Dolce hotel, YMCA part of city-funded 'North of South' development

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An upscale Dolce hotel and 75,000-square-foot YMCA are among the tenants slated for a $150 million mixed-use development being built on 10 acres of land Eli Lilly and Co. owns near its Indianapolis headquarters.

The development, details of which were announced at a Monday morning news conference, also include plans for 320 high-end apartments and 40,000 square feet of restaurant and retail space.

The city plans to fund the project by issuing bonds, using income generated by the development to pay off the costs, pending approval by the City-County Council. Indianapolis also plans to provide $9 million in tax-increment financing for sewer and street improvements. Council members are expected to vote on the financing by the end of the year.

“Traditional credit does not exist in this environment,” Mayor Greg Ballard said.

As IBJ reported in June, local developer Buckingham Cos. is leading the mixed-use project, dubbed North of South. It will be built on land that now houses a parking lot north of South Street between Delaware Street and Virginia Avenue. Construction should begin by the end of the year and be finished within two years.

The 148-room Dolce hotel and conference center will provide a nearby lodging option for international business travelers visiting Lilly, Ballard said, while the YMCA will serve employees as well as downtown residents.

“This provides a critical point of connection between the downtown and the facilities of the near-south side,” said Ballard, referring to Lilly, WellPoint Inc. and Indiana Farm Bureau. “I’m looking forward to getting this thing done.”

Lilly will continue to own the land and the state's Indiana Economic Development Corp. also is involved, making the project a public-private partnership.

New Jersey-based Dolce has 27 hotels worldwide and boasts on its website that it has hosted 30,000 events and 4 million clients. The location of the planned hotel and the partners involved made the project attractive to Dolce, CEO Steven Rudnitsky said.

“It’s all about location and our business partners,” he said. “We have a lot of corporate clients.”

Meanwhile, the YMCA proposed for the project will complement rather than replace the existing downtown branch at the Athenaeum, which was damaged in August after a 30-ton crane fell on the roof of the building. A market study performed by the organization showed enough demand to support both facilities, YMCA President and CEO Eric Ellsworth said.

Ellsworth estimated the new branch could attract 10,000 members, far more than the 1,600 at the Anthenaeum. But he said members will have access to both facilities.

“It’s not unusual for there to be more than one downtown presence for a YMCA,” he said.

Buckingham, one of the largest apartment developer/owners in the Midwest, has branched out in Indianapolis with mixed-use properties. The company is developing several properties surrounding its headquarters in the restored Stokely Building along North Meridian Street, and is shepherding a $20.5 million redevelopment of a former YMCA branch near IUPUI.

The project is expected to create 2,200 temporary construction jobs and 200 permanent jobs. It also is anticipated to generate $1.7 million in annual revenue for the city.

“This will be a very important link for Lilly employees and people we plan to retain and recruit, to have access to a state-of-the-art fitness facility, hotel and apartments,” Lilly President and CEO John Lechleiter said.

Still, the project could prove challenging, as other developers who have tried ambitious mixed-use downtown projects can attest.

A proposal from Indianapolis-based Allen Commercial for a mix of hotels, condos and restaurants in a project called Penn Centre across from Conseco Fieldhouse remains in limbo, though Allen still controls the land it needs for the project. The story is the same for Ralston Square, a $60 million proposal by Urban Space Commercial for a parking lot north of South Street between Meridian and Pennsylvania streets.

On the other hand, Legends District SoDo is a definite no-go. A team led by broker Ryan Zickler had proposed a $480 million mix of hotels, a theater and retail space on 11 acres south of South Street. Zickler, who lost several hundred thousand dollars on the ill-fated deal, still owns the southeast corner of Meridian and South streets but is looking for a buyer.


  • market square and homeless
    Maybe the city should spend our money on the market square property. Or Maybe the city should build a shelter for some of these homeless people living underneath the bridges downtown. There's a homeless village right across the street from Lilly's that should be of concern to someone in the city administration. What we don't need is more restaurant space downtown unless one will be a soup kitchen for some of these street people.
  • Thank you IndyBroker
    The city does need equity and recourse! A little education for the public officials who are either voted in or appointed who have no idea what they are doing; the real market is having developers hold all fees in escrow and are seperating the entities from self dealing (developer, GC, subcontractors, etc..)

    This project should be on the back burner to bringing rail down from the near north and linkable suburbs. Make this a world class city, not a corporate hotel wasteland!

    Sorry Ballard and cronies, the tax payer trough is getting a little tougher to rob? Ey? Taxpayers should keep fighting because the next administration will attempt the same!!
  • do you trust the bond bank?
    It is rare for a city of Indianapolisâ?? size to have its own bond bank.â?¨â?¨An annual audit in 2008 by the accounting firm Katz Sapper & Miller slammed the bond bank for a â??lack of well-defined accounting policies and proceduresâ?? and a â??lack of training and expertise in the accounting department.â??â?¨â?¨The firm implored the bank to hire people with an â??appropriate levelâ?? of accounting experience and review its accounts more than just once a year.â?¨â?¨â??During our audit, we found an overall lack of review and reconciliation in many areas of the accounting and finance functions,â?? the firm wrote. â??We noted numerous instances where input was incomplete and journal entries and transfers between accounts were incorrect.â??â?¨
  • city needs equity
    Cities that embrace and facilitate innovative financing may want to consider being paid back with equity in the project. Since the city is clearly the lender of last resort, a portion of the project should be residual income to the taxpayers, not simply a return of principle. This concept should also be extended to the Colts, Pacers and other privately owned enterprises that seek tax payer funded bailouts. If the taxpayers are to support such ventures, they should be rewarded with equity stakes in the enterprises. Public Private partnerships should not mean that we privatize gains and make public the losses. This sort of financing begs for the taxpayers to receive skin in the game in exchange for the lost opportunity cost of not placing the funds in other areas of public need.
    • ACS Parking
      Will ACS run the Two parking garages with 800 spaces for the city?

      And why can't TIF funding be used to upgrade the city parking meters and build a Broad Ripple public parking garage?
    • Why???

      $86 Million - Indianapolis Bond Bank
      $15 Million - City of Indianapolis (Payment thru Eli Lilly?)
      $9 Million - City of Indianapolis (utility/sidewalk/roads)
      $15 Million - City of Indianapolis Lease of Eli Lilly Parking Lot
      $6 Million - State of Indiana through a Community Development Block Grant
      $18 Million - YMCA
      $7 Million - Buckingham Companies
      None - Dolce Hotels and Resorts
      None - Wellpoint
      None - Indiana Farm Bureau
      $156 Million Total Project

      84% Government Funding - $131 Million
      16% Private Funding - $25 Millionâ?¨
      Why does the City owe Lilly $15 Million from a project done at Lilly's technology center campus off Kentucky Avenue in the 1990s???

      Why doesnâ??t Eli Lilly owe the city and state $214 Million for not meeting its pledge 10 years ago to create 7,500 jobs and invest $1 Billion in our city?

      Why build a government funded hotel when the new JW Marriott, area hotels, and new convention center are leased out less than 50% of the year?


      Eli Lilly Gets Indianapolis Incentives of $214 Million for $1 Billion, 7,500-Job Deal

      Eli Lilly To Layoff 5,500 Workers Mostly in Indiana


      Indianapolis Star 9/28/10

    • Relay this to Mr. Mayor Gobble Gobble
      Can you please relay this to the Mayor and his henchmen; I think the citizens, who will be financing this project, should be able to hire an owner's representative to bid out all the projects and hire the firms who work on this. I have a funny feeling Buckingham LLC for all trades will reap tidy fees and profits from OUR TAXPAYER FINANCING that is apparently being approved by a man and council with absolutely NO EXPERIENCE in running a business, lending money, etc. This is why no BANK will lend on this! BONEHEADS with NO EXPERIENCE worked for banks, lending money to friends and cronies with 1st GRADE LEVEL ANALYSIS. BRAD CHAMBERS will reap ridiculous profit even if the project sits empty; what is our recourse? Can the City take his Library Square or other collateral??? Plese Answer those questions IBJ (BUSINESS) or are you just a puff peice?
      Last time I checked Lilly was a Publicly Traded Company... Lets see they lay off 5,000, empty out the Faris building? Could that building be redeveloped into apartments? Perhaps all the people Lilly have layed off they can provide housing to.

      Should I call the police... I think someone at City Hall has taken my wallet. Why Buckingham? Who is the General Contractor? Just which lenders turned down the project? Show us the names of the lenders? Doubt there are any. Geez, perhaps if Mayor Marine could just focuse on the not so sexy task of running City Operations he might actually see where the attention needs to be placed. There is plenty of high end housing that is vacant in town.

      Can I just get the freakin pot holes in my neighborhood repaired. You know just some asphalt topping. Nothing out of the ordinary.

      This is like a Soviet State where the Mayor chooses the Winners and Losers.

      Again obviously cost information has been put together. IBJ please tell us the REAL story... What GC is involved, What engineering FIRM, What PR firm?

      Whats the Name again of the development North by South or South by North... Pretty innovative name?

      I am will vote for anyone but Ballard.

      • Beautiful!
        Absolutely thrilled about this project! The South-side of downtown has been a veritable wasteland for so many years.... This deal with the city is EXACTLY what is needed if ANYTHING else is ever going to become of that area in the near future..... can't wait to start seeing the progress of this project!
      • Plan, yes. Financing, no.
        Love the idea. Hate the financing. Enough said.
      • Another dream, another grab for cash
        A mixed-use commercial development that no one in the banking or private equity market would fund is financed through municipal bonds issued by the City of Indianapolis? Lilly still owns the land? Both the IEDC and city provide tax incentives, back to whom? -- the principal financing body of the City? Lechleiter talks about "...a very important link for Lilly employees and people we plan to retain and recruit..." as the shareholders are screaming about their share price and the corporation reaction is to downsize locally and outsource? What cabal is smoking what in the hallowed halls of the 25th floor at the City-County Building? Another group of wannabe influencers with the business planning acumen of the CIB. Another, yet-to-be-named municipal corporation with hat-in-hand scrounging for money from the donut counties in a few years to cover the missing bond payments that vacant floor space doesn't generate? "Say it ain't so, Joe," Then again, maybe Indy deserves the business pseudo-leadership viewed as visionaries.
      • Amen Dude!
        This is 10000% better than what's currently there! And the project while not perfect is damn near it.
      • sigh
        Mr. Payup,

        Let me get this straight: A few homeless people downtown should dictate where we develop?

        Regarding train noise, have you never been to another city? Train noise is part of the deal. (City noise in general is part of the deal. It's called LIFE.) Do you slam every apartment complex built next to a highway in the suburbs? They're pretty loud too if you hadn't noticed.

        Why don't you support this project as a way to bring life to an area that needs some light shed on it? The impound lot stands a chance of changing if we invest in the area around it. (By the way, if you didn't see the renderings, the impound lot has been marked for future development.)
        • Private Secotor
          For those of you writing to praise this deal as a great idea, did you stop to think why the private sector backed out of funding it? It's because they don't believe it will make money;. So we're supposed to believe our government officials know more about turning a profit than the public sector.

          This will be nothing more than a major boondogle.
        • Will Finance for Favors
          â??Traditional credit does not exist in this environment,â?? Mayor Greg Ballard said.

          And evidently, neither does traditional brains.
          Oh my goodness open your eyes---Lilly is going to be bought out by someone (Glaxo?), this is preparation for the empty buildings.
        • Movin' on up
          The train that comes rumbling through the north side of that lot will provide great 'ambiance' for the high end gin swillers of the hotel. Don't forget Gummy looking to score under the rail bridge and the line of peaple waiting to get their cars out of hock across the street at the impound lot. Mixed use is an accurate description for that area.
        • No Jim
          Sorry Jim-Your little conspiracy is wrong. This will be a great catalyst for the area. Just wait until the train rolls into Union Station with hundreds of passengers each day. Lilly has not stuffed GOP coffers. One Bart Peterson is an executive at Lilly now. This is a win win for everyone. I look forward to this project!
        • TheGOP Circle
          I am sure Lily has paid big bucks into the political purses of the GOP and now is the payback. It is a win/win situation. The city will not be able to afford the bond payments, will need to shut down some essential services, then Ballard can sell off more assets to his cronie friends at the taxpayer's expense, and the circle begins again.
          • Infrastructure for Everyone
            Wouldn't TIF funds be better utilized if the were used for providing the 10% local match required to get federal funding for a new light rail system from the airport to downtown multimodal hub or upgrading parking meters and building a Broad Ripple public parking garage? Seems ALL downtown businesses and taxpayers would get a larger benefit.
          • bonds? really?
            Let me begin by saying that I like the idea of this development. This project will be funded with public bonds, but the city won't look at the same idea to fund up-front parking meter improvements? They would rather sign a 50 year deal to outsource parking that greatly diminishes the city's ability to plan for the future. Also, this article says there is an anticipated "$1.7 million in revenue" annually for the city: if Indy doubled hourly parking rates (to $1.50) and are currently posting a $750K profit, wouldn't that feasibly double revenue to $1.5 million annually? Why use bonds to finance one project but not the other, although both have comparable revenue streams for the city?

          • Off the deep end
            Another far from stellar idea from the Mayor's office - obviously finalized with some Martini's or Sake during a Colts pre-season game. There's probably a few better projects to tie up the City's Bonding rating on. Oh yeah, maybe the Indianapolis Bond "Bank" is running the show - not the Mayor.
          • Absolutely not
            Indianapolis has no business financing this project, which is, essentially, the development by Lilly of one of its parking lots. They don't need my tax dollars to guarantee the bonds. Go to the bank. And if you can't finance it privately, go away. Because these are perilous economic times, and Indianapolis taxpayers are not in the business of making risky commercial financing. Go to a bank. Leave the city out of it. I will plainly tell my member of the city county council to vote no.
          • No Private Investment?
            I bet the JW Mariott folks are pissed!
          • Sweet!
            I'm super-excited about this! The plans look great. Buckingham knows how to do urban development. I'm looking forward to using the new YMCA!

            Can we get some hi-res renderings please? :-) The images at the press conference revealed quite a bit about their plans.

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          1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

          2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

          3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

          4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

          5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.