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Whitsett goes big with Star project

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A local developer plans to tear down part of the Indianapolis Star’s downtown headquarters while saving most of the building in a redevelopment that calls for 350 apartments—more units than the massive CityWay.

The Whitsett Group is finalizing a deal with Star parent Gannett Co. to purchase the 190,000-square-foot-building at 307 N. Pennsylvania St. and its 500-space parking garage, real estate sources said.

Virginia-based Gannett considered about a half-dozen offers on the building in early March and since has chosen The Whitsett Group’s plan, the sources said. Gannett put the building on the market in July after it determined the newspaper no longer needed such a large space.

Whitsett Whitsett

The proposal calls for 350 apartments housed within the Star building and another, new structure that would be built near the parking garage at the corner of Delaware and New York streets. The project also would include a small retail component that might attract a restaurant or bank. It’s unclear how much the project might cost.

The structure actually is four different buildings made to look like one with the addition of a brick façade.

Part of the southern portion of the building—a small wood structure with a different floor elevation—is the only piece slated for demolition. Whitsett does not plan to keep the building’s brick façade.

A non-disclosure agreement limits what the locally based developer can divulge about its proposal, noted company founder Joe Whitsett.

The company is working with local architecture firm Browning Day Mullins Dierdorf Architects on a preliminary design and may be ready to share more details in July, he said.

“Our intention is to not demolish the building,” Whitsett said. “I’m too much of a green developer to tear it all down.”

That’s contrary to what some real estate experts had anticipated.

Brokers at Summit Realty, for instance, predicted in a recent downtown market report that, due to reuse challenges, “the existing facility is expected to go the demolition route with the garage likely staying.”

Fellow apartment developer David Flaherty of Flaherty & Collins thinks Whitsett’s approach makes sense.

“Joe’s expertise is taking older buildings and turning them into apartments,” Flaherty said. “That wouldn’t surprise me at all if he tried to save the building. There are financial benefits to doing that.”

The Whitsett Group, primarily an affordable-housing developer, likely will need to find a partner to raise funds for the project, according to real estate sources who say Browning Investments is a prime candidate.

“We’re on our own right now,” Whitsett said. “Whether we bring someone in at some point, I don’t know.”

Officials at Browning declined to comment.

star-factbox.gifThe two firms have an existing relationship. A Whitsett-Browning team is one of six bidders vying to redevelop a portion of the former Market Square Arena site. And Browning executive Dennis Dye is leaving the company later this month to join The Whitsett Group as a partner. (See story, page 6.)

If Whitsett’s Star project is completed, it would rank among the largest apartment communities downtown, trailing only Riley Towers (525 units), Lockefield Gardens (493 units) and The Gardens on Canal Court (421 units), data from Tikijian Associates shows.

Whitsett declined to say how large the newly constructed building might be. But it’s unlikely it would rise above five stories—retail on the ground level and residential above—because building costs become too expensive.

What worked in 1963, when Riley Towers was built, doesn’t work today—largely because stricter building codes make the cost of high-rise residential developments nearly impossible to justify, real estate experts say.

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 Whitsett’s favor is the prime location of the Star building—within shouting distance of both Monument Circle and Massachusetts Avenue, and a strengthening downtown real estate market.

“I think it will be a very welcome project for that area,” said Abbe Hohmann, president of Site Strategies Advisory. “I’m sure [Whitsett will] do a nice job on the aesthetics.”

The Whitsett Group already is familiar with the area. It’s 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 solves the problem.

Downtown, Whitsett also is partnering with Ambrose on a $16 million, 111-unit project dubbed 800 North Capitol Apartments, in addition to converting the 15-story Consolidated Building at 115 N. Pennsylvania St. into 98 apartments.

Founded in 2007, The Whitsett Group 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 Keystone Towers at Allisonville Road and Fall Creek Parkway and Winona Hospital at 3295 N. Illinois St.

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.

For tax purposes, the Star building is assessed at $21.3 million. The Assessor’s Office assigns a more than $14 million value to the land alone and just $7 million to the improvements.

The building was 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 was no asking price.

Real estate brokers say the Star is considering a few options as a new headquarters for its news operation: Artistry, the redeveloped former Bank One Operations Center by Milhaus Development; CityWay by Buckingham Cos.; Regions Tower; and BMO Plaza.

The Star has called the brick-faced offices on North Pennsylvania Street home since 1907.•

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  • Plenty of commercial a block away
    Maybe more commercial isn't being added because so much if readily available just a block or two away in all directions.
  • Affordable Housing 101
    What most of you don't get is that Low Income Housing Tax Credits (LIHTC) is simply a form of financing to get things built. Yes, there are restrictions as to how much you can make as to whether you can qualify to rent there, but it is very much a means to an end. The reason you are seeing so much "Affordable Housing" as opposed to market rate being built is that banks are still not financing them outright. When companies are granted LIHTCs they sell them on the open market to raise the capital to build. Lest we forget, CityWay wouldn't be built if it hadn't been for a city loan. So, the bottom line here is that there wouldn't be so many developments right now if it wasn't for government intervention through tax credits or loans. Of course, all of you complain about that, too. So, there really is no way for to win -- unless you are all happy that these buildings and lots remain empty. Obviously, things are changing, and banks are not being as stingy. However, I would still rather see things being built than nothing at all.
  • Hoosier Pete
    I couldn't help but laugh at your post. You obviously neither live or work downtown. Completely off base, sorry. Simon Dupree, I was nodding in approval while reading yourn post until the quizzical line about " what will crush downtown is all the old buildings that need upgrading". Really? What does that even mean? There should be no old buildings? Head scratcher, lol....
  • Parking
    Hey, with all this parking available, maybe the City and the courts can stop granting variances for the nonpermitted parking lot at Penn & Vermont.
  • Ken B.
    I think this is a great project that will help further build out the downtown core. This is not an easy project to tackle and I think Whitsett is doing about the best redevelopment possible with the existing structure. I also commend them for using the former printing press area for additional underground parking. This gives them a total of 700 parking spaces, including the current garage, which can support not only this project but also the American and Consolidated buildings where they are redevolping apartments as well. Hoosier Pete...how do you think a dynamic downtown is built?? First a city must help build the amenities to attract residents and then exciting neighborhoods are built as people desire to live there. No downtown is just automatic, not even Austin or Portland. They happen because you build it into a place people want to live. Indy has already been named recently in a couple of national publications as having one of the top 10 downtowns in the nation. With all the new developments coming online, I only expect that recongnition to grow even more. I think in 10 years people will look back and realize how much amazing change has taken place in this emerging city.
  • Phone text
    I realize my grammar was horrible. Typing on phone is pain. All still valid points.
  • Hoosier Pete Your Wrong
    Hoosier Peter I'm a young lawyer in tune with what neighborhoods people my age will live in with decent salaries. There are really only 3 to 4. Downtown is one of them and there aren't enough high quality apartments to service everyone that doesn't want to buy downtown, but want to live downtown for a few years before they buy in Meridian Kessler or the burbs. This place will be sold out like the cosmo, waverly, city way and other higher end apartments. What will crush downtown is all the substandard old buildings that need renovated.
    • Dream on, Faux Sophisticates
      I know you're all in love with downtown, but seriously, this is going to blow up. Everybody's putting up units downtown but there are precious few jobs downtown. Walk around downtown at noon when there's no convention in town. It's a ghost town. Similar sized cities like Portland, Austin, and Minneapolis have a vibrancy that is missing here. Overbuild downtown and you'll turn it into another Indy neighborhood full of abandoned units. I get that you all want to think you live someplace cool, but you don't. The numbers bear it out. Too much volume coming on line will be an unmitigated disaster for the core, which soon enough will be just another festering sore of a neighborhood like pretty much everything else in Marion county. Just saying...
      • great news
        Folks, this is a HOME RUN. Great win for the City, downtown and Mass Ave. Market rate, high end apartments bringing more residents and vitality downtown. $1.50-$1.75 is what the Cosmopolitan and CityWay are charging. Great density. Great design. What do you want, a vacant building???? Kudos to the Whitsett Group. More please.
      • Rex Insurance Company housed behind brick walls
        The most northern portion of the Star Building hides the old Rex Insurance Company started by my grandfather John Hubbard Toy. It was a fine early 20th century four-story building with a garage behind to the alley. I wonder if it is still under all that brick wall? My mother Betsy Smith Toy Hall ran the company until it was sold in 1977. If the brick walls are ever removed, I'd love to see if old Rex still stands with its own brick walls.
      • Big building, small component
        I think it's wrong for such a massive structure to only have a "small retail component that might attract a restaurant or bank." At least Cityway put retail on the first floor of most everything facing the major roads so far. With all of the housing along that corridor, they need more commercial. Such a shame and I can't say that I am surprised. *sigh*
        • Market rate vs. subsidized
          I hope that it is a market rate development. The more market rate units that get developed, the more affordable it will be for everyone. It is a clever redefinition of the word "affordable" that it is now used in place of the word "subsidized". All housing is affordable to someone, and so-called "affordable housing" is not affordable to everyone. Perhaps the even better term for these LIHTC projects is to call them income-restricted apartments, since the ongoing rent isn't subsidized (unless they also go the Section 8 route, which they can). Although HUD does set a maximum rent level for the units, the maximums are sometimes fairly high compared to Indy market rates, although certainly not at market rate for new downtown apartments. It is subsidized though in that the developer has received a huge upfront investment from investors who will reap the benefits of the tax credits.
        • Market rate vs. affordable
          Here's what the Indianapolis Star says on its website about this development, which should help to answer the question about whether it will be "affordable" or "market rate": "The Whitsett Group, which has recently branched out from affordable housing to market-rate apartment development, intends to construct three new five-story apartment buildings on the four-acre site between Pennsylvania, New York and Delaware....Knoble said the developer plans to rent the units at market rates of $1.50 to $1.75 per square foot. The mix of studio, one-bedroom, and two-bedroom units hasn’t been decided, he said."
        • Affordable v. Subsidized
          The thing that is really bothering me is how the term "Affordable Housing" now automatically means "Subsidized Housing". What ever happened to the American Dream?
        • Trust me, I've looked and live downtown
          First of all, cleary some people missed this line, “The Whitsett Group, primarily an affordable-housing developer...” There is so much affordable-housing in Indy that it artificially inflates the market rate – I wish I knew the percentage of market-rate vs affordable-housing apartments in the downtown area. Any middle-income, young professional who has been apartment hunting in Indy knows exactly what I’m talking about.
        • American Building Is Market Rate
          Why are there so many comments about this being an affordable housing project? The article makes no mention of it being affordable housing. The American Building is market rate, the 800 Capitol project is mostly market rate. Why is it up to developers to set rent below market value? All of these "young professionals" don't get housing handed to them, rent what you can afford until you can afford to live somewhere better. There is clearly a demand for the current rent level. If the properties sat vacant, the the "market rate" would naturally lower.
        • article
          To all the commenters saying the article doesn't say it will be affordable housing....Has Whitsett EVER built a development that is not affordable housing??? Its what they do!
        • affordable housing
          Granted, given the article, it is an assumption that a Whitsett project will be affordable housing. Reasonable assumption given the developer. Comments so far are simply encouraging this project to go market rate vs. subsidized. And that it be built/priced at a mid-point rental rate to attract a more diverse population - a mid-point demographics if you will- to enable the younger professional who wants to live/work/play in downtown Indy to be able to afford it. Some cool new developments are popping up downtown - that hope to attract this employee demographic.
        • Maria!
          You just don't get it.... sigh. And could someone please point to the part of the story that said ANYTHING about this being developed as affordable housing?
        • Sigh....
          Ugh, not more "affordable housing." You know why there are so many empty store fronts downtown and hardly any retail? Its because of all the people who live downtown in government subsidized housing. Enough is enough.
        • Why...
          ...does everyone instantly assume that this is going to be affordable housing and not market rate. P.S. Its called market rate for a reason. It's the rate that careful analysis has shown the market will bear. Obviously there are plenty of people who can afford all these apartments that many of you claim to be priced out of because they're mostly filled and continue to come on line. Why would anyone develop a project to fill it with apartments that earn only a percentage of the rental income they reasonably could?
        • No More Affordable Housing!
          I couldn't agree more! In a city that is thriving with possibilities. Its disheartening that everywhere we turn we are putting up AFFORDABLE HOUSING just because you get tax breaks. For the love of God rethink this plan.
        • It's already done
          The parking garage in question is already on site--you would have them pull down an existing garage so it could be moved underground.
        • living downtown
          I am sick and tired of all the low income housing going up downtown. Where is the housing for young professionals????
        • downtown pricing options
          Props to Young Professional who speaks for many of us who would like to live downtown but options are just not there - either we can't afford the "executive" digs popping up or we earn just a tad too much to qualify for Uncle Sam's "affordable" housing. City Leaders - if you want your downtown lifestyle to flourish via the milleniums... who REALLY want the more urban lifestyle, give us some regular housing that is still affordable. Whitsett/Ambrose have developed a real sweet gig with the subsidized housing.
        • Stop building slums
          Whitsett, if you take this prime downtown location and try to put in yet another low-income housing project, I will scream. Why am I the only one that seems to want downtown to develop into something NICE? PS don't call me some ignorant Carmel dweller who is afraid of diversity; I live downtown and there is hardly any decent housing for the middle class.
        • Downtown Can't Afford This Project
          Affordable housing is not a good fit for a developing downtown. Most unhappy that luxury apartments are not contemplated; I might have wanted to live in the location. Too bad.
        • Please no more affordable housing downtown
          I sincerely hope this project is NOT developed as affordable-housing, but priced appropriately for young professionals – there aren’t enough options downtown that are actually in our price range. A demographic that’s vital to the future of the city is being priced out of the market.
          • 10th & Central
            I agree about the 10th & Central building. I don't know what IHPC was thinking. It's as if they said "Well, we can't expect or demand a decent design for the new building, so we'll obscure it by setting it back a bit with a parking lot in front." As I believe the kids say today, "epic fail!" I sure hope they do better on this project when it comes to the new building. It looks like they did a great job restoring the old building there at 10th & Central though.
          • 10th & Central
            While I am delighted that these cats are cleaning up and repurposing all these properties - I hope they do better than the new building at 10th & Central. FULL DISCLOSURE: I have not been inside nor have I spent any time up close - but as the casual passerby, this design should have never been allowed. It's flat, with a small parking lot right on Central. Window scale/placement/massing pales in comparison to the original building right next door. To me, it looks like it was just pulled from a catalog of plans and dropped on the land. Let's hope Whitsett and Browning Day can will this into a great asset for the city. I understand that design is subjective and also understand how tight budgets are to make these projects profitable...
          • Underground Parking Perhaps
            I wish the plan would call for the parking garage to be underground...

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            1. why oh why does this state continue to elect these people....do you wonder how much was graft out of the 3.8 billion?

            2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

            3. How many parking spaces do they have at Ironworks? Will residents have reserved spaces or will they have to troll for a space among the people that are there at Ruth Chris & Sangiovese?

            4. You do not get speeding ticket first time you speed and this is not first time Mr.Page has speed. One act should not define a man and this one act won't. He got off with a slap on the wrist. I agree with judge no person was injured by his actions. The state was robbed of money by paying too much rent for a building and that money could have been used for social services. The Page family maybe "generous" with their money but for most part all of it is dirty money that he obtained for sources that are not on the upright. Page is the kind of lawyer that gives lawyers a bad name. He paid off this judge like he has many other tine and walked away. Does he still have his license. I believe so. Hire him to get you confiscated drug money back. He will. It will cost you.

            5. I remain amazed at the level of expertise of the average Internet Television Executive. Obviously they have all the answers and know the business inside and out.

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