Delays in getting land zoned properly for the $150 million mixed-use project known as North of South are jeopardizing the developer’s plans to break ground by the end of the year.
Locally based Buckingham Cos. is leading the development set to be built on 14 acres of land owned by Eli Lilly and Co., which houses a parking lot north of South Street between Delaware Street and Virginia Avenue downtown.
The city is offering to provide an $86 million loan and build $9 million in infrastructure to get the project off the ground. Plans call for a boutique hotel, retail space, a YMCA branch and 320 upscale apartments.
When the projected was officially unveiled in late September, Buckingham expected to begin construction by the end of the year and be finished within two years.
As December approaches, though, the timeline already appears to be encountering setbacks. The City-County Council has yet to consider the development and members can’t weigh the proposal until their Dec. 20 meeting, at the earliest. Council approval hinges on a rezoning request that first must be OK’d by the Metropolitan Development Commission.
The commission is set to hear the request at its Dec. 15 meeting, after members voted last week to grant a continuance to business owners near the site.
The owners are concerned that additional traffic and its effect on on-street parking will make it difficult for visitors to get to their shops. Larry Whitham, an attorney for Mayer Fabrics at 321 S. Alabama St., said his client is especially worried about semitrailers being able to get access to loading docks to make deliveries.
“Without those loading docks,” he said, “my client cannot exist.”
But attorney Tim Ochs, representing the development’s partnership, known as NOS Innovation Partners LLC, argued that the project needs to keep on schedule. Any delays will threaten plans to open the hotel before the city hosts the Super Bowl in February 2012.
“This is a very complex project; it’s a series of dominoes,” Oakes said. “If you pull out one domino, our concern is that it delays the inevitable start of construction.”
He further asserted that the proper forum for business owners to air their grievances is in front of the Regional Center hearing examiner. Because the site is located within the Regional Center overlay district, its design needs to comply with Regional Center Urban Design guidelines.
Site plans likely won't be presented to the Regional Center hearing examiner until January, Metropolitan Development Commission spokesman John Bartholomew said.
Buckingham executives declined to comment on the implications of a delay, deferring questions to the city.
Deron Kintner, director of the Indianapolis Local Public Improvement Bond Bank, acknowledged the issue but shrugged off any troubles that may result from a late start.
“Obviously, it’s not going to get started as early as initially thought,” he said. “But it’s not problematic from our standpoint.”
Even so, council Democrats will be scrutinizing details of the project, particularly in light of the council’s passage earlier this month of a contentious plan to lease the city’s parking meters to a private company, Democrat minority leader Joanne Sanders said.
The measure narrowly passed 15-14, with every Republican voting along party lines to ensure approval.
To Sanders, the vote illustrated the administration's lack of confidence in the city's ability to manage parking meters.
“But apparently we can efficiently loan money to private companies when banks won’t even do it,” she said.
The city plans to fund North of South by issuing bonds, using income generated by the development to pay off the costs. Instead of $86 million, however, the city actually is borrowing $98 million to pay for administrative costs related to the bond sale and for interest payments while the project is under construction and ramping up.
City officials said the additional $12 million adds flexibility to the bond issue, because it’s often impossible to know how the bond markets will perform between the time of filing and issuing of debt. They also say bond issues involve “soft costs,” such as interest.
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.
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.