Leaders of Eli Lilly & Co. and Buckingham Cos. joined
the mayor Monday to announce new details of a development proposal dubbed North of South that would include a boutique hotel,
YMCA branch, retail space and upscale apartments, all on 10 acres north of South Street between Delaware Street and Virginia
Avenue. The city has agreed to finance the vast majority of
the project, more than $100 million of the $150 million total, using a couple of sources including a public loan backed by
TIF revenues. It certainly looks like a great project and a great deal for Buckingham, which would contribute about $7 million.
Property Lines is always happy to report new development projects with a strong shot at success. (Particularly when accompanied
by fancy renderings.) But there are lingering questions with this one. Other developers
who have tried similarly ambitious projects in the area won't be thrilled with Buckingham's generous taxpayer assist.
Allen Commercial has been trying for years to build a mixed-use project dubbed Penn Centre on the surface parking lots to
the west of Conseco Fieldhouse, without demanding public money to make it happen. Urban Space had proposed a residential and
retail project called Ralston Square for a surface lot north of South Street between Meridian and Pennsylvania streets. And
broker Ryan Zickler unsuccessfully sought city help in building a $480 million mixed-use development called Legends District
SoDo just a block away from the proposed North of South. A publicly financed competitor could hurt the other projects'
chances of landing private financing. Another question is whether the project will lead to another delay in redevelopment
of the Market Square Arena site. At the press conference, Mayor Ballard called the project "innovative." Indeed.
Any of the earlier proposals could have been innovative, too, had they enjoyed the support of an $86 million taxpayer-backed
loan. Is it not a bit ironic that the mayor wants taxpayers to effectively invest in a boutique hotel, retail space and a
YMCA branch on 10 acres downtown while selling the entire city's parking meters to a private firm? I guess we'll have
to wait at least a few more years for public investments in stadiums and convention amenities to pay off with a large and
privately financed downtown development. Meantime, stay tuned for more details once the deal is finalized.
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Welcome to Property Lines, Indy's source for neighborhood real estate news. Your host is Scott Olson, IBJ's real estate beat
reporter. Edited by Cory Schouten.
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See, I told u Indyman and Dipsicle....this 8 days is overkill. It's barely worth a weekend....great job Tony George! Your dream has been fulfilled....he fans want the I r l back. Thats how good it was.....and that sucked.
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I have been in training for a short time now but right off I can see that safety and quality are the number one issues, my experience as of late has been a positive one, the employees along with Jeff the plant manager and the operation supervisor as well as the engineers are a highly motivated group of people, what an asset for the area to have and for company's in need of a quality metal products.
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Pimlico
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While I understand the severity of their actions as well as everyones eagerness to hold them responsible for thier lost funds, these gentlemen did know how to make money. Dispite thier poor decisions over the ownership of Fair they had made several wise investments which paid them greatly. This proves they do have the potential to rebuild so they can repay. I do not feel they should live the life of luxuary but given an opportunity could they find ways of repaying the debts? They are doing nothing now but being a burden on tax payers. Just a thought!!!!!
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You guys have some "interesting" comments to say the least. I hope you will call in and share those opinions starting June 1. I'm looking forward to having you on the air.
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Because Indianapolis needs temporary construction and low paying service jobs?
I could see this if we were talking about attracting the headquarters of ImClone which Eli Lilly bought for $6.5 Billion in 2008.(they have a New York HQ)
I could see this if we were talking about attracting the headquarters of Mead Johnson to Indy (They recently moved from Evansville IN to Chicago).
I could see this if we were talking about attracting the headquarters of Sallie Mae. (They recently moved from their HQ from Virginia to Delaware)
I could see this if we were talking about attracting back the headquarters or major operations of Lincoln National, Ball Corp, Gannett(Indy Star), Duke Energy (Cinergy), AES (Indianapolis Power & Light), AT&T (Ameritech), Chase (Bank One), PNC (National City),etc............
But another hotel?????????
Cory - good to meet you last week.
Please note Gary Dick has decided not to be on camera with this dope.
http://www.insideindianabusiness.com/newsitem.asp?ID=43868
There is no way the City should be doing this. It's outrageous that the Ballard adminstration even proposed wasting taxpayer money in such a risky venture.
Those developments were primarily focused on smaller combinations of components, such as hotels + entertainment, or retail + residential.
North of South is different, and wins the city's investment, because it combines all the elements those projects offered into one cohesive package with a higher purpose: It supports and enhances the capabilities of Lilly, Wellpoint, and Anthem. It creates important connections between each of them and the city center. In all actuality, it better connects downtown and that business district to the entire southeast side. This, in addition to the beautification, infrastructure and quality of life improvements, is what makes this a great proposal. This is not just another hotel, or set of condos.
The city made a wise decision and waited for the right opportunity and chose the right developer to partner with. If the city handed out money to every project mentioned here, then the critics of government investment might have a point. But they are not acting carelessly and the city chose North of South as a project worth investing in. I agree with their decision.
This development will help lead to an economic environment in Indy that will enable other developments to acquire private funding, not the other way around.
This project makes some sense in that Lilly is backing it with I am sure the promise of filling the hotel and providing workers, along with Anthem and Farm Bureau, to use its facilties, shop at its stores etc....
As far as corporate hq's, this is probably more about keeping corporate hq's here then attracting new ones, but Lilly's has said that this will aid them in attracting high dollar talent.
I have a relative who works for Lilly who came back after an overseas assignment. Wanted to live downtown in close proximity to Lilly. Best he could do was an apartment on the canal. distance and poor mass transit made it impossible to walk to work and ammenities, so he moved to burb's.
He said he would have moved into an apartment in this development if it were available. I think this will be a catalyst for development in the southeast quad with the final linkage between downtown and fountain square.
Maybe this could be the kind of development that leads by example and other will spring up like it around DT Indy once the recession's tight wallet syndrome loosens.
1. The private market isn't loaning much money to anyone right now. It has nothing to do with the merits of the project. The city is in the position to make a wise business investment and is doing so.
2. The private market and the city will determine what constitutes a successful business development using different critieria:
By definition, the "private market" is primarily interested in high-dollar, personal-gain profit margins, nothing else. It's not about helping the city or other businesses, it's about making big money for the investors.
The city, on the other hand, is concerned about the well-being of entire region. It can operate out of an entirely different investment paradigm. It has the privilege of being concerned only with getting investment dollars returned. "Profit" is measured differently. The city is in the city-strengthening business, not the high-profit business. Project benefits such as quality of life improvements, an expanded tax base, better infrastructure, and a strengthened business environment all add to the "profit margin" of any project they'll consider supporting. North of South is chock-full of profit for the city. It will pay off in more ways than just dollar signs.
Buckingham understands proper urban-context design. Here's hoping they stick closely to the conceptual drawings. (and here's hoping they get to develop the sea of parking lots in the northwest quad!) From what I can see via the renderings, I support the project's design 100% as well.
I would think Eli Lillyseould owe taxpayers money, not vice versa.
Some of the story's comparisons to other failed schemes don't ring true, due to Buckingham's reputation and track record. They hire the right architects (not their nephew's roommate) and perform excessive due diligence.
Additionally, I think the project stands a good chance of indirectly enhancing the Fletcher Place and Fountain Square neighborhoods over the next 10 years.
Cities are in a competitive environment, the same as companies. Companies have to be located in an attractive place to their employees or they will leave, period.
Ask Dallas how they changed development practices when companies started leaving. They built many parks, planned the Trinity Corridor and in general started planning for a thriving downtown. They have gone from 400 downtown residents to 30,000.
I think in general, we need to build more than large footprint, low density apartment buildings, however. That's not an attack on the design. We all have to pay attention to market realities, and people want to do stick-built development, but we also need many more bodies downtown if we really want all of our retail spaces to be vibrant and not have the whole downtown covered in parking garages and struggling storefronts.
C . Anthony Butler of Barclays Capital called for Lilly to make some drastic changes, predicting that its revenue could drop to $18.8 billion in 2015. â??Iâ??m not sure what would drive the going-back-up part,â?? he said in an interview.
He also cited the companyâ??s longtime relationship to Indianapolis as an impediment to taking measures like slashing costs to preserve its margins and dividends. â??I worry that they canâ??t do that because theyâ??re too ingrained in the fabric of the community,â?? Mr. Butler said.
Indeed, since its founding here in 1876, Lilly has become the cityâ??s largest private employer. Mayor Greg Ballardâ??s father worked there for 33 years; the former mayor, Bart Peterson, works there now; and Indiana Gov. Mitch Daniels spent eight years on the Lilly campus.
In a medium-size deal, its biggest purchase ever, Lilly bought ImClone Systems for $6.5 billion in 2008. On Tuesday, in New York, Lilly announced that about 140 cancer researchers from ImClone were starting to work in a new life sciences complex near Bellevue Hospital and NYU Langone Medical Center.
http://www.nytimes.com/2010/10/01/business/01lilly.html?src=busln
http://www.indystar.com/article/20100929/BUSINESS03/9290316/Eli-Lilly-powers-up-its-NYC-cancer-research-center
New York Spends $57.4 Million for a new $700 million biological science complex expected to support about 2,000 bioscience related jobs.
The city of New York is contributing $13.4 million for the construction of the park, while the state is putting up $27 million. Additionally, the New York City Investment Fund is providing $15 million for the project. $2 million in Federal Funds have also been secured.
http://www.insideindianabusiness.com/newsitem.asp?ID=36771
NY Incentive Deal
http://www.costar.com/News/Article.aspx?id=BB2C6207BEA1026996EE7782A215567E&ref=1&src=rss
A process used many times and has proved very profitable for Indy and business.
$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 Cost
84% Government Funding - $131 Million
16% Private Funding - $25 Million
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 doesn'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?
Sources:
Eli Lilly Gets Indianapolis Incentives of $214 Million for $1 Billion, 7,500-Job Deal
http://www.siteselection.com/ssinsider/incentive/ti9909.htm
Eli Lilly To Layoff 5,500 Workers Mostly in Indiana
http://www.thestreet.com/story/10598070/eli-lilly-to-lay-off-5500-workers.html
http://www.insideindianabusiness.com/newsitem.asp?id=37661
Indianapolis Star 9/28/10
http://www.indystar.com/article/20100928/BUSINESS04/9280313/City-may-offer-86M-public-loan-for-project-near-Lilly-campus?odyssey=tab|topnews|text|IndyStar.com
And what is the explanation with the $15M from the City on behalf of Lilly? Did I read that right? Who's going to explain how Lilly gets credit for City funding of the project when Lilly should be repaying tax abatements for which it didn't meet its promises? Cory, can you find answers to these questions?
By the way, it is underdeveloped, because all of those Lilly people live and shop elsewhere.
The Ponzi scheme collapsed and now the banks are riding the funny money train and hoping that it does not derail. But it will, and stupid municipalities who guarantee funds for development for which their is no demand (where is the market study? - that should have been public record look before this theft was announced) will further impoverish their remaining citizens enslaved by public and private debt, while those fairly free of such will flee with their ill-gotten gains, while laughing at our stupidity.