A who's who of local firms is planning bids to redevelop the Market Square Arena site with mixed-use projects that would
depart sharply from previous efforts focused on residential.
The plans this time around are expected to include retail space, offices, apartment units and condos backed by high-profile local developers that didn't bid before-including Duke Realty Corp., Mansur Real Estate Services and Lauth Property Group.
Members of two development teams that plan to bid confirmed their intention to IBJ: Duke will partner with Kosene & Kosene Residential and Pedcor Development Co., and Mansur will partner with Lauth and Hearthview Residential Inc.
The interest of big-name developers with lengthy track records is an encouraging sign for the city and Mayor Bart Peterson.
"The strength of those teams speaks volumes," said Jon R. Owens, senior vice president and principal at the local office of St. Louis-based Colliers Turley Martin Tucker. "This project is as important as anything we've seen since Circle Centre getting out of the ground."
The former home of Market Square Arena, just east of the City-County Building, has been a parking lot since the city tore down the arena in 2001. A $140 million plan for the site that included a 31-story condo tower fell apart in November after the developer spent two years trying to pre-sell enough units to secure financing.
The city issued a new request for proposals in February, this time banning a pre-sales requirement. The project must include a tower of at least 14 stories and retail uses on the ground floor, but there is no requirement for residential. The cost for the four-acre site, which could be subdivided, is $6.2 million. Proposals are due April 18.
"The folks from the city can't afford another misstep," said Gerry Kosene, managing partner of Kosene & Kosene, which has built several residential buildings near the site. "We don't want to present something that doesn't have a strong chance of being successful."
That's why Kosene is designing its project, which would be up to 20 stories tall, in partnership with Duke and Pedcor. Duke would be the contractor and bring expertise in vertical-rise construction that Kosene lacks. Pedcor, which has built extensively in downtown Carmel, likely would focus on rental units.
The team also has hired New York-based Ehren Krantz & Eckstut, the architects that designed Circle Centre mall and the Artsgarden.
Kosene did not have a cost estimate, but he said the city would have to kick in incentives for the project to go vertical. The city has played a big role in several big downtown projects in recent years. For instance, it offered $24 million toward the $100 million Conrad Indianapolis hotel that opened last year, and recently agreed to pitch in $48.5 million for a $250 million campus of downtown hotels that includes a 1,000-room JW Marriott.
The Mansur team is in the early stages of developing its proposal and is not ready to provide details, company principal Cornelius "Lee" Alig said. Mansur is partnering with companies that have varied areas of expertise to give it the best shot at delivering what the city wants.
"Not any one single developer can probably address all of the requirements in the current RFP," Alig said.
He said the lessons learned from the previous failure and the time elapsed could help deliver a better project. The Cultural Trail, a $50 million downtown bike and pedestrian path, eventually will abut the project, and interstate on-ramps along Market Street will be removed, making the corridor more welcoming for business owners and pedestrians.
The team will offer an "exciting" proposal, promised Jim Thomas, a Hearthview partner. He would not elaborate. The Carmel-based company focuses on residential development and has done work downtown, including a condo conversion at the Indianapolis Athletic Club.
"We were almost selected last time and we expect to offer an equally compelling proposal this time," Thomas said.
Real estate observers said Kite Realty Group also might be considering a bid, in partnership with Buckingham Cos., but Buckingham President Brad Chambers said through a spokesman that his company has no interest in bidding. And a Kite official did not return phone messages by IBJ's deadline.
Some developers, including Halakar Properties, picked up copies of the RFP but said they do not plan to bid.
Another local company discussed as a likely bidder, Flaherty & Collins Inc., also has decided not to compete, said Jim Crossin, the company's vice president of development. Flaherty, which is building a 50-story condo tower in Charlotte, N.C., was an unsuccessful bidder last time.
"The biggest reason [we won't bid] is, there are some other developers submitting proposals that we may be partners with in the future on other projects and don't want to compete with them," Crossin said.
The last developers to take a shot at the site, Market Square Partners, proposed a complex with 400 condos and 75,000 square feet of retail. That partnership included former deputy mayor William Shrewsberry and Columbus, Ohio-based Smoot Construction.
The latest RFP would allow for a variety of uses, from office and retail to a hotel or apartments. An apartment component could make it easier for developers to line up financing, real estate observers say. The city also could agree to lease office space to help get the deal off the ground and relieve crowded conditions at the City-County Building.
Despite past failures, there is no lack of confidence in the site, or the downtown market, said Terry Sweeney, vice president of real estate development for Indianapolis Downtown Inc.
"The site is very good," he said. "The level of interest expressed inside and outside the market bears that out."
A mixed-use project might be more feasible than all residential for the site, but it also requires more players, said Chris Seger, an executive vice president with Duke.
"This time out, people have taken a little more creative approach to it," Seger said. "It's more complex to do, but the end result, if done right, is a substantially more dynamic project."