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Specialty grocer on wish list for MSA development

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The 43,000-square-foot retail space that’s part of a planned 28-story downtown apartment tower might finally help attract a national, specialty-type grocer to the city’s core.

City officials on Wednesday announced the $81 million project from developer Flaherty & Collins Properties, which is slated to be built on a portion of the former site of Market Square Arena at Alabama and Market streets.

Flaherty & Collins CEO David Flaherty said his company is in discussions with various retailers interested in the space, which likely would house an anchor tenant and two or three smaller shops. Specialty grocers such as The Fresh Market Inc. and Whole Foods Market Inc., in addition to Earth Fare and Fresh Thyme, are high on the wish list to occupy the anchor space.

“We’d love to have a Whole Foods, or a Whole Foods-type tenant," said Flaherty, noting that he hopes to have leases signed by the end of the year. He declined to name firms in negotiations.

Deputy Mayor for Economic Development Deron Kintner echoed Flaherty’s sentiments, saying that the city has “one or two in mind”—referring to The Fresh Market and Whole Foods—that it would prefer occupy the anchor space.

“I think it’s a current segment that we don’t have covered,” he said. “The urban grocer segment is something that could fill a niche downtown.”

The apartment-and-retail development will be backed by a combination of public and private funds, with the city agreeing to contribute $17.8 million from a bond sale and land appraised at $5.6 million. The developer is slated to break ground next spring with completion by late 2015.

Besides Flaherty & Collins, four other teams submitted bids to the city for redeveloping the Market Square Arena space, including Keystone Group and Cleveland-based Forest City Enterprises Inc.

Paul Okeson, vice president of Keystone, said the city made it clear during the process that it wants an urban grocer to occupy the space.

“We called around to [the grocers] to gauge interest, and the response was pretty positive,” Okeson said. “I can’t imagine it would be too hard to secure a deal at this point.”

Downtown for years has been served by just one supermarket, a Marsh at 320 N. New Jersey St., which the company converted from an O’Malia’s Food Market after purchasing the homegrown grocer in 2001.

Now, downtown could have as many as three supermarkets, if in fact one commits to the MSA project.

A Marsh grocery store will be a part of Flaherty & Collins’ Block 400 project, which calls for 487 apartments, a parking garage and additional retail space on properties bounded by Michigan Street, Capitol Avenue, Vermont Street and Indiana Avenue. The project is under construction.

So can downtown support that many groceries, even with the recent onslaught of apartment projects that will bring more residents to the area? At least a couple of local retail brokers think so.

“We’ve seen tremendous residential growth in the downtown, and I feel that there is enough population in the downtown and the nearby neighborhoods to support an additional grocery,” said Bill French of Cassidy Turley.

Gary Perel, a retail broker at Newmark Knight Frank Halakar, said Fresh Market or Whole Foods would seem like a “logical” fit for the F&C project, and that it should “garner definite interest from both.”

Greensboro, N.C.-based Fresh Market has local stores at 5415 N. College Ave. and 2490 E. 146th St., with another slated to open in at 116th Street and Cumberland Road in Fishers in early November.

Frank Swiss, a local retail broker who represents Fresh Market, said the company in the past hasn’t really considered a downtown location because the area has lacked quality housing.

But now, he said, the grocery at some point likely will consider a downtown location.

“We are looking throughout Indianapolis and other parts of the state to place a few more stores,” he said, adding that Fresh Market is very selective in its locations. He declined to say whether Fresh Market was specifically considering the Flaherty & Collins project.

Austin, Texas-based Whole Foods has locations at Nora Plaza and in Carmel. The firm is represented locally by Bryan Chandler, a principal at Eclipse Real Estate, who also declined to gauge his client's interest in the project.

Overall, Flaherty & Collins’ MSA plan calls for 300 luxury apartments, 500 parking spaces and 43,600 square feet of ground-floor retail space. It would feature a rooftop pool, a green sky window on the tower roof, and apartments with floor-to-ceiling windows and panoramic views of the city renting for between $1,300 and $2,400 per month.
 

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  • Indy is not Dead
    I ride my bike downtown from Irvington every weekend and have been floored by how busy downtown is. The Cultural Trail is booming and countless people are out enjoying what the city has to offer. As a former Chicago resident, I'm proud of how lively downtown Indy is becoming and see it as the major urban city it is becoming. I welcome a Whole Foods, Fresh Market, or Trader Joes. We've been trying to get one to come to Irvington for years now and one in this downtown location is very convenient for the large east side community that is currently being under served for this type of grocer. The impact will be greater than just on downtown.
  • Sorry Zipster...
    ... but you sound clueless. Downtown Indy is hardly dead, especially the Mass Ave area very near where this will be located. I can appreciate your apparent infatuation with Austin but come one dude, get real....
  • Not a chance
    Whole Foods flagship store is located on Lamar Street in downtown Austin. It is a screaming success. That said, it compliments other retail already established in the area including BookPeople and Waterloo Records. It is a young, hip, energized area. By comparison, downtown Indy is dead. I know, I know, but it's true whether you like it or not. I can't imagine that Whole Foods, or even Trader Joe's for that matter, would consider opening here with so many better options across the country.
  • Don't worry about CM
    We can't be afraid to have new things downtown just because they might have a negative impact on what currently exists. The City Market will survive just fine. And frankly, having 500+ new neighbors won't hurt the City Market no matter what store ends up in the new tower.
  • City Market
    I am in agreement with those who worry about the negative effects a new grocery store would have on the City Market.
    • Trader Joe's
      A Trader Joe's in downtown would be packed all day. Their two north side locations are always swarmed and I honestly can't imagine a better national chain "urban" grocery for this location. The only issue is that they don't franchise so if they don't see downtown as a financially viable location there is no chance to convince them otherwise.
    • What's across the street?
      A Whole Foods or other similar retailer will do the City Market no favor if opened at this location.
    • Agreed
      But a Traders Joes would be a true win-win. It hits a sweet spot between Marsh and Whole Paycheck. Now what would really be cool. Say Broad Ripple's "Good Earth" combined with "Goose the Market" and "McNamara" under one roof. Complete Awesomeness.
    • Kudos to Marsh
      I hope that nothing destroys the viability of the current Marsh, former O'Malias. We have to give them credit for facilitating downtown living; without a grocery we would never have gotten to this stage. L.A. only got their first downtown grocery recently after trying for years. The charm of that store is that it serves no one perfectly, but it is a place where C.E.O's, professionals, college students, out of town visitors and the homeless all shop and stand in line together. To me that is the charm of being in a city. While Whole Foods has some upscale interest for me, I've read a bit too much about their C.E.O., and he just isn't my kind of person.
    • Good Fit
      I think this could be a good fit and doesn't surprise me given the growing demographics downtown. Marsh really targets a different customer than Whole Foods/Fresh Market. There is some overlap but I do think downtown can support both. I also think we will eventually see Target but I would guess that will come together on the southern part of this project with the south half of MSA and the 1/2 block south of it which can be put together for one entire block. I would expect that to be part of a larger mixed use project with additional apartments/condos. If this current project is successful, which I think it will be, I expect the next phase could be even bigger and bolder. And don't get me started on government buildings or jails. This is an urban core, not suburban Carmel, a mix of uses is to be expected.
    • LOL
      Micah, what is it, exactly, that you consider the "government district" of downtown? LOL. I mean I realize it's right next door to the CC building, but that area isn't anywhere NEAR as "government"-al as the west side of downtown.
    • I shop downtown
      I live in the Irvington area and shop regularly at the downtown Marsh because the Irvington Marsh store sucks. I would love to have a Target downtown also as I refuse to go to Washington Sq and the Glendale location is not a Super Target; so am forced to shop at Emerson & Southport Rd.
    • Target
      We need a Target downtown. I love Whole Foods but there is a new Marsh opening soon. I know that Whole Foods and Fresh Market are better than Marsh and I personally would like Whole Foods downtown. But, being a downtown resident we really need a versatile store like Target. I now drive to County Line Rd. or Glendale to shop there. One of the great selling points for downtown is an urban area that has everything you need so that you do not need to always drive. In the next 5+ years the population of downtown will grow at a huge rate. If our mass transit wasn't stuck in the 70's that would help as well.
    • Don't hurt City Market
      Granted downtown needs a good food store, but don't go overboard on the specialty products and destroy the gourmet space City Market has worked so hard to recapture.
    • Upscale Price Point
      "...apartments with floor-to-ceiling windows and panoramic views of the city renting for between $1,300 and $2,400 per month." Given that price point...an upscale grocery store wouldn't be out of line...unless all these apartments are gobbled up by government agencies at a substantial discount in exchange for the land we (taxpayers) GAVE to this project. I think the land should've been LEASED to the project to pay off the bond issue.
    • I wish, but not likely
      “I can’t imagine it would be too hard to secure a deal at this point.” It is very hard to secure a deal with these companies. Every developer thinks their building is just perfect for a [Whole Foods/Trader Joes/Fresh Market/Ferrari dealer]. I live downtown and would love to see something come here, but there have been so many failed attempts to lure these retailers that I'm not hopeful anymore. Plus, Whole Foods is upscale and would not be a good fit for the government district of downtown.

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