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Whitsett bids to redevelop Star headquarters

April 1, 2013

One of the city’s most prolific developers of affordable housing hopes to buy the Indianapolis Star headquarters to redevelop the property into apartments or condominiums.

Real estate sources tell IBJ that The Whitsett Group could have the edge in buying the 190,000-square-foot building at 307 N. Pennsylvania St. and its 500-space parking garage. Company owner Joe Whitsett did not return phone calls Monday morning.

Star Publisher Karen Crotchfelt tweeted Thursday that “we have offers on our Penn Street building and are moving the sales process forward with our partners. More soon.”

The newspaper’s parent company, Virginia-based Gannett Inc., received more than a half-dozen offers on the building in early March, and The Whitsett Group is one of the bidders, the sources said. Gannett put the Star building on the market in July. It has called the brick-faced offices home since 1907.

Whitsett would seem to be a logical buyer for the property. It is teaming with Indianapolis-based Ambrose Property Group to rehab the neighboring American Building at 333 N. Pennsylvania St. into 72 apartment units. Those tenants need a place to park, and the Star’s seven-story garage would solve the problem.

Whitsett and Ambrose also own the nearby 15-story Consolidated Building at 115 N. Pennsylvania St. with plans to convert it into 98 apartments. They closed on that property in August 2012.

Aasif Bade, a co-founder of Ambrose, said his firm chose not to explore a purchase of the Star’s headquarters.

“We’re happy with the recent investments we’ve made in Indianapolis,” he said. “While we think the entire block is a great opportunity, we decided not to pursue a purchase of the block.”

He declined to discuss whether his partners on the American Building project were pursing a solo acquisition of the Star headquarters.

Founded in 2007, Whitsett last year finished a $7.2 million project at 10th Street and Central Avenue with 86 apartments spread over a new building and the retrofitted former home of Central Products Inc.

The company also has begun construction on projects on the former home of the Keystone Towers at Allisonville Road and Fall Creek Parkway and Winona Hospital at 3295 N. Illinois Street.

At the Keystone Towers site, Whitsett plans to build up to 140 apartments in a $22.5 million project called The Point on Fall Creek. The hospital is to be replaced with the $6.5 million, 50-unit Illinois Place apartments.

Local real estate developers and brokers have said finding a reuse could be tricky for the Star’s labyrinth of buildings combined over the years with multiple floor levels, narrow hallways and a basement built to house printing presses.

Working in its favor is the prime location—within shouting distance of both Monument Circle and Massachusetts Ave., and a strengthening downtown real estate market.

For tax purposes, the building is assessed at $21.3 million, well above what it’s likely to fetch from a sale. The Assessor’s Office assigns a more than $14 million value to the land alone and just $7 million to the improvements.

The building is listed by the local office of CBRE, charged with unloading the property and finding the Star’s 350-employee staff a smaller, leased space downtown more suited for a media property that has shed hundreds of employees as it adapts to the digital age. There’s no asking price.

“When we moved the press out of here in 2002, this building became way bigger than we’d ever need. To maintain it or retrofit it for a modern media company would be very expensive,” Crotchfelt told IBJ in August. “We believe there’s a better place for us and hopefully a better owner for four acres of prime downtown real estate.”

Real estate brokers say the Star is considering Artistry, a new development by Milhaus Development, along with the Safeco Building at 500 N. Meridian St., and Regions Tower as possible new homes for its news operation.

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