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Start of downtown North of South project in flux

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Delays in getting land zoned properly for the $150 million mixed-use project known as North of South are jeopardizing the developer’s plans to break ground by the end of the year.

Locally based Buckingham Cos. is leading the development set to be built on 14 acres of land owned by Eli Lilly and Co., which houses a parking lot north of South Street between Delaware Street and Virginia Avenue downtown.

The city is offering to provide an $86 million loan and build $9 million in infrastructure to get the project off the ground. Plans call for a boutique hotel, retail space, a YMCA branch and 320 upscale apartments.

When the projected was officially unveiled in late September, Buckingham expected to begin construction by the end of the year and be finished within two years.

As December approaches, though, the timeline already appears to be encountering setbacks. The City-County Council has yet to consider the development and members can’t weigh the proposal until their Dec. 20 meeting, at the earliest. Council approval hinges on a rezoning request that first must be OK’d by the Metropolitan Development Commission.

The commission is set to hear the request at its Dec. 15 meeting, after members voted last week to grant a continuance to business owners near the site.

The owners are concerned that additional traffic and its effect on on-street parking will make it difficult for visitors to get to their shops. Larry Whitham, an attorney for Mayer Fabrics at 321 S. Alabama St., said his client is especially worried about semitrailers being able to get access to loading docks to make deliveries.

“Without those loading docks,” he said, “my client cannot exist.”

But attorney Tim Ochs, representing the development’s partnership, known as NOS Innovation Partners LLC, argued that the project needs to keep on schedule. Any delays will threaten plans to open the hotel before the city hosts the Super Bowl in February 2012.

“This is a very complex project; it’s a series of dominoes,” Oakes said. “If you pull out one domino, our concern is that it delays the inevitable start of construction.”
 
He further asserted that the proper forum for business owners to air their grievances is in front of the Regional Center hearing examiner. Because the site is located within the Regional Center overlay district, its design needs to comply with Regional Center Urban Design guidelines. 

Site plans likely won't be presented to the Regional Center hearing examiner until January, Metropolitan Development  Commission spokesman John Bartholomew said.

Buckingham executives declined to comment on the implications of a delay, deferring questions to the city.

Deron Kintner, director of the Indianapolis Local Public Improvement Bond Bank, acknowledged the issue but shrugged off any troubles that may result from a late start.

“Obviously, it’s not going to get started as early as initially thought,” he said. “But it’s not problematic from our standpoint.”

Even so, council Democrats will be scrutinizing details of the project, particularly in light of the council’s passage earlier this month of a contentious plan to lease the city’s parking meters to a private company, Democrat minority leader Joanne Sanders said.

The measure narrowly passed 15-14, with every Republican voting along party lines to ensure approval.

To Sanders, the vote illustrated the administration's lack of confidence in the city's ability to manage parking meters.

“But apparently we can efficiently loan money to private companies when banks won’t even do it,” she said.

The city plans to fund North of South by issuing bonds, using income generated by the development to pay off the costs. Instead of $86 million, however, the city actually is borrowing $98 million to pay for administrative costs related to the bond sale and for interest payments while the project is under construction and ramping up.

City officials said the additional $12 million adds flexibility to the bond issue, because it’s often impossible to know how the bond markets will perform between the time of filing and issuing of debt. They also say bond issues involve “soft costs,” such as interest.

Lilly will continue to own the land and the state’s Indiana Economic Development Corp. also is involved, making the project a public-private partnership.

The project is expected to create 2,200 temporary construction jobs and 200 permanent jobs. It also is anticipated to generate $1.7 million in annual revenue for the city.

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  • These businesses are wholesalers not retailers
    These warehouses are not open for retail. They don't want foot traffic to come in their doors as they distribute to manufacturers or other retailers. They were there first (yes, before Lilly)and have been there for generations. The city has been fine with this type of business being at this location for over 100 years. It cost a lot to move to another location. Is the city going to pay for that? If the design plans were adjusted to allow for semi-trucks to enter and leave without having to push cars and people out of the way, then the project may have some viablility I would think. Everyone needs to consider both sides of the story. I'm sure these businesses would love the improvements to the area, but not at their expense.
  • Super Bowl impetus
    If I operated a business near such a project, I'd consider re-focusing to what could make money from its proximity. Fabrics might be better suited to another location-or the Buckingham companies might offer them a swap (buy-out, bribe, whatever)
  • public risk
    Yep, financing $4-6 million to upgrade parking meters was way too risky for the City, but there's no risk in dropping $98 million into this one. As already pointed out, all the other new apt buildings and hotels downtown are just bursting at the seams, right? The project might be great, as soon as it's slightly more palatable to private investors. The City agreeing to finance public infrastructure upgrades is acceptable, but financing the private development is irresponsible.
  • 100% Public Financed?
    Schedule of Hearings for City's $98 Million Loan (Plus $45 Million Incidentals) for No-So Project

    http://hadenoughindy.blogspot.com/2010/11/schedule-of-hearings-for-citys-98.html
  • This Project Brings NOTHING
    How is the Maxwell doing? How is the Hudson? How is Downtown office vacancy? How is the Hearthview residential project in Lockerbie? What is the occupancy of the hotels downtown?

    I understand the IBJ only survives on advertising and so it seems to have turned into an advertising company for projects like this. It would be great if it analyzed this project more; on their own, and not in the words of the self interested.

    The vast majority of people that come/go Downtown choose to live somewhere else for various reasons. UNTIL better school options and more jobs are created Downtown, projects like this North of South will need to be GOVERNMENT SUBSIDIZED/WELFARE. Pretty high end for WELFARE huh? There is a glut of apartments downtown; why can't BUCKINGHAM MAN UP AND COMPLETE A PROJECT LIKE JOHN HART!? The City and Downtown POLITICOS should stay out of this one and focus on lobbying for more pay to play contracts for their clients instead of robbing Marion County blind before Ballard loses to the next Mayor. I just hope the next Mayor does not let the leaches suck at our taxpayer trough like those currently have been for the last 3 years.

  • Gee...
    You think that since every lender turned down this project as being too risky that maybe the City should do the same.

    It's disappointing that IBJ didn't report the entire store. Marion County GOP Chairman Tom John is the lobbyist to the Mayor's Office for Buckingham. This is yet another example of a Ballard supporting sticking taxpayer money in their pockets.
    • unoriginal
      Doesn't this project seem like a ripoff in name of Chicago's recently completed SoNo (South of North) redevelopment area. Ugh, how un-original. Just what you'd expect of Indianapolis though.
    • figure it out
      You hired Mike Morrison to figure things like this out on the site. Let him do his job.
    • Urbanfumbleitis
      Like so many other promising developments downtown that have gone up or down in flames, this one is shaping up like the others,... Projects that impact so many should be on a limited administrative fast-track.
    • Also most tax abatements are phased in, so they get 100% abatement the first years, 90% the second and so on. So by the 5th year they are paying 50% taxes.

      Also you forgot payroll taxes and food and beverage taxes for any restaurants in this project, not to mention the taxes generated by those living there.
    • Selfish, ridiculous concerns
      Nearby businesses are concerned about additional traffic after they've looked out at a sea of parking lots for years? They're about to have a golden path right to their front door and they're complaining about too many people?

      Their business area is about to get a MAJOR renovation that other parts of the city would kill to have. They need to stop looking a gift horse in the mouth and figure out how to capitalize on all of the infrastructure, foot traffic, and visibility improvements they're being handed on a silver platter.

      Why do businesses downtown in this city not understand that having more businesses, more people, and yes, more traffic is a great thing? Indy is not Smalltown, USA. Your business is located in the downtown of a major mid-tier city. There is going to be traffic. A lot of traffic. And people, a lot of people. If you can't handle that, then doing business downtown is not the right location for you.

      I'm sorry, but a couple of loading docks better not hold up this major development

      • On time JIT
        Ballard will make sure this gets going as the option of putting in more parking meters means more money to his cronies. I think he is looking into putting parking meters at loading docks too.
        • Tax Benefit
          Actually, Pat, the city will see a tax benefit, even if not one based on property tax. Bringing in more residents means more local income tax. More hotel rooms mean more innkeeper's tax. More retail means more sales tax. If we could get a grocer in the project, it would make living downtown easier, which would increase the tax base further. Developing vacant lots into productive space really does bring economic development, which is why cities don't mind giving up the property tax revenue stream for a while.
        • no taxes from project for 10 years
          The deal has all of the property taxes generated by the project for the first 10 years, the $1.7 million estimate mentioned, going to pay off the loan. So, the City won't see any tax benefit for at least a decade.
        • OMG!!!
          Are you telling me that these other business owners are worried about the additional customers that dense downtown development will practically deliver to their doorsteps?!? Seriously?!? Lack of parking?!? Ughh! These business owners better not muff this project up, lol...

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