A local developer’s $12 million project is transforming a four-story office building and five acres of surface parking lots adjacent to The Fashion Mall at Keystone into a new retail and restaurant destination.
Locally based PK Partners is renovating the first two floors of the 1980s office building at 8555 N. River Road into retail and restaurant space, and adding two stand-alone buildings including a 5,200-square-foot Distinctive Diamonds store along East 86th Street.
The project dubbed Five River Crossing sits at the northeast corner of East 86th Street and River Crossing Boulevard in the middle of the state’s most lucrative retail neighborhood.
The developer bought the office building in June 2009 for about $5 million from locally based Duke Realty Corp., and plans to spend another $5 million on the renovation. The fast-growing Distinctive Diamonds will spend about $1.5 million building its new home at the southeast corner of the site. A smaller outlot tenant is proposed for the northwest corner.
PK Partners is talking with an upscale restaurant user about taking 8,000 square feet in the existing building, said PK Partners President Phil Larman. The first floor likely would have three other users. Each would have its own entrance and signage. Second-floor tenants would be accessible via balcony entrances.
Each floor in the building has about 18,000 square feet of space. Plans call for the upper two floors to remain office space.
The project should lease up quickly given an occupancy rate of more than 95 percent in the Keystone at the Crossing and Clearwater areas, the highest of any retail trade area in the county, said Bill French, senior vice president in the local office of Cassidy Turley.
“I know Phil is going to really turn that into a jewel that’s going to enhance the overall image of Keystone at the Crossing,” French said. “He’s got a great location for restaurants and other retail to take advantage of the frontage. It has all the key ingredients.”
The most important, of course, is location: The five miles surrounding the site boast a population of more than 180,000 people and average household income of $86,000, PK Partners says in marketing materials for the site. More than 70,000 cars pass by each day.
The corridor has been a hotbed of development lately in a market still feeling the hangover from an extended recession and credit crunch.
Indianapolis-based Simon Property Group Inc. is planning an upgrade of its neighboring Fashion Mall at Keystone, by expanding a bridge that connects the east and west portions of the mall to include more shops and restaurants.
Development also is heating up on the other side of White River, after 86th Street dips to becomes 82nd Street.
Locally based Kite Realty Group Trust is redeveloping the Rivers Edge shopping center to accommodate new stores for Nordstrom Rack, Container Store and BuyBuy Baby, along with a new location for the home-grown Indianapolis restaurant Harry & Izzy’s. And a Florida company is planning an amusement center with a bowling alley, concert hall and restaurant in the former home of the AMC Clearwater movie theater at 82nd Street and Dean Road.
PK Partners is working on a retail-friendly façade for the 8555 River Road office building, and a new office entry at the rear of the building. And workers are trucking in fill dirt to make way for the new home for Distinctive Diamonds, which is moving from a 3,100-square-foot space on the top floor of the existing office building.
The shop is on track to record 2011 revenue of $7 million to $8 million, and has grown the figure every year from a base of about $500,000 the year it opened in 2002, said Distinctive Diamonds President Eli Benisty, a former diamond wholesaler.
Benisty arrived in Indianapolis in 1984 with a bag of diamonds to sell for relatives in his native Israel who own the diamond-cutting company Arabov Group. Arabov owns the Indianapolis store and sister stores in North Carolina and Alabama.
The new store, which will sit on the southeast corner of the site across the street from competitor Reis-Nichols, is slated to open in the fall. The company entered into a long-term land lease with PK Partners in a deal brokered by Jonathan Hardy and Andrew Schrage of the local office of Coldwell Banker Commercial.
The Five River Crossing project will provide a front door of sorts for River Crossing, the best-known project in the privately held PK Partners’ development portfolio.
The existing portion of River Crossing includes 110,000 square feet of retail space and the Champps Americana restaurant, 250,000 square feet of office space, more than 300 apartments, and the 314-room Marriott Indianapolis North, all next door to Keystone at the Crossing and The Fashion Mall at Keystone.
Larman’s late father, Leonard, actually started the development of Keystone at the Crossing in the 1970s. He oversaw construction of the original mall, restaurants and an office tower. But a few years later, his partner Indiana National Bank had to divest its ownership to comply with new federal regulations.
In the shakeout, Leonard took control of the 85-acre River Crossing site but did not live to see it developed. Son Phil took over, winning zoning approval for the overall project in 1993.
PK Partners still has more development parcels in River Crossing, including six acres on the lake, and a 4-1/2-acre parcel where Simon Property Group had planned to build a new headquarters before former Indianapolis Mayor Bart Peterson helped persuade the company to stay downtown.•