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.”