Economic development leaders in Fishers are asking the Town Council to OK a six-year property tax abatement to help First Internet Bancorp construct as many as two office buildings on property overlooking Interstate 69.
The Indianapolis-based parent of First Internet Bank on July 25 opened a mortgage processing center at 11201 USA Parkway, a 49,700-square-foot Fishers building that formerly housed a St. Vincent Health medical center.
First Internet expects to invest $4.3 million in the building east of the highway, a commitment that early this year helped it secure a two-year property tax abatement worth $127,500. The property can accommodate two more 40,000-square-foot buildings, and company founder David Becker plans to keep growing operations there.
“That gives us capacity for future growth without having to scramble to find a location,” said Becker, who lives about a seven-minute drive from the Fishers site.
More than 60 employees already fill the third floor of the building, Becker said, and remodeling on the first floor should start later this year. More than a dozen prospects have expressed interest in leasing space on the second floor.
Although it still has room to expand there, the bank is asking Fishers to consider a tax abatement for a Class A office building or buildings that could accommodate future growth. The bank has asked for a six-year tax break on the new office space that would save it a total of about $426,000. A resolution up for the council's consideration requires that the work start by 2018.
“The business is growing very rapidly and they’re already thinking about their next building,” said Tom Dickey, Fishers’ director of community development. “Whenever the time is right, we want them to know they have a financial commitment from Fishers.”
First Internet has added about 25 employees since the beginning of the year, Becker said. It maintains an office near Keystone at the Crossing, but he said a portion of that operation could move to Fishers when the lease expires in five years.
The bank is promising just five jobs paying at least $30,000 a year in connection with the new office space, which it estimates will cost about $4 million to build. Actual employment is likely to be higher, Becker said, but construction likely would start before the space is required.
“We would build it before we need it, without question,” he said. “We could start it and lease it out.”
That would be just fine with town leaders, who are eager to accommodate other employers looking for space in the heavily traveled corridor.
“We want to use this as a tool to get the building started,” Dickey said.
And the sooner, the better. Upscale Class A office space is in short supply in the fast-growing suburb, Dickey said, citing second-quarter vacancy rates of less than 3 percent. Less than 9,000 square feet of such space was available for lease during the quarter, according to data from real estate brokerage Cassidy Turley.
Developer John Edgeworth called the local office market “bipolar,” saying there’s a shortage of contiguous space for large users but plenty of options in the 5,000- to 10,000-square-foot range.
His Edgeworth Laskey Properties LLC is attempting to address demand for headquarters-worthy space in Fishers with Two Concourse at Crosspoint, a five-story, 133,000-square-foot speculative building under construction west of I-69.
It will be part of the $100 million Concourse at Crosspoint office complex, launched in 2008 as the economic meltdown began. The first building in the park opened in 2010 and is now fully leased, he said.
No deals for the new building are in place yet, but Edgeworth expects tenants to be signed before it opens in mid-2014.
“Decision makers and employees want to be close to home, and that is a great location,” he said.
Edgeworth and partner Tom Laskey had enough confidence in the area’s potential, in fact, that they ignored brokers who urged the firm to develop call center space on the 26-acre property south of 106th Street. He credited town leaders—then and now—who wanted more for Fishers.
Case in point: In 2008, Fishers issued $10.8 million in tax-increment-financing bonds to cover infrastructure work for the entire five-building development. So Edgeworth Laskey didn’t have to come back to the town to ask for more help before it pulled the trigger on Two Concourse this summer.
First Internet’s abatement request presents a similar situation, Dickey said. If the Town Council approves the financial incentive for a new building now, the bank can start construction when the time is right—without navigating officialdom again.•