An upscale Dolce hotel and 75,000-square-foot YMCA are among the tenants slated for a $150 million mixed-use development being built on 10 acres of land Eli Lilly and Co. owns near its Indianapolis headquarters.
The development, details of which were announced at a Monday morning news conference, also include plans for 320 high-end apartments and 40,000 square feet of restaurant and retail space.
The city plans to fund the project by issuing bonds, using income generated by the development to pay off the costs, pending approval by the City-County Council. Indianapolis also plans to provide $9 million in tax-increment financing for sewer and street improvements. Council members are expected to vote on the financing by the end of the year.
“Traditional credit does not exist in this environment,” Mayor Greg Ballard said.
As IBJ reported in June, local developer Buckingham Cos. is leading the mixed-use project, dubbed North of South. It will be built on land that now houses a parking lot north of South Street between Delaware Street and Virginia Avenue. Construction should begin by the end of the year and be finished within two years.
The 148-room Dolce hotel and conference center will provide a nearby lodging option for international business travelers visiting Lilly, Ballard said, while the YMCA will serve employees as well as downtown residents.
“This provides a critical point of connection between the downtown and the facilities of the near-south side,” said Ballard, referring to Lilly, WellPoint Inc. and Indiana Farm Bureau. “I’m looking forward to getting this thing done.”
Lilly will continue to own the land and the state's Indiana Economic Development Corp. also is involved, making the project a public-private partnership.
New Jersey-based Dolce has 27 hotels worldwide and boasts on its website that it has hosted 30,000 events and 4 million clients. The location of the planned hotel and the partners involved made the project attractive to Dolce, CEO Steven Rudnitsky said.
“It’s all about location and our business partners,” he said. “We have a lot of corporate clients.”
Meanwhile, the YMCA proposed for the project will complement rather than replace the existing downtown branch at the Athenaeum, which was damaged in August after a 30-ton crane fell on the roof of the building. A market study performed by the organization showed enough demand to support both facilities, YMCA President and CEO Eric Ellsworth said.
Ellsworth estimated the new branch could attract 10,000 members, far more than the 1,600 at the Anthenaeum. But he said members will have access to both facilities.
“It’s not unusual for there to be more than one downtown presence for a YMCA,” he said.
Buckingham, one of the largest apartment developer/owners in the Midwest, has branched out in Indianapolis with mixed-use properties. The company is developing several properties surrounding its headquarters in the restored Stokely Building along North Meridian Street, and is shepherding a $20.5 million redevelopment of a former YMCA branch near IUPUI.
The project is expected to create 2,200 temporary construction jobs and 200 permanent jobs. It also is anticipated to generate $1.7 million in annual revenue for the city.
“This will be a very important link for Lilly employees and people we plan to retain and recruit, to have access to a state-of-the-art fitness facility, hotel and apartments,” Lilly President and CEO John Lechleiter said.
Still, the project could prove challenging, as other developers who have tried ambitious mixed-use downtown projects can attest.
A proposal from Indianapolis-based Allen Commercial for a mix of hotels, condos and restaurants in a project called Penn Centre across from Conseco Fieldhouse remains in limbo, though Allen still controls the land it needs for the project. The story is the same for Ralston Square, a $60 million proposal by Urban Space Commercial for a parking lot north of South Street between Meridian and Pennsylvania streets.
On the other hand, Legends District SoDo is a definite no-go. A team led by broker Ryan Zickler had proposed a $480 million mix of hotels, a theater and retail space on 11 acres south of South Street. Zickler, who lost several hundred thousand dollars on the ill-fated deal, still owns the southeast corner of Meridian and South streets but is looking for a buyer.