City Government and Development/Redevelopment and 2011 Year in Review

City backs string of high-profile real estate projects

December 24, 2011
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The administration of Mayor Greg Ballard found its stride in the final year of its first four-year term, at least when it comes to major publicly supported real estate projects.

The largest by far was CityWay, a $156 million mixed-use development now under construction at Delaware and South streets.

The complex, to be built primarily on Eli Lilly and Co.-owned parking lots, calls for a boutique 157-room Dolce hotel, a YMCA branch, 320 apartments and 40,000 square feet of retail and office space, all developed by locally based Buckingham Cos.

Taxpayers are acting as the project’s bank, putting up nearly every dollar used to build it, chiefly by loaning $86 million raised from the sale of municipal bonds.

As IBJ reported in April, taxpayers are shouldering most of the risk in the no-bid deal, while the potential for a tangible profit rests squarely in private hands.

Buckingham stands to cash in every step of the way, earning fees for all three of its divisions—development, construction and property management. And Lilly gains a new amenity for its corporate campus while cashing out of a 20-year-old arrangement with the city that required the company to make periodic payments on infrastructure bonds.

Elsewhere in Indianapolis, the city agreed to kick in $6.3 million toward a new parking garage in Broad Ripple that also will feature first-level retail. The project would replace a long-vacant service station and help alleviate a parking crunch in the area.

But critics of the $15 million project, including members of the Broad Ripple Village Association, question the new retail space and the rationale behind such a rich city subsidy.

City officials refused to share financial projections for the construction and operation of the 350-space parking garage, describing the documents—which developer Keystone Construction filed as part of its bid—as a “trade secret” exempt from public disclosure.

In a 2007 study, Walker Parking had reported the selected site would be inappropriate for a parking garage and that such a structure should cost about $15,000 per space. The $6.35 million subsidy for Keystone works out to more than $18,000 per space.

Construction has begun on a project to convert the former Bush Stadium into 268 apartment units, whose rents will range from $480 to $1,400 per month. The stadium’s façade will be preserved.

The $23 million project, led by developer John Watson, is set to get a $5 million infusion from the city.

Finally, the city sought bids for the redevelopment of a 1.45-acre property at Massachusetts Avenue and New Jersey Street occupied by the Indianapolis Fire Department. The city had not yet picked from among five bidders. The project is expected to cost $30 million to $50 million.•

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