Developer shelves plan to buy city land, build Meijer

May 6, 2013

A Minnesota-based developer is scrapping its controversial plan to build a mixed-use project north of downtown that would have been anchored by a Meijer store.

Opus Development Corp.’s proposal to buy 2.4 acres from the city near 16th and Dr. Martin Luther King Jr. streets relied heavily on its ability to purchase and demolish a series of nearby homes to make the development work.

But Opus encountered stiff resistance from residents of the Flanner House neighborhood, which received a boost from Indiana Landmarks. The historic preservation group included Flanner House on its latest "10 Most Endangered" list due to the prospect of redevelopment.

The organization said late last month that 35 of the 181 homes in the neighborhood could be razed as part of the Meijer project.

Responding to IBJ questions about the project, Doug Swain, vice president and general manager of Opus’ Indianapolis office, said on Friday via email that the company has ditched its plans.

“Opus has thoroughly evaluated the potential development opportunity at Martin Luther King Street and has decided not to pursue it further at this time,” he said. “Opus is committed to well-planned urban development projects in Indianapolis and will continue to work with the city of Indianapolis to identify future opportunities.”

Opus had offered to pay $600,000 for the vacant piece of land and had until the end of the year to seal the deal by purchasing the 35 homes in the Flanner House neighborhood, before a city-imposed deadline.

Opus also has alerted the city’s Department of Metropolitan Development of its decision to pull out of the deal. DMD Director Adam Thies is uncertain how the city might proceed with selling the property.

“At this point, I’d have to talk with our staff,” he said. “All I know is that Opus is rescinding its plans.”

The city is not offering any tax abatements or other incentives to entice a sale, Thies said.

City officials selected Opus’ bid over one submitted by Indianapolis-based Douglas Realty Group, which offered to buy the property at the minimum bid price of $497,250.

Alerted of Opus’ decision, Douglas Realty principal Doug McAuley said the firm is still interested in developing the site by following its original proposal to offer a mix of apartments and retail smaller than what Opus had proposed.

“Our plans did not call for destroying the neighborhood,” McAuley said. “We would like to incorporate the neighborhood into the project with smaller, neighborhood-friendly retail.”

Homes in the Flanner neighborhood were built between 1950 and 1959 through an unusual cooperative aiding African-American families that couldn’t secure conventional mortgages. More than half the houses still are owned by the builders or their descendants.

Several of the homeowners signed a petition sent to the city last week indicating their refusal to sell to Opus.

One of those, Disa Watson, has lived for 51 years in her home that her father built in the neighborhood. The homes range from 900 square feet to 1,800 square feet and originally cost $8,500 to $9,500 to build, she said.

Watson could not be reached for comment Monday morning. But before Opus rescinded its plan, she told IBJ that the developer had never floated an offer to homeowners who would have been affected.

The replacement value of the homes is between $150,000 and $175,000, she said.

Meanwhile, Meijer, which did not respond to IBJ phone calls, has interest in other Indianapolis-area locations. The retailer plans to build a supercenter within the Anson development near Whitestown, scheduled to open in 2014, and another in Plainfield at the corner of Dan Jones Road and U.S. 40.
 

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