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Investor Buffett gets behind east-side revitalization project

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Billionaire investor Warren Buffett visited Indianapolis on Wednesday and explained why he agreed to help finance part of the revitalization project on the city’s east side.

Buffett’s remarks Wednesday morning came as city leaders and investors in the project gathered for a ribbon-cutting ceremony at the East Village at Avondale apartment project. It’s part of a larger development aimed at revitalizing a blighted neighborhood on East 38th Street where the crime-ridden Meadows complex once stood.
 

Warren Buffett 15 colWarren Buffett, center, cuts the ribbon at a mixed-income apartment community in Indianapolis. (IBJ Photo/ Perry Reichanadter)

“We’re working together to change the lives of the thousands of people who have gotten the short straws in life,” Buffett said, “and give them the same chance that my kids have had.”

East Village at Avondale is a $27 million project with eight layers of financing, including an investment from Atlanta-based Purpose Built Communities, co-founded by Buffett.

The developer of the project is a joint venture of Chicago-based Strategic Capital Partners, Mishawaka-based The Sterling Group, Meadows Community Foundation, Purpose Built Communities and the city of Indianapolis.

Strategic Capital Partners received $19 million in tax credits that were sold to Chicago-based National Equity Fund to help finance construction of the 248-unit apartment complex. It is being built on about 15 acres of land that Strategic Capital put under contract in 2010.

The city of Indianapolis also kicked in $5 million in tax credits.

“This is an incredible project with the ultimate goal of bringing this neighborhood back full circle,” Mayor Greg Ballard said.

Fifty-four units of the project are pre-leased and will be occupied next month. Seventy percent of the units will be leased at affordable market rates and the balance will be leased at market rates.

East Village at Avondale is the first phase of a larger, $150 million development that is to include additional housing—both apartments and single-family—and retail development fronting 38th Street.

Luring a supermarket to the area is vital to the development’s success, said Gene Zink, CEO of Strategic Capital Partners, noting the nearest grocery store is 3-1/2 miles away.

“You can’t just fix one thing, or the bad would come back,” Zink said. “You have to fix it all.”  

Planning also is under way for a community center to serve the neighborhood. Some of the land might be set aside for recreational fields to serve the community and nearby schools.

Some of the land for the development was purchased from a Pentecostal church that previously tried to spur development in the area. The balance is land the city transferred to the Meadows foundation. The development group is leasing the land from the foundation in a long-term lease that will provide the foundation with an income stream it can devote to its mission of improving the surrounding neighborhood.

Purpose Built Communities was founded in 2009 by Atlanta real estate developer Tom Cousin, who enlisted Buffett for help. 

In addition to Indianapolis, the group is tackling developments in three cities in Georgia; Birmingham, Ala.; New Orleans; Galveston, Texas; Omaha, Neb.; and Charlotte, N.C.

 

Buffett vowed to return to Indianapolis when East Village at Avondale is fully occupied.

“It’s going to be another successful example that we can show other cities,” he said of the project. “I’m joining a successful model and successful people. In business, that’s what I look for. And then I just sit back and cut ribbons.”

 

 


 

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  • Facts
    These Are The Facts: There is an N-F-P foundation in place that will continue to exist once all the development is done in his neighborhood. Anyone who wants to live in the new apt. complex must go through a very rigorous app. process and must: 1) have an income, 2) have excellent rental and credit history and 3) cannot have a felony record. The apt. complex will be managed by a private company, not the City. The educational opps. include: 1) 2 existing top-ranked charter schools providing K-12. 2) Early childhood learning in the proposed health/wellness center for ages 3/4. 3) The Excel Center sponsored by Goodwill will open in Nov. - ages 16-29 who dropped out of h.s. and want to obtain their h.s. diploma (not GED). 1,000 on the waiting list. The proforma shows that there is no money to be made on this revitalization effort. It is something that needs to be done in cities across the U.S. and a group of people, including Warren Buffett and others, instead of sitting on their **** and complaining about the sad state of affairs in this country, have come together to make a difference. My question for you is: Will you be one of the complainers or will you join us in making a difference? Answer wisely because your answer to this question will reveal your true character.
  • Been poor without handouts
    Gosh how is it when I was young (in early 80's) I was able to make it on $8k to $10k a year without handouts? Maybe that's because I did not saddle society with babies I could not afford.
  • Ignorant
    Once again, the people hopping on here to spew their negative drivel show themselves to be woefully unread, uninformed, ignorant and prejudiced.

    READ the article. NO ONE living in those apartments will be living there for FREE. Call the apartment complex number (317-660-2982)and LISTEN to the message about the application process. There are income guidelines. You MUST have an income of $20,340.00 MINIMUM. EVERY working person, in ALL income brackets DESERVE (yes, I said DESERVE) access to safe, clean, AFFORDABLE housing. That includes the cashier at Walgreens, the waitress at Applebee's, the attendant and nursing assistant at the hospital, the parking lot attendants at Circle Center Mall or any other unsung job that may make YOUR life a little more convenient or efficient. Before you open your mouth, or put your hands on a keyboard, GET A CLUE!

    And besides, NONE OF THESE INVESTORS (and that includes the city) are giving ANYTHING away. They are in it to make $$$. That's the bottom line.

    • Meadows II
      The new "project" will end up just like the original did, crime ridden. What a complete waste of money and space.
    • crock
      indianapolis there is so much crock in you'r pot you'r going to be needing a biger pot
    • angry hobbit
      Buffett makes no money on this one. Again and again, the angry person comes out and complains.
    • Buffett makes more money from tax payers.

      Who, outside government, believes a person who has made billions in investments really cares about low income housing?

      Lets see...248 apartments that cost 27 million for LOW INCOME...each apartment cost $109,000!!!! But your tax dollars paid $19 million and gave another $5 in tax breaks. In theory, the low income will live with middle income....don't we all want to live with those on public funds and pay the full apartment costs to live next to a person paying nothing. And, profits go to private business owners who got a tax cut.

      These people have no brains....but they have my tax money to give away. Has the city ever run a successful public housing apartment project?????

      We need some responsible government.

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