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Council backs city financing plan for $81M tower

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A proposal by Flaherty & Collins Properties to build an $81 million, 28-story apartment tower on part of the former Market Square Arena site passed its last big hurdle Monday evening.

The Indianapolis City-County Council voted 18-9 to provide up to $23 million in city financing for the project, with the stipulation that 30 percent of the workers hired to build the tower live in Marion County.

The measure passed by the council is nearly identical to what the Metropolitan and Economic Development Committee recommended earlier this month. The one exception: Councilor Vop Osili, who represents the district in which the development would be built, proposed an amendment reducing the term of the bond from 25 years to 15 years, a move that could save taxpayers $7.6 million, he said.

The amendment passed.

Prior to the vote, a handful of councilors expressed their opposition to the city’s support of the project.

“Our city has many needs: basic infrastructure, basic employment, Democrat Brian Mahern said. “The downtown has received the overwhelming lion’s share of attention from not only this administration but probably the past two or three.”

Much of the bond, $17.5 million, will go directly to construction costs while the remainder will be held as a safety net to fund unexpected expenses.

Besides questioning the financing, councilors also expressed concern over whether Flaherty & Collins can meet the local hiring goal. CEO David Flaherty said he is confident it can.

“It’s never been done before,” he said of the commitment. “We’re setting new precedent here. I think we’re really breaking new ground in a positive way.”

Of the 30 percent, half is expected to be minority hires. Flaherty said his company plans to hire a consultant to ensure it hits the marks.

The proposed Market Square Tower—if it’s built as planned at 28 stories and 370 feet—will be one of the 10 tallest buildings in Indianapolis. It would rank as the tallest apartment building in Indianapolis.

The tower would include 300 luxury apartments renting for $1,300 to $2,400 per month. About 500 parking spaces and 43,000 square feet of ground-floor retail space would be included. Flaherty & Collins said it prefers that a specialty grocer occupy the space and is pursuing Whole Foods as a tenant.

The development would be backed by a combination of public and private funds, with the city agreeing to contribute funding from the bond sale and land for the project appraised at $5.6 million.

“After sitting vacant for a decade, the former Market Square Arena site will soon transform our skyline with a gleaming new retail and residential tower," Mayor Greg Ballard said in a prepared statement released Monday night. "Exciting projects such as this make Indy a more attractive to place to live. I look forward to signing the proposal passed by the council and getting construction started on this project this summer.”



 

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  • Ironic
    Of course it is just a coincidence that potential residents of this beautiful new structure will no longer have the Justice Center "Jail" next door to them. Where to move the "Jail"? To the poor part of town where political influence is non-existent.
  • Scott- Really?
    The people who live in the tower pay local income taxes. The owners if the building pay property taxes, and the businesses located within the building also pay taxes. After the bond for the TIF is paid in 15 years, that is a lot of new taxes that is going into the coffee that the city never used to collect. It is called an investment for a reason. Nobody gets paid back 100% percent in year one....get real Scott!
  • Tax base...
    Todd What tax base. How much will this developer pay in property taxes? Is this another TIF project? Fill me in.
  • Wrong Business
    Investors and banks are in this business the taxpayers aren't.
  • Vacancy?
    You mean substantial vacancy in commercial, not residential. This is primarily a residential project. Not office space. Residential vacancy rates (rental/Condo) are low in the CBD.
  • CBD
    There is a high vacancy rate in commercial real estate not residential in the CBD. The occupancy rate in residential is something like 5-7% some estimate it is even lower.
  • umm
    Ground leases are a thing of the past. They complicate the future selling/purchasing of the asset. The real issue is there is substantial vacancy in the CBD.... adding another building doesnt help
  • Mahern
    Mahern needs to realize Hudnut's line was so true. "You can't be a suburb of nothing". The city and the core has to be metropolitan. That means high rise residential projects. They add to the tax base. The city can then attract more high profile companies if the product "the city" is desirable. If you invest good things come down the road. Everyone has seen what the city has done since 85. The Maherns have to let progress happen.
  • Good Lord....
    .... and right on cue. I, for one, am HAPPY this project has finally gotten the green light and can't wait for construction to start!
  • Questions questions questions
    So what is the city getting for investing over 30% of the total cost of this project? Land lease? Parking garage ownership? Parking lease back? 1st secured mortgage on entire project? Clawbacks? Revenue sharing? Or..... Nothing but promises someone else will eventually pay some very small amount taxes?
  • Incompetent, Corrupt and Gross Dereliction of Stewerdship of Taxpayer $$$
    Why no ground lease? This Mayor and now this city council are the DUMBEST people alive! Once the announcement the the Jail is moving out with the orange jumpsuit posse the value of this real estate likly went to $15 mill. It is the closest undeveloped site to the circle. Anyone in RE knows the holdback there was the clientele of the CCB. Mayor Marine has NO money for basic city services like fixing and repaving roads like Stop 11 Rd from Bluff Road to Meridian Street ( 3 Schools traverse along that 3rd World Road). So another FINANCIAL DEFALCATION OF TAXPAYER ASSETS. Welcome to Indianapolis a Banana Republic.
    • Section 3 woes
      This project is a good thing for the city of Indianapolis. However the hiring of Marion County minorities is a mistake. Let me explain... The Section 3 requirement is to hire individuals that have little or no experience in the construction. The program only requires you to hire, not train the individual. With thus being stated you can put the hired individual pushing a broom at an off site location in your warehouse in lieu of actually teaching the individual a trade that would benefit them for a lifetime... Give a nan a fish and he will eat for a day, teach him how to fish and he will eat for a lifetime. I have had this requirement on projects before and the city requires that you "pay or play" meaning that you can contribute to a fund in lieu of hiring the section 3 candidate. This adds more burden to the contractor by having to hire an unskilled worker that poses a higher risk of accident, which increases the cost of the project or by having to pay to avoid hiring, both options increase the cost of the project. This is a high rise building that will require skilled labor and trained individuals not a 30 % hiring of unskilled workers that are not properly trained. A project of this size will have A tiered contractors that most likely will drug test. If you hire a Sec 3 worker and you have a drug test and criminal background check, you will be responsible to pay for these fee's which would be around $500. If the candidate fails you are still responsible for these fees. Then you have the safety training that skilled labor has, these Sec 3 workers are completely untrained and pose a huge risk factor. I am not.a general contractor looking for work, I was the owners rep for the projects that I worked on with Sec 3 and saw 1st had the issues that this program can create

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