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Insurance agency revives plans for downtown building

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A local insurance company is reviving three-year-old plans to build a headquarters building downtown.

An affiliate of McGowan Insurance Group Inc. will seek Regional Center Approval April 28 to proceed with construction of a $2.75 million, 19,000-square-foot building at 355 Indiana Avenue. The two-story, brick veneer-clad structure will contain some space for lease, said Hugh M. McGowan, the firm’s president.

BuildingMcGowan Insurance would receive a tax abatement in return for building the $2.75-million headquarters.

The firm plans to move from 8,800 square feet it leases at Market Tower, 10 W. Market St.

McGowan said a variety of factors caused the firm to hold off on the plan, which was announced in August 2008. Predictably, one of those factors was the deteriorating economy. But the same economic downturn is partially responsible for the plan’s revival.

“Because not a lot of people are doing this type of project now, it makes it a good time,” McGowan said, noting that the players involved are hungrier for work and therefore more willing to negotiate favorable terms.

McGowan Insurance is working with Chase Bank on financing and plans to use a Small Business Administration loan. Curran Architecture of Noblesville designed the building and locally based Buckingham Construction has been hired to build it. There’s still a slim chance the insurance agency could decide not to pursue the project, but McGowan expects it to proceed. The project timeline calls for construction to begin next month and wrap up by next February.

The city granted the company a six-year property tax abatement for the project in exchange for promising to add jobs. The abatement, awarded in 2008, goes into effect once the property is improved. McGowan said his firm has 33 employees and plans to add 10 in the next few years.

A city property tax abatement document from 2008 estimated the company would save almost $186,000 over the period of the abatement and pay about $131,000 in property taxes during that period. It estimated an annual property tax payment of almost $53,000 once the abatement expires.   

McGowan said a proposed accounting-rules change that would have commercial tenants record lease payments as a liability was not a factor in the decision to move forward with the project.

He said the independent insurance agency believes staying downtown is best for its employees, who live all over the city. “Downtown is convenient for everyone,” he said.

Adding to the convenience, the new headquarters will come with a 48-space, on-site parking lot. McGowan’s parking will front Indiana Avenue to the south of the building and Capitol Avenue east of the building with entrances on both Indiana and Capitol. The plans call for screening the parking with landscaping.

The city’s recently adopted urban design guidelines discourage surface parking in the city’s core but don’t prohibit it. The regional center plan, which sets out what uses are preferable for specific sites, recommends high-density, mixed-use development for the McGowan site.

Jeffrey York, a senior planner with the city’s Department of Metropolitan Development, declined to comment on McGowan’s plans because they are still being reviewed.

The building site is on a triangular block bounded by Capitol, Indiana and Vermont street. McGowan bought the property in 2008 from Hearthview, a residential developer, which had purchased it from the state. The block is mostly surface parking, some of which is unpaved. The Vermont Street side is lined with a chain-link fence with barbed wire.

Brian Mader, an architect with ArcDesign and past president of the local chapter of the American Institute of Architects, said the low-density nature of the project and the surface parking make it less than optimal for the site. But Mader said the McGowan building would represent a significant improvement considering how the site looks today.
 

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  • Seriously?
    The best that can be said about this project is that it was designed by someone who knows how to draw rectangles. And the use of tan and brick--majestic.

    A site in such a great location--just a couple blocks from the capital building, the canal, IUPUI, Monument Circle, and the rest of the CBD--is going to have that toad of a structure squatting on it? Really? I guess it fits in with the architecture of the nearby Residence Inn [said with a rueful sigh and certainly not as a compliment]. I disagree with Mr. Mader from the article: this is NOT a significant improvement on the surface lot/chain link fence now there. At least with a surface lot there is always hope--hope that one day the site will be adorned with a building recognized as an asset to the city. Instead, hope is now lost and we have to live and work next to this toad for the rest of our lives.

    What is really disappointing is that this project--like any project around here--reflects the value of downtown property and the values of the Indianapolis community. Walmart doesn't sell watches made by Rolex or Chanel, or Seiko for that matter. What is there is what the clientele will buy. If this is the best we can do here, the best we can attract, the best we demand, well . . . that is a shame.
  • More office space
    That is an interesting question. Why would the City grant a tax abatement to someone building unneeded office space in a market with high vacancy rates? What effect does this have on existing office buildings downtown? I'm not going so far as to say that the City should implement a moratorium on office development, but I don't see the reason for an abatement. It seems to be an example of the old adage that "any development is good development."
  • Just what downtown needs
    Perfect! Just what downtown needs now -- at a time when existing property owners are sucking wind and still getting hammered on property taxes, a new building that adds additional inventory will be constructed and the owners will get a tax abatement for a promise of 10 more jobs. The abatement should not be awarded at all. The owner who builds in this environment, with the present glut of inventory in the market, should have to pay the price in taxes like everyone else. If deals like this keep up, every older building in the CDB will become empty and the skyline will need a real makeover when Class B buildings crumble.
  • musician
    The musician repair building is adjacent to the McGowan property but not affected by this plan.
  • parking
    The site plan indicates the building will come up to the sidewalk on Indiana, but the building would not occupy all of the Indiana Avenue frontage. Some of the Indiana frontage would be screened parking. There would also be screened parking touching Capitol.
  • say what?!?!
    did I hear correctly that the parking will fron the roads and the building will be set back, plus the site will be screened by vegetation? That is a terrible design for such an urban site. 2 apartment complezes are going up much further north on Indiana Ave and these both front the street with zero or close to zero lot line. I prefer they stay in Market tower.
    • On the block
      I believe there is a store there called Musician's Repair? It is staying, right?

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