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Whitsett bids to redevelop Star headquarters

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One of the city’s most prolific developers of affordable housing hopes to buy the Indianapolis Star headquarters to redevelop the property into apartments or condominiums.

Real estate sources tell IBJ that The Whitsett Group could have the edge in buying the 190,000-square-foot building at 307 N. Pennsylvania St. and its 500-space parking garage. Company owner Joe Whitsett did not return phone calls Monday morning.

Star Publisher Karen Crotchfelt tweeted Thursday that “we have offers on our Penn Street building and are moving the sales process forward with our partners. More soon.”

The newspaper’s parent company, Virginia-based Gannett Inc., received more than a half-dozen offers on the building in early March, and The Whitsett Group is one of the bidders, the sources said. Gannett put the Star building on the market in July. It has called the brick-faced offices home since 1907.

Whitsett would seem to be a logical buyer for the property. It is teaming with Indianapolis-based Ambrose Property Group to rehab the neighboring American Building at 333 N. Pennsylvania St. into 72 apartment units. Those tenants need a place to park, and the Star’s seven-story garage would solve the problem.

Whitsett and Ambrose also own the nearby 15-story Consolidated Building at 115 N. Pennsylvania St. with plans to convert it into 98 apartments. They closed on that property in August 2012.

Aasif Bade, a co-founder of Ambrose, said his firm chose not to explore a purchase of the Star’s headquarters.

“We’re happy with the recent investments we’ve made in Indianapolis,” he said. “While we think the entire block is a great opportunity, we decided not to pursue a purchase of the block.”

He declined to discuss whether his partners on the American Building project were pursing a solo acquisition of the Star headquarters.

Founded in 2007, Whitsett last year finished a $7.2 million project at 10th Street and Central Avenue with 86 apartments spread over a new building and the retrofitted former home of Central Products Inc.

The company also has begun construction on projects on the former home of the Keystone Towers at Allisonville Road and Fall Creek Parkway and Winona Hospital at 3295 N. Illinois Street.

At the Keystone Towers site, Whitsett plans to build up to 140 apartments in a $22.5 million project called The Point on Fall Creek. The hospital is to be replaced with the $6.5 million, 50-unit Illinois Place apartments.

Local real estate developers and brokers have said finding a reuse could be tricky for the Star’s labyrinth of buildings combined over the years with multiple floor levels, narrow hallways and a basement built to house printing presses.

Working in its favor is the prime location—within shouting distance of both Monument Circle and Massachusetts Ave., and a strengthening downtown real estate market.

For tax purposes, the building is assessed at $21.3 million, well above what it’s likely to fetch from a sale. The Assessor’s Office assigns a more than $14 million value to the land alone and just $7 million to the improvements.

The building is listed by the local office of CBRE, charged with unloading the property and finding the Star’s 350-employee staff a smaller, leased space downtown more suited for a media property that has shed hundreds of employees as it adapts to the digital age. There’s no asking price.

“When we moved the press out of here in 2002, this building became way bigger than we’d ever need. To maintain it or retrofit it for a modern media company would be very expensive,” Crotchfelt told IBJ in August. “We believe there’s a better place for us and hopefully a better owner for four acres of prime downtown real estate.”

Real estate brokers say the Star is considering Artistry, a new development by Milhaus Development, along with the Safeco Building at 500 N. Meridian St., and Regions Tower as possible new homes for its news operation.

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  • @Chris: calm down
    Chris, don't you have a job or something? Relax and lay off the 10 page IBJ comments. Whether it's "mostly" low income is not the point--it's perception. And I agree with the others, it really seems like a ton of affordable housing is being brought into downtown for some reason.
  • Ben, If You Have Facts Cite Them
    Ben, you are certainly free to disagree on any issue. But, just stating a general feeling you have based on a few articles you have read in the IBJ does not mean your assumption has any basis in reality. If you can cite some authoritative source (e.g. just call Indianapolis Downtown, Inc. or the Department of Metropolitan Development and ask for some information) showing that most new downtown residential construction is predominately low-income and that the number of such new units will out balance existing market-rate construction) fine, then do it. THEN, if you are correct, let's debate whether that is even a bad thing, and why or why not. What I think is happening is that you and a few others are inventing a problem that does not exist.
    • Agree to disagree
      I am a regular IBJ reader, especially this blog, and while I agree downtown living should not be reserved for the middle to upper class, based on recent IBJ articles there does seem to be more low income housing going up vs market rate. I believe if downtown really wants to take off, there needs to be more market rate vs low income because the people living in market rate will more likely bring in stores and restaurants and spend more $ at them than low income. That is just the economics of it.
      • Rich
        What is your point? First, you are making an assumption that most people living in the Avenue take loans to pay their rents. Then, you are making an assumption that these loans are not private, but governmental. And at the end, who cares? Those apartments are market-rate and high-end at that. Anyone can rent them. Does it really matter if the medical student rents there and pays it with his loan, or if the young professional pays it with her salary? I agree with Chris that if anything, downtown has mostly "high-end" residential, and it needs more of affordable residential options. Plus it doesn't say anywhere that Indy Star property would be for low income.
      • Avenue is low end
        Chris... I would not include the Avenue in your list of market rate...while it is not officially subsidized, they are in fact college student dominated which means their rent is paid by student loans....subsidized.
      • High Drama?
        Michael, is the Cosmopolitan low-income housing? Or 451 Market? Or Block 400? Or CityWay? Or the Avenue? Are many of the older developments like Riley Towers "low-income?" A few buildings of affordable housing does not mean the city's downtown is "turning into a low-income housing project." Downtown is not supposed to be reserved only for the affluent (though it does tend to skew that way).
      • Downtown residential
        "I believe other cities have much more residential in the heart of downtown than Indy does." This depends on what the comparison cities are. Standing next to Chicago, Indy's downtown housing looks pretty meager. And Indy's growth in downtown housing during the previous decade was poor compared to most other Midwest cities. But Indy had stronger downtown housing growth in the 1990s when many other peer cities were flat. And downtown housing growth at the moment seems quite strong once again. I was in Houston recently, where the very knowledgeable city boosters touted their downtown's 2500 residents, which is a fraction of what Indy can claim, and Houston is obviously a much larger city. My suspicion is that the ratio of affordable housing going up in downtown Indy right now isn't out of the ordinary.
      • Not low-income
        Indy, I think you misunderstood the other comment. Other cities aren't trying to fill their downtown areas with "affordable" housing. It's great to see more residential coming downtown, but I'm troubled to see how much of it is subsidized or low-income housing.
        • Vacant Property
          Jimmy, would you rather the properties sit vacant? The article doesn't mention if all of the apartments will be low income or not. Either way, if they can fill them and maintain them, I think it's a positive for the city. I think it would spur additional economic development for shops and restaurants downtown instead of "spooking it away". And to answer your question, I believe other cities have much more residential in the heart of downtown than Indy does. That seems to be changing though.
          • Stop it, Whitsett!
            I think Whitsett's plan is to see all of downtown turned into a low-income housing project. They are gobbling up prime properties and turning them into affordable housing. Is this what other major cities are doing? These projects could become exciting commercial, retail or market rate developments, but instead will spook away meaningful development.

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