Star negotiating HQ move to former Nordstrom at Circle Centre

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The Indianapolis Star is negotiating to take a portion of the space in Circle Centre mall vacated by Nordstrom two years ago, Publisher Karen Crotchfelt confirmed in a note posted on the newspaper's website Wednesday evening.

The Star has been searching for new space since its parent, Virginia-based Gannett Co., put the newspaper's 190,000-square-foot headquarters building at 307 N. Pennsylvania St. on the market last July. Gannett received more than a half-dozen offers on the building and adjacent 500-space parking garage before agreeing to terms with local apartment developer The Whitsett Group.

“This location would suit our needs very well,” Crotchfelt wrote, referring to the former Nordstrom space. “The extremely large floor plates would allow us to create an open and collaborative environment that would bring all our employees together for the common purpose of serving the community.”

The note did not specify how many square feet the newspaper would take or whether the new offices would be spread over more than one floor. It said the space under negotiation is at the corner of Meridian and Georgia streets.

Crotchfelt added that while details still need to be worked out with mall manager Simon Property Group Inc., the two agreed that they needed to be transparent about the process.

“Plus, let’s face it: I can’t let anyone scoop us on this story,” she wrote.

On Wednesday morning, IBJ’s Property Lines blog reported that The Star was considering a portion of the Nordstrom space, along with other options including the CSX Building, which is at the southwest corner of Georgia and Pennsylvania streets.

If the lease deal closes for the Nordstrom space, it would set up a potentially awkward landlord-tenant relationship involving the city and the state's largest newspaper.

Circle Centre mall’s ownership is a complicated mix of entities that includes the city and the newspaper itself. The city owns Circle Centre's parking garages and the land under the mall. It paid more than half the cost of building the mall and constructed the Nordstrom space at little or no upfront cost to the retailer.

Most of the mall itself is owned by a partnership of 20 mostly local companies, including The Star and Simon, which collects fees for management and leasing.

The high-end department store chain closed the 210,000-square-foot downtown store in July 2011. Nordstrom opened with the mall in 1995, helping ensure the project's success. A Star move into Nordstrom space would be a disappointment to some city boosters who hoped for a retail replacement.

Meantime, The Whitsett Group plans to start construction by the end of the year on a building to be constructed on the Star’s longtime campus at the corner of Delaware and New York streets, principal Joe Whitsett said.

Whitsett’s plans call for up to 500 apartments in three buildings and retail space that could attract a bank branch or restaurant.


  • south of the circle
    The problem isn't just the mall itself, it's the whole area south of the mall. Much of Meridian street south of Nordstrom is a ghost town during the day as it is mostly bars. Not even Georgia Street can give that area life. It just seems to barren, empty and unappealling. The whole area would need a makeover, expansion if someone is to finally fill that Nordstrom spot.
  • This---
    This speculation is nothing but speculation--actually it is all "smoke" from :USA today-Indy edition---they are headed to the CSX building but in reality I believe that the next "Big" announcement out of 307 North Penn., is that it will be just a Thursday-Monday publication.
  • Compromise
    It would be the best of both worlds if both the Star and retail space could be blended into the Nordstrom space. I doubt if the Star needs the entire building. It would be nice to have the space filled. Its such a void in downtown. Maybe the Star occupying a portion of the building will be a draw for restaurants and retail. At first I was totally against this idea but now I am seeing it could work especially if the building is renovated adding more glass to the facade and ground floor. This may be a nice compromise.
  • Lease available
    Doesn't the zoo have a large bird cage where this Gannett-owned propaganda rag can lease some floor space? The outrage here is ridiculously funny.
  • They Got What They Want
    Jon, if all these allegedly interested retailers weren't willing to pay what Simon wanted for the space, it makes sense for them to look at alternative users that would pay the rents they are seeking. If the Star is willing to pay more to use the area as office space, then I would sign them up for a lease, too. A business serves only one purpose, and that is too make as much money as possible for the owners. Simon does not exist to fulfill new urbanists' dreams about what a downtown should look like. Moreover, travel around the country and you will see that even in very successful downtown retail markets, such as San Francisco, it is not uncommon for buildings that are primarily retail space (such as the downtown Westfield San Francisco Centre) to incorporate office use. The retail industry has been under going major change for years, traditional malls are something of a dying breed, especially in cities where visitors do not flock to a world famous shopping scene, such as New York. Moreover, traditional malls need a relatively high residential density to be successful, and the residential base of downtown Indianapolis is simply too low to support a traditional mall. Office workers and convention goers simply are not going to engage in the sort of shopping necessary to support a traditional mall. The Star could take up a large portion of the empty space and still leave enough room for some smaller retail tenants on the ground floor to provide an engaging street scape. Empty space makes no money and creates a very uninviting atmosphere for downtown visitors. It is better to fill up the space with a large tenant who will bring people and life to the area.
  • It's official
    Not only is this an egregious waste of real estate, but I don't think there's any doubt at this point that Circle Centre is officially dead. After only 18 years, they're already joining the likes of Lafayette Square, Washington Square, Glendale, Eastgate, and so forth.
  • Armchair Leasing
    I posted this earlier on the Property Lines blog. Figured it might be worth posting here as well, since some of the same issues & ideas for the Nordstrom space are popping up. I didn't realize that there are so many retail/leasing experts out there. I bet the brass at Simon are wishing they had all of you guys on their payroll. Because obviously you all know MUCH more about successfully leasing retail space than the folks at Simon. C'mon, people! Empty/vacant spaces don't make any money...signing leases and filling up empty spaces DOES make money. A dash of common sense will tell you that Simon has been trying to lease this space any way they can (single large user, multiple smaller users, now an office user). The fact that its still empty...that tells me more about the space & market conditions surrounding the mall than it tells me about Simon and their leasing efforts. And even though they are a retail giant, they can't FORCE a tenant to come here. If they could do that, they'd have the best business model on the planet. If CB2, Apple, etc. are such perfect fits for this space, then why aren't they under construction right now? Do you think Simon never bothered to call/ask them? If that's the case, then you guys should just send your proposals directly to CB2 or Apple's HQ. Based on your obvious leasing expertise, the deal should be inked before long. I know I can't wait to see/hear about them opening up soon. Sheesh...
  • Simon
    Lots of retailers have inquired about the Nordstrom. Big names. Target wasn't just a rumor, they were truly interested. I know a few others that want the spot too. The issue is with Simon, not with demand. They want too damn much for the spot, the same applies to many other spots inside of there. I knew a manager at PacSun, before it closed, that says the mall just wants much more than it's worth in sales numbers. It gets a lot of tourist traffic, so theft numbers are high (though they typically are in any mall.) Unfortunately, despite Simon's HQ being a short walk away, Circle Centre just seems low on their list of priorities. They won't work easily with potential tenants, and don't budge much on their high asking prices. If it becomes a dead mall, it's purely the fault of Simon's terrible management.
    • Anything but Suburbia
      While I know that many of the suburbanites mean well when they give advice, my preference is for anything that's not like the suburbs. I die a little inside when I hear Cheesecake Factory suggested as if it's a good thing! I don't claim to know what the correct path is, but I would love to find one that doesn't include mega corporate homogenization. I, for one, don't want downtown to look like Carmel. I don't think malls, strip malls, large seas of parking lots, wide 4 lane roads, big cars/trucks, the inability to walk anywhere, fear of minorities, and fear of youth are good things. Your parents and grandparents ran away from downtown decades ago because they were scared. I'm not sure that the decedents of the scared generation have much knowledge about anything other than "more of the suburban same, only this time with a bigger parking lot!"
    • Give it a chance.
      I have lived downtown for nearly 15 years...and in that time, I don't think I'd spent a dime at a single department store. While I think anchor retail is great in theory, those days are gone and frankly, 210K sf is too big for most of the surviving few (save a Target/Walmart/Meijer which aren't big draws to travelers). Let's think for a minute about what the Star could bring: 1. Hundreds of educated, professional workers - check. 2. An interesting 24 hour operation - check 3. A company with a long, local history - check. I'd love if they'd glass in the entire corner, and make it sort of a show like the radio stations on the Circle. So many folks scream about bringing retail to the mall but never shop there anyway. The Star is a quick way to fill a third of the void left by Nordstroms, brings bodies to the heart of the city as well as their dollars. Let's not let perfection be the enemy of good. Just my $0.02
    • Death of Circle Centre
      Number one, congrats to the IBJ for scooping the Star on its own news! Number two, Circle Centre is dying a slow death. Putting the Star in that space will scare off any retailers who were considering Circle Centre and will drive out those who can get out of their leases. I work downtown every day, and I don't shop at the mall. There's just nothing there I'm interested in. And the perception of crime around the mall scares people away outside of office hours. Ballard should be paying attention to this instead of to cricket.
    • What is the Star thinking?
      Me again. What in god's name is the Star thinking? Moving your office space into a shopping mall? SPG has to have some huge $/sq. ft rates plus it doesn't "gel". Would moving into Castleton Square Mall be a good mix? This is the worst business decision made in Indy in the last 200 years and let me be the first to say that Karen should be receiving a letter from the owner shortly stating: "Karen Crotchfelt, We need your immediate resignation letter on my desk in the next 5 min. And for such a stupid idea, I'm taking away your pension and then I'm going to sue you for all your previous wages as its certainly evident that we wasted our money on you and want it back." This exceeds any and all bad decisions EVER made in Indy.
    • Makes no sense
      SPG just admitted defeat by using the mall for office space. What a stupid idea that will bite them later on. With the continued loss of retail and the gang problem, I'm happy to be in the burbs and will only go downtown when I have to go to a governmental building.
      • Wow
        Some of the comments on here are just utter nonsense. Senator and Indy, in particular, are obviously clueless when it comes to downtown Indianapolis. I don't like the Indy Star for this space. I think this corner needs to be opened up and made into an indoor/outdoor space with three levels of retail and restaurants with another entrance into the mall from that end.
        • I see promise in the idea
          The retail game has changed dramatically over the last 17+ years. Gone are the days of multiple big box retailers in an urban setting (particularly in smaller markets). Well done Indy Star and Simon. I am hopeful there will be changes to the buildings exterior to include news displays, etc.
        • SImon mismanagement
          SPG continues to demonstrate that they are not seriously committed to properly managing downtown Indy's most significant retail asset. SPG is not an office developer, therefore why is the City allowing them to turn Circle Centre into nothing more than an office park with supporting amenities? Noone is going to convince me that downtown Indy in 1995 was somehow in a better economic position to lure the best retailers of the day, but somehow, it is not feasible in 2013.
          • Downtown Resident and Senator
            Instead of name calling and sarcasm; take a moment and recognize the frustration people are expressing with what has occurred to our downtown mall. I have worked downtown for 28 years and lived downtown for 25. I saw the street level retail offered by Ayres, Blocks, Redwood & Ross and Strauss among others dry up. Simon was then proposing the mall and within a few years we were left with a downtown pocked with massive holes waiting for something to happen. When the city and a number of downtown companies came together and paid for the construction of the mall it had a dramatic, positive impact on the downtown and brought renewed life to the CBD. The grand experiment that is downtown is not dead and companies are not leaving downtown in droves. The posts here recognize that finding a tenant to take all 210,000 square feet isn't realistic, but finding a mix of smaller retail and restaurant sites is feasible. I was just in Nashville and noted an Urban Outfitters near downtown proper in a cluster of apartment buildings. Indy is similar in size and demographics and could easily support similar offerings downtown. I am not convinced that Simon has done everything possible to put new retailers in this mall and the city and the other mall owners should continue to push for retail/entertainment options for this space, not office. The Star knows it makes sense for them to be downtown and there are other sites (the CSX site for one) that make more sense. Placing their offices on the ground level along Georgia Street, next to the Fieldhouse and a block from the mall would put the same number of workers in close proximity to the mall rather than taking away from what should remain a retail/entertainment venue. We have a large number of people who have moved downtown and a number of apartments going up; we don't all want to be tied to a car and have to go to the burbs for shopping. Gannett does not belong in Circle Centre.
          • How is IndyStar in business?
            This is a serious question. Is IndyStar profitable enough to survive much longer? We will just have another vacant space soon.
          • CB2 and an Apple store...
            Excellent ideas! Do you think they know the Nordstrom space is available? Perhaps someone at Simon should make a call to let them know!! I have lived downtown for 10 years...the foot traffic driven by Nordstrom on Georgia and Meridian was NIL. When the Star moves in Georgia street just might come to life...which will only further help sustain businesses along south Meridian and Georgia streets (thus further developing the downtown market)!
          • AAA City
            Cheesecake Factory, The Apple Store, national retailers, blah, blah, blah. You homer gomers just can't admit to yourself that Simon has contacted these folks already and they just laughed. I heard them laughing. Millions of dollars of tax incentives down the drain. Watch downtown Indy grow, uh, I mean go. In 10 years, it's going to look like 1980 again, except for all of those unpaid sports palaces demanded by those of you who just couldn't accept that Indianapolis is the very definition of Triple A.
          • Downtown Indy is No Place
            The mall is dead. No retailers want to go in, so Simon goes for office tenants like Brown Mackie and IndyStar. Let's call it as it is. Downtown Indy is a joke. It cannot support retail. The grand experiment is over. Most companies are also moving out, leaving Lily, Rolls Royce and myriad government and quasi-governmental agencies. You would have to be spot on crazy to invest in downtown Indy real estate. The writing is on the wall.
          • Horrible Decision for Downtown
            I commented at length on the Property Lines story earlier this afternoon (see link above). Again, I cannot see the logic behind this move whatsoever. Michelob is spot on with his suggestions. As a matter of fact, CB2 and The Apple Store have been at the top of my list of obvious, no brainer choices for Circle Centre given the local demographics of downtown. Restaurants have proven to be wildly successful on the west side of the mall as long as they open to the street rather than inward. Establishments that create a regional draw belong in the Nordstrom spot to function in the same design capacity Nordstrom did for sixteen years. It's really a simple formula that Simon surely can comprehend. I sincerely hope city officials or other large stakeholders in the mall chime in before this deal closes!
            • 4th floor
              I doubt any high end retailers will locate in that space, with all the shootings, gangs, and roaming kids in the mall. One of the posters suggested removing the theaters, and utilizing the 4th floor instead. Not a bad idea.
            • 4th Floor
              The Star would be an excellent use for the nearly dead 4th Floor of Circle Centre. The theaters could be removed to make space...which would cut down on the "after hours youth" problem. Otherwise, I agree that the prime Nordy corner ought to be restaurants and retailers.
            • Sara, have you been to the mall??
              The Nordstrom space is at the far end of the mall. The mall has experienced excellent sales over the last few years without Nordstrom. Bring Star employees into the mall every day, and my guess is the mall does better than ever. By the way, two years+ vacant...does that tell you anything about big box retail in a CBD setting? The retail game is changing...kudos to Simon for recognizing that and identifying a quality tenant for the space.
            • Mall will fail
              As others havve indicated, this space needs retail and is already too long vacant. The loss of Nordstrom has already decreased purchasing traffic and ceding the space to business will seal the demise of viable mall traffic.
              • I must be the only one...
                That believes this is an EXCELLENT use for the former Nordstrom space. An opportunity to bring what must be a huge number of employees to the Meridian/Georgia area is a huge win for the city. For those of you with negative comments toward Simon and or Indy Star, shame on you. What would happen to downtown Indy if neither one was willing to make a long term commitment to downtown Indy. Appreciate those that have brought, and will continue to bring energy to downtown!
              • What a WASTE
                The Nordy space should have all high-draw restaurants (like Cheesecake Factory)...ones that would be great for tourists...on the first floor with lots of windows facing georgia. Floor 2 should be a CB2. That furniture store caters to apartment dwellers. Win win. And finally on 3rd floor...another Apple Store. The Keystone store is always packed, so this market can easily support another store. Bottom line, Simon simply doesn't care about this mall. Simon's the WORLD'S largest mall developer and manager. Do you really think a business with that much clout and leverage couldn't put top tenants in that mall? If they cared that spot would have been filled a few months after Nordys departed. Mr Mayor, DONT LET THIS DEAL HAPPEN! Time to get tough with Simon.
                • Please don't..
                  Nooooo! I wish the Star well, and I hope they find world class headquarters, but please Indystar, take the CSX space! I'd really fear for the future of Circle Centre if too much of that prime anchor space is taken for office space.. I know it's taken way too long to fill it, but it really needs to be retail.

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