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City Market board sought 3-year closure for redevelopment

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The Indianapolis City Market’s board recommended closing the historic downtown landmark until 2013 and ousting all its tenants before Mayor Greg Ballard settled on a less aggressive turnaround plan.

Ballard’s decision prompted the resignation last month of former City Market Board President Bob Whitt, IBJ learned Tuesday morning.

Whitt is the executive director of the White River State Park Development Commission. He said he’s been replaced at the head of the City Market’s board by its former vice president, Wayne Schmidt, a principal with locally based architectural firm Schmidt Associates.

“They were going in a different direction from what I thought was the way to go,” Whitt said. “It’s currently a food court, made up of local mom-and-pop prepared food vendors. We wanted to totally reinvent it as a true public market, emphasizing local produce, meat, baked goods that are baked on site, coffee that is roasted on site, a vibrant area to draw people and celebrate all the great locally produced and artismal foods.”

Schmidt did not respond to IBJ’s telephone call this morning.

Ballard’s Special Counsel, John Cochran, said Tuesday afternoon that the mayor’s preference is for the City Market to remain open for business. He said several City Market upgrades are currently under consideration, including improvements to its heating, ventilation and air condition system, which might at some point prompt a temporary closure, or abbreviated operating hours.

“It is the goal of the Mayor’s office to keep the market open and as easy as possible for the current tenants to conduct business during the changes,” Cochran wrote today in response to IBJ’s questions.

The City Market’s board, under Whitt, recommended in a formal study in August that the market be shut down for more than three years for a major redevelopment and reorganization. The city released the formal plan publicly this week in response to inquiries from media outlets, including IBJ.

Under the plan, the Indianapolis City Market Corp. would have been dissolved, terminating its staff and the leases it has with all City Market tenant businesses.

The recommendation document proposed completing the closure by the end of this month with a grand reopening scheduled for early 2013. The plan said about $9 million would need to be raised for capital improvements.

Under the board’s recommended timeline, the city would create a not-for-profit entity by January 2010 to oversee planning, fund raising, redevelopment and merchant recruitment.

The not-for-profit, with a board at least two-thirds different from its predecessor, would have been responsible only for the City Market’s center hall. The wings would be operated by private entities, a plan the city is still considering. Finding new uses for the wings is the centerpiece of Ballard’s turnaround plan.

In January, the City Market’s board hired locally based consulting firm Excelleration Inc. to explore solutions for the 124-year-old institution’s many challenges.

Excelleration President Jeanne Farrah said her firm, which spends much of its time studying not-for-profits, schools, libraries and parks, reviewed every previous research study on the City Market, then surveyed its vendors. After comparing it to similar markets in other parts of the country, Excelleration shared its findings with the City Market’s board.

The board shared the study, called “The Indianapolis City Market Recommendation for Change,” with Ballard’s administration in August.

The report notes current challenges for the struggling market, such as pending tenant disputes with vendors; unused floor space; low foot traffic from patrons; and a business model that isn’t viable without city subsidies.

The study points out that the City Market’s $2.7 million renovation in 2007, which dragged on far longer than anyone had expected, left many practical challenges unsolved. Those include inadequate parking, no neighborhood grocery as anchor tenant and lack of loading docks or multi-merchant food pick-up and delivery centers.

“Most vendors were disappointed by limited gains in operational efficiency accompanied by some loss of ambience,” the document reads.

According to the document, even if the City Market charged its vendors full market rate rents and enjoyed full occupancy, it would still suffer a $250,000 annual shortfall in its budget—and that’s not including any contingency fund for building repairs.

The city of Indianapolis has subsidized the City Market for decades. According to Cochran, the city picked up $332,005 in City Market costs in 2008. This year to date, he wrote, the city’s subsidy for the market has been $314,000.

Meanwhile, the plan recommended the City Market’s new board contract with a “retail development specialist” to handle all redevelopment duties.

Finally, the board recommended the City Market close its east and west wings, then sell those properties or offer them via long-term leases to private developers. This plan appears to be the only portion of the board’s proposal Ballard has kept intact so far.

The Indianapolis Office of Enterprise Development recently issued a request for information seeking ideas from private firms for the two wings. The proposals are due Dec. 2.

If Ballard had chosen to follow the board’s recommendations, the document says the city would have needed to follow several dramatic steps to oust the City Market’s current tenants, including paying off the Indianapolis City Market Corp.’s debts to creditors in order to avoid bad press and to start the “reinvention initiative with a clean slate.”

The proposal also recommended hiring a liquidation firm to handle the security and the logistics when tenants were exiting the buildings.

According to Cochran, the City Market will honor its legal obligations to all its stand owners under their current leases. He said over the next few weeks, the City Market’s board will contact stand owners individually to discuss moving them from one location to another within the main City Market hall.

“The board believes that many of the stands are too large for what the stand owners need, and the board will offer to work with the stand owners to renegotiate the stand sizes in some or all of the leases down to a size that is optimal,” Cochran wrote. This would result in an overall decrease in the rents for each stand owner. Nevertheless, it would be the choice of the stand owner.”

Whitt told IBJ he resigned from the City Market’s board “a few weeks ago” because Ballard chose to go a different direction.

“It’s not going forward because the mayor and [his] organization last week announced their plan,” he said. “I’d pretty much gotten to the point where I was not able to move the thing forward.”

“I think time will tell,” Whitt added. “It’s one of those things, it’s hard to say what is the right answer. But obviously they didn’t feel that our proposal was the way they wanted to go.”

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  • Cabela's
    You want to attract folks..... Cabela's for Cryin Out Loud!
  • Great Places
    Mr. Whitt is right on this, having carefully considered the study presented. Half steps will bleed the energy and imagination out of the project and end up with the lowest common demoninator and an unsustainable
    program. It has to be a "destination" place; you cannot build enough condos to support the market. Parking, because this is Indy, is an essential component.
  • City Market
    Condo's and apartments are not the only solution. You need to create a venue that attracts people outside of downtown. The City is looking for ideas to create a venue that attracts attendees to an Arts facility and a fitness facility. If you design a complex where the inflow of traffic to the Arts and fitness venue has to be walking through the market, then you can create a situation where several hundred thousand people a year walk through the market. Then, the pedestrian traffic will create a "scene" and just watch how the market will be transformed. I think Ballard is right on with this one.
  • Condos-apartments
    I agree with Joyce. For this market to be viable, there needs to be more condos and apartments in this area. The development of Indianapolis needs to focus on having more of both in the east, west, and south corridors of downtown. More people, better business opportunities. Simple.
  • no park, no go
    I went there a couple times this summer, but one day the parking rates had gone up a lot, no one could tell me where the special parking lot was, even though it was advertised as a parking special. Bad decision, bad service.
  • I dunno 'bout that..
    One thing they might look at is the Findley Market down in Cincinnati... While it's not 100% occupied, it's well over 3/4; of course, there's related merchants in the adjacent buildings surrounding it, and parking's USUALLY not a major issue - usually. Effective parking to make City Market viable might even involve closing Market Street and/or Alabama to through vehicular traffic....
  • Yes to public market
    Whitt's idea of a true public market is the right one--and works beautifully in lots of other cities, such as Columbus, Ohio--but only with a nearby parking lot. For a true public market like Whitt describes, I'd make a special trip--if I could count on a parking space. Why not use at least some of the former Market Square arena site as City Market parking? And if the Market's bleeding money, how can its board continue to justify hiring consultants who have never come up with a good answer?
  • City Market
    The only way the City Market can be successful is for lots of condos to be built on the adjacent properties. There have to be more regular customers. What are people supposed to do? Shop for produce on their lunch hours and find a way to keep it cool until after work? Just build the condos. The rest will take care of itself.
  • City Market
    According to Bob Whitt "It's one of those things, it is hard to say what is the right answer." Ha. The mayor's office and the City Market board have not done anything worthwhile in years, if ever, regarding how to use the market as a market. This is disgraceful considering that the market could and should be the best thing for downtown and people. I'm old enough to remember going to the market for two grapefruit and leaving with 4 shopping bags of fruits, vegetables, meat and fish. It was great; it was what a city market is suppose to be. I could not believe it when Moody Meats left; they would even deliver your order to your office. I have often wondered what the mayor's office was getting for their lack of involvement and support for a real city market. So what is the mayor's new plan?

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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