acre, Langdon said. That is much less than the $800,000 per acre developers are paying at the Michigan Road and I-465 interchange near Boone and Hamilton counties.

Heritage RDG, which is a partnership between Retail Development Group in Grand Rapids and Boston-based Heritage Property Investment Trust, is new to the Indianapolis market. The developer also plans to build a 300,000-square-foot Wal-Mart Supercenter along Michigan Road north of 106th Street in addition to its shopping center in Johnson County.

Brendel is targeting 2007 for his Greenwood development because the Graham Road expansion will not be finished until then. Water and natural gas lines also need to be extended to the property.

More homes need to be built in the area, too, Brendel said. Traffic counts show 77,000 cars pass by on I-65 daily, but significantly less travel County Line and Graham roads, Brendel said.

A mammoth housing development led by Carmel-based C.P. Morgan Co. should help increase activity. More than 900 homes are planned for University Park, at Main Street and I-65 south of the County Line Road interchange.

Eric Hillenbrand, second vice president of retail services at Colliers Turley Martin Tucker, said the I-65/County Line Road area has potential but isn't a sure thing for retailers.

"There's a lot of traffic there, but it's not an absolute slam dunk," Hillenbrand said. "It's not quite [as busy] as a Noblesville along [State Road] 37 that just seems like a natural progression."

Other commercial projects are on tap for the area along Graham Road, including a Greenwood fire station and Southpoint Business Park, a large-scale distribution park locally based Lauth Property Group has begun.

Lauth's business park will include at least six warehouse buildings ranging in size from 400,000 square feet to more than 1 million square feet. The first should be completed in mid-January, said Chris Alexander, Lauth's first vice president of industrial development.

Several factors, including a strong labor force in the area and easy access to I-65, swayed Lauth to develop a distribution center there.

"In the distribution world, if you have both of those things, those are your starting points," Alexander said. "We're really excited about the Greenwood area. We think Johnson County offers a lot."

A 10-year tax abatement from Greenwood granted Lauth for the first of the buildings also helped the decision, Alexander said.

A number of smaller developments also are planned for the area. Bicycle Garage and BGI Fitness owner Randy Clark is building a store at Emerson Avenue across from Greenwood Springs. The store, which should open in mid-January, will replace the south-side location on U.S. 31.

A couple of banks, restaurants, office buildings and an acute-care facility are among other developments planned for the area.
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