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Carmel City Center gaining momentum

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CARMEL—Thirteen years after Mayor Jim Brainard first described his vision for a new downtown along Range Line Road, Carmel City Center is starting to look like a city.

The crown jewels of Brainard’s vision—the $118 million Center for the Performing Arts and a $200 million high-rise development along City Center Drive between Range Line Road and the Monon Trail—finally are taking shape.

The first phase of the high-rise, downtown portion of City Center is on schedule to open this summer, complete with apartments, condos, retail shops and office space. And the developer, locally based Pedcor Cos., is working on financing for the next three phases, which would add a hotel and more retail, office and residential space.

Meantime, a marketing campaign introducing the 1,600-seat Palladium at the Center for the Performing Arts is under way, with a grand opening set for January.

Getting the project this far hasn’t been easy. Challenges range from court battles to control the properties that would become the Monon Trail to questions from city councilors about whether the Carmel Redevelopment Commission and Brainard are jeopardizing the city’s future—and risking crippling tax hikes—by borrowing millions to enact the vision.

“I would love to wave a wand and see it all done,” Brainard said. “That’s why we have sprawl in this country—it’s much harder to do redevelopment. But over time taxpayers will pay a much higher price to maintain infrastructure than those who redevelop their urban cores.”

Growing price tag

A few years after Brainard took office in 1996, the city borrowed $13 million to buy 88 acres including farmland and a former grocery store with plans for a bustling mix of offices, homes, retail stores and performing arts venues.

As proposed at the time, City Center was a $77 million project. The price tag today: at least $500 million, and growing.

The City Center plans are part of a larger, master-planned effort to redevelop downtown Carmel, including a new Midtown and the Carmel Arts & Design District to the north. The Civic Plaza, complete with City Hall, fire station and police headquarters—built in the 1980s—sits immediately to the south.

Leasing activity for the first phase of the Pedcor portion has “increased dramatically” in the last few months—an encouraging change from last year—as weather improved, credit markets thawed, and the massive project began taking shape, said Bruce A. Cordingley, president and CEO of Pedcor Cos.

The company has taken reservations for roughly one-third of the 64,000 square feet of retail space, is talking to a professional services firm interested in the entire 18,000 square feet of office space, and has sold four of the 15 condo units ranging from about 1,000 square feet to a 3,500-square-foot penthouse.

The first residents and tenants will move in later this summer. Meantime, Pedcor is zeroing in on financing for a second phase with more retail and residential space, and is negotiating with a developer interested in opening a 120- to 140-room boutique hotel along City Center Drive.

Pedcor is investing more than $200 million in its portion of the project. The city has pledged real estate taxes on the project to pay for its infrastructure.

Carmel City Center“The fact people are calling us now is a lot different than the last 12 to 15 months,” said Cordingley. “It’s coming together well. What used to be a farm and an abandoned grocery store is really stunning. I think it’s something we can all be proud of.”

Financing concerns

The Carmel City Council is generally supportive of the plans but is pushing for a more complete financial picture of the Carmel Redevelopment Commission after the independent group last year asked the council to float a $28 million bond.

The council balked at the terms, which would have had taxpayers shelling out a total of $91 million over time to pay back the loan. The council asked for a more traditional financing arrangement, but the commission said it found another way to come up with the money. That raised concerns among City Council members.

“We had no desire to get into their business until they asked for taxpayer dollars,” said Luci Snyder, a council member and commercial real estate broker for Acorn Group. “Now we want to make sure if they default, we don’t have to pick up the bill. We’re trying to ascertain how much they have borrowed, what the debt-coverage ratio is, and how it impacts the city’s rating.”

From meeting to meeting, financial projections change. And the council still is getting confusing and conflicting answers to its questions, said Rick Sharp, council president. The worst-case scenario involves a tax increase to make up the difference—a luxury businesses don’t enjoy.

“Those of us in the business world have to deal with the revenues available to us because we can fail,” Sharp said. We cannot allow ourselves to be content with assurances that everything’s all right and nothing’s going to happen.”

Long wait

The wait for City Center has been long and maddening, particularly for Brian Shapiro, who owns Shapiro’s Delicatessen, the first tenant to open at City Center. His 11,500-square-foot restaurant, which opened in 2001, sits next to a giant dirt pile from Pedcor’s construction.

“Lucas Oil Stadium and Indianapolis International Airport started after the Pedcor project and they are open and ready to go,” Shapiro said. “But you know, who could predict the economy? They need to recheck the master plan on what makes sense in this economy, even as we rebound.”

Shapiro thinks the city will have to cut back on future phases, but he’s confident Carmel can finish the project without bankrupting itself. After all, a tax-increment district that funds the project’s infrastructure is stocked with relatively new commercial buildings.

“Bottom line is, Carmel has to increase density of residential units in its core area and has to generate some tourism and smaller convention business,” Shapiro said. “I’m fully invested in it occurring.”

The first of the City Center projects was a 350-unit apartment development in 2001. Condos and townhouses and an upscale office development surrounding a reflecting pool were added in the following years, with another office building still to come.

The population of City Center is about 600 today, Brainard said, but will be at least 1,500 once the project is complete.

“This is truly going to be a national model for creating a downtown in a suburban city,” Brainard said.

But hurdles remain.

“I think City Center is a wonderful thing,” Snyder said. “I hope that all of the money is there to complete it as envisioned.”

“Now is a good time to be more fiscally prudent,” she said. “We’ve never been in a situation like this before.”•

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  • rookies
    Construction is taking so long because developers are using ineffecient and rookie construction companies that do not know how to navigate projects like these. Every corner they go around these rookie contracrors don't have the brainpower to make a decision so they have to ask the architects who don't have the answers either.
  • I like it
    Well, even though this comment is a bit late to the article, with all the negativity in the comments section I thought I would jot down a little note here. I for one commend Carmel and the developers for trying to create a nice condo community within walking distance of various amenities. I haven't visited this location in person, but it certainly sounds like a nice project on the face of it. Reminds me of Kirkwood, MO to an extent which is a lovely suburb I highly recommend. As a young professional, if I were moving to metro Indy this is exactly the sort of location I would want to live in.
  • Contrived
    I once lived in Indy but now live in Boston. I hav a brother and a sister who live in Carmel. Carmel is a joke. The arts district and city center feel soooo contrived its silly. How do we know it is the arts district... because they put up a sign that says so! I can go on about what an abomination the town is, but instead I will just say you are in for a rude awakening when your property taxes go up and you cant sell your house.
  • Why why why...
    I grew up in Indiana, just north of Carmel. I now live in Colorado where I'm a city planner for Aspen. I was talking to some friends recently and they mentioned this project. I anxiously got online to try and see what the extent of what this project included. I was shocked with what I saw.

    This is EXACTLY what Indiana doesn't need. The reason that Indianapolis is so embarrassing and "depressing" is because there is no longer any commitment to the city itself (aside from a horrible glass monster of hotel and a new stadium). This project will only make Indy less exciting and less pleasant to visit. If there has ever been an easy reference for urban sprawl, it has been Indianapolis, IN.

    Carmel is just a good excuse for the upper-class to get out of the city and have a backyard. I really don't blame them for wanting to get out of Indy, because the city has not moved on the potential to make livable places near the city core (aside from Fall Creek). Carmel City Center is another gas-guzzling excuse to create an interesting, "new urbanist," downtown environment. Where is the rail line? Where are the bus stops? Why does the entire "street level" consist of parking? Indiana is embarrassing. Catch up to the times people. I guess if it fails, Disney may have interest in created an amusement park. It looks like one now.

  • hilarious-- response
    Josh, you hit the nail on the head!! Hillarious, yes, I can see Donald Duck and Mickey Mouse walking around Carmel. The place is starting to look like "Toonville" in Disneyland! Well, it worked for Disney, maybe it will attract income for Carmel.
  • Carmel City Center
    If you build it, "they will come" and they are. Look at all the new business in Carmel. Customers need a place to stay and be entertained. Companies need to attract employees and it is the quality of life that attracts those to our community. The mayor has been a master to execute such a comprehensive and cohesive plan. We live in a community were 47% make over $100,000 per year and we finally have a downtown, great dining, an active Monon and most improved traffic flow. Carmel is a great place to live and it is only getting better.
  • lovely
    Downtown carmel is lovely, perhaps if other areas followed suit Indianapolis would not keep popping up on forbes and others "most depressing cities" lists. Not to mention the little things like being able to walk down a sidewalk without stepping on glass... or drive down the road without blowing a tire...or go to the gas station without fear of being assulted. Say what you will, but Mayor Brainard has created a wonderful place to live.
  • Hilarious
    Carmel just gets more and more hilarious. Look at that building! All you need is Mickey Mouse and Donald Duck walking around and the vision will be complete.

    Let's throw a Mansard roof here, then a venitian facade over there, then some statues of old men sitting around over there and let's top it all off with tons of rich people.
    • Indy Transit
      Daisydog, pleaes tell how anyone can get around Indianapolis without a car? Do you think mass transit will happen any time soon in Indy?

      Just an FYI, Carmel is nearly built out and the amount of disposal income in a 3 mile radius of the City Center is unbelievable. As the Urbanophile says, we need a successful Indy as much as Indy needs successful burbs if we are to be competitive in a global economy. If you have an open mind you will find Carmel is building the type of projects in its core that Indy could take a few lessons from.
    • You got it right, Joe
      Joe's hit the nail on the head, so to speak. Look at the growth rate past and predicted for the next 5-10 years. These projects are not sustainable with the numbers. Build on the existing infr-structure and stop spreading out from the core, relying more and more on the car.
      • Enough!
        This is yet another insane step in development all across central indiana. It is a well known fact that surrounding suburbs are only as good as the central core of the city. The entire indianapolis metro region hasn't grown all that much and yet carmel and hendricks county are creating all these huge developments. we are not growing up, we are growing out. If this oattern continues we will have divided our resources so much that none of us can afford this lifestyle anymore! All i ask is that we look into smarter growth. growth that encourages these developments, but in already developed areas. I rode my bike along the greenway and saw this monster and it scared me. It is completely out of context.
      • Forever and Ever
        Why is construction taking so long? As mentioned in the article, Lucas Oil Stadium and the new airport were started after the "Downtown" construction started. Those huge projects have been completed for quite some time. This is just crazy. But then again, Carmel is always in a state of construction.

        It will be interesting to see how these projects finally pan out. I have to wonder if there is a real demand for all of this.
        • Raising the Bar
          There is no doubt Carmel has raised the bar. At the same time there is no accident that Carmel taxes remain low and all projections are for them to remain so for decades ahead.

          Thanks for the visit Cory. We look forward to your following up on the Lofts and Shops on Main Street. They are well underway.
        • The city center in all its glory
          It is all at the cost of the Carmel taxpayer--like it or not.

          Why do they keep voting this man into office? All I hear from the man of the street is complaint-yet when election time rolls around, there he is again.

          The new Palladium reminds me of a big Turkish Mosque. This is very unique for Carmel.

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