National City Center nabs Veolia

January 7, 2008

Paris-based utilities giant Veolia Water has reached a deal to move its North American headquarters into the 16-story National City Center, providing a boost to a downtown building still reeling from the loss of Simon Property Group Inc.

Veolia will take about 35,000 square feet on the 14th floor of the 625,000-square-foot building at the southwest corner of Washington and Illinois streets. The building houses offices, shops, restaurants and the Hyatt Regency hotel.

The company is taking space previously occupied by Simon. The mall giant left 182,000 square feet when it moved into its new headquarters nearby.

"It's a nice deal, and it definitely puts a dent in their vacancies, but they still have a lot of space to lease," said Sam Smith, CEO of locally based Resource Commercial Real Estate. "They still have a lot of work to do, and downtown is still soft."

Still, the lease is a small victory for downtown, a market where most office deals of late have involved existing tenants playing musical chairs.

Veolia currently has its North American headquarters in Houston. The company, which has managed Indianapolis' water system since 2002, operates more than 90 water-treatment plants and more than 190 wastewater treatment plants, treating 2.2 billion gallons per day, according to Veolia's Web site.

It announced in June that the headquarters would move to the Indianapolis area--a shift that will create 100 local jobs, including 70 in finance, accounting, information technology and technical services that will pay an average of $100,000. It has 2,900 employees in North America, including about 375 in Indianapolis.

Veolia is slated to receive $1.6 million in state and local economic development incentives. At the time of the announcement, Veolia had not decided where the headquarters would go.

The National City Center space should be a good fit, thanks to its proximity to downtown amenities, said Jon Owens, vice president and principal in the local office of St. Louis-based Colliers Turley Martin Tucker.

Another reason: The sudden vacancy left by Simon means the building owner, Massachusetts-based HRPT Properties Trust, was motivated to give a new tenant a good deal. The departure left the building 28 percent vacant after years of nearly 100-percent occupancy.

"I've always liked that location," Owens said. "No one ever thought they would backfill all of the Simon space in one fell swoop. To knock out 30,000 to 40,000 square feet at a time is pretty much what I expected would happen."

The building is in the midst of a $14 million face-lift that is adding 10,000 square feet of meeting space, a new restaurant, a Starbucks, and a new hotel lobby and lounge.

Veolia's space is in the building's east and south towers and will be connected by a new pedestrian bridge, said Robert Wease, an architect with locally based A2SO4, who is working on the project.

Veolia employees will begin moving into the new digs in March, said company spokeswoman Angie Dye. Although some of the headquarters staff will transfer from Houston, most will be hired locally, city officials said in June.

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