City Government and Mixed-Use and Greg Ballard and Urban development and Government & Economic Development and Real Estate & Retail

City's ambitious tech-corridor plan no sure thing

June 18, 2011

City leaders are hoping a new plan launched by Mayor Greg Ballard’s administration to transform the area northwest of downtown into a high-tech job and life-sciences research magnet will turn the long-discussed idea into a reality.

But whether that happens remains a big if.

district mapOn June 16, Ballard’s economic development team unveiled renderings of how it envisions the district from just north of Indiana University-Purdue University Indianapolis to West 16th Street. The plans include eclectic residential spaces, streetscapes filled with landscaping and public art, newly built urban parks, and lab and office buildings to house not just life-sciences companies but high-tech jobs in industries such as motorsports and information technology.

It’s a bold plan—one that would require tens of millions of public investment dollars and hundreds of millions in private dollars. But if the city can pull off the so-called 16 Downtown Technology District over the next two decades, it would transform the now bleak urban landscape and potentially add thousands of jobs and residents to the area.

The effort is stacked with a myriad of challenges—not the least of which is launching a massive campaign to attract private investment at a time many companies remain timid in the sluggish economy.

Add to that the expense and difficulties of assembling 40 acres of land—about a third of the space the city is marketing within the district—that are held by private owners.

And while Indianapolis has some distinctive strengths, such as its friendly tax climate and existing life-sciences infrastructure, it faces competition from scores of other cities trying to lure some of the same high-tech jobs.

IBJ.COM EXTRA
Click here to view renderings of projects in the 16 Tech district.

Pulling off such an effort, experts say, requires not just solid planning and aggressive marketing, but a cultural shift.

“It’s not simply enough to say, ‘We’re going to build a technology corridor,’” said Tom Murphy, a senior resident fellow at the Washington, D.C.-based Urban Land Institute who was mayor of Pittsburgh when the city was making its technology-driven transformation in the last two decades. “It’s an understanding we need to become more entrepreneurial as a community.”

Those leading the effort say they’re up for the challenge. And with infrastructure dollars on hand, public control of much of the site, and momentum from several residential developments in the area, they say now is the perfect time to pursue such a plan.

“It’s been a 30-year positive growth story for downtown,” said Brad Hurt, a Crawfordsville-based economic development consultant who worked on the 16 Tech project. “This is a logical extension of that.”

Years in the making

Talk of developing the area into a life sciences hub began in earnest in 2002, when the Central Indiana Corporate Partnership commissioned a study of the area by New York-based Beyer Blinder Belle Architects and Planners LLP.

The firm came up with a multiyear redevelopment plan that included many of the same elements city leaders today have discussed: a trendy urban district where residents can live within blocks of work.

City leaders also began to take steps to implement that initiative. In 2007, then-Mayor Bart Peterson’s administration set aside $4 million to renovate 16th Street from near Interstate 65 west to the White River. That project is now complete, but there wasn’t enough funding for other improvements, such as signage to brand the district, that initially were planned.

Around the same time, the city lost a potential major tenant for the area—mail-order pharmaceutical company Medco, which built its $140 million pharmacy distribution center in Boone County because there wasn’t a large enough contiguous and shovel-ready site in the area.

In early 2010, locally based clinical pharmaceutical testing company AIT Laboratories also bypassed the district and instead chose to expand on the northwest side, in part because site infrastructure wasn’t ready.

City leaders had renewed the redevelopment effort a few months earlier. Ballard assembled a task force that prepared a plan for the area and brought on Develop Indy, the city’s economic development arm, to execute it.

Jim Garrard, who served as Peterson’s economic development director in 2006 and 2007, said during his tenure, among the biggest challenges in marketing the area was finding enough public financing to enhance it.

“Folks look at the 16th Street corridor, and it doesn’t look that great,” Garrard said. “If you want to relocate in that area, you want a campus that looks right.”

That could be different now. The updated city plans call for public park spaces, streetscapes and other infrastructure enhancements that could cost $15 million to $20 million. Money from the $1.9 billion sale of the city’s water and sewer utilities to Citizens Energy Group, which is pending approval by state regulators, is a potential source.

Nancy Langdon, who is leading the project for Develop Indy, said the city also is better positioned from a real estate perspective to market the site.

A portion formerly designated for the Larue D. Carter Memorial Hospital is now in the process of being acquired by Indiana University, which is actively involved in the city’s planning. After becoming governor in 2005, Mitch Daniels tabled the state’s plan to move the hospital to a new building.

If the Citizens sale goes through, it also could open up several acres of water-company land that Citizens might no longer need because of efficiencies the company hopes to achieve by consolidating utilities.

The city and IU own about two-thirds of the tech corridor’s 120 acres. That control will make land acquisition less challenging than if the majority of the property were in private hands.

Tom Morrison, IU’s vice president for capital planning, said the city’s strategy for the area “meshes well with the long-term interests of the university,” including its yet-to-be released master plan.

“It’s one of those zones that’s ripe for public-private partnership,” Morrison said. “For many companies, we know they want to be close to a major university. That can play a great role for the city.”

Develop Indy also touts projects that are under way or soon will be in the district. Those include developer John Watson’s plan to build 268 apartments in and around the historic Bush Stadium, a $3 million expansion of the Herron School of Art and Design, and mixed-use apartment projects near Indiana Avenue by developers Buckingham Cos. and Trinitas Ventures.

The city also will invest another $3 million in public dollars from the utility sale to renovate Indiana Avenue from roughly 10th to 16th streets with new landscaping, walking paths, bike lanes and other streetscape elements.

Plenty of challenges

Even with such factors working in the city’s favor, pulling off the project will take a sizable effort.

The stagnant economy poses a challenge, said Bill Ehret, president of Indianapolis-based Summit Realty Group.

“There’s not a lot of demand for general office space,” said Ehret, who added that the most viable prospects would be growing startups or companies relocating from out of state.

And there’s stiff competition for those kinds of firms, said Murphy, the former Pittsburgh mayor.

On the startup front, areas such as Silicon Valley, where venture capital is more plentiful, can be formidable competitors.

Dynamics within the site also could prove tricky. Commercial developers say the urban campus is a strength, since that environment appeals to the next generation of workers. The site also benefits from being near IUPUI and projects such as the new Wishard Hospital.

But the urban setting also poses challenges. Acquiring privately owned property, for example, tends to be more expensive than developing a suburban site, said Dennis Dye, executive vice president of Browning Investments, a local commercial real estate firm.

He added that establishing transportation, such as bus routes, connecting IUPUI and the new tech district, will be critical to its success.

Yet he thinks the project can succeed, and that now is a prime time to do it.

“The community is doing the right thing by trying to be a catalyst,” Dye said. “When the world does get a little better, you probably have a head start. At the end of the day, it will probably be a matter of not if, but when.”•

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