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Buckingham makes big plans for Carmel: Developer awaits OK on 116-acre urbanist development

February 20, 2006

The makeover of midtown Carmel, driven by the ambitious City Center master plan, could get a boost from a nearby development that could rival the project in scope.

Local real-estate developer Buckingham Properties will present its proposal to the Carmel Plan Commission Feb. 21 to transform the 1960s-era Mohawk Hills apartment complex and its golf course into a modern urbanist neighborhood.

The development, called Gramercy, could take a decade and hundreds of millions of dollars to complete.

The 116-acre tract at 126th Street and Keystone Avenue would play a critical role in advancing Carmel's vision to create a new downtown along Range Line Road, by providing an eastern corridor into Old Town.

"What Buckingham is pulling off here is brilliant, because that entrance has the potential to be the new grand entrance to Carmel from the east," said Ross Reller, vice president of Meridian Real Estate. "I am as enthusiastic about the Buckingham project as I am about City Center."

Its Gramercy name is derived from the French expression reflecting gratitude or surprise and borrows from the upscale Manhattan neighborhood dating to the 1830s.

The traditional urban neighborhood design features town homes, apartments, hotels, offices, civic spaces, parks and retail space for restaurants, cafes or coffee shops.

British architect David Oliver designed the center plaza highlighted by a clock tower.

Buckingham purchased the property containing 564 apartment units and a ninehole golf course in 2004 from a Chicago group for roughly $30 million.

David Leazenby, the company's vice president of land development, declined to divulge how much Buckingham will invest in the project. But real estate developers said the cost likely will be hundreds of millions of dollars.

Pending approval from the Carmel City Council, work could start in 2007 and would be finished in eight to 12 years. Development on the golf course would begin first, followed by demolition of the apartment buildings in phases, to maintain residential housing, Leazenby said.

Higher density

Plans are unclear how many units the new development would feature. But the high-density urban feel likely means more than what was allowed under the four-unitper-acre rule enforced in the late 1960s when the apartment complex was built.

As city space for home construction shrinks, Carmel officials are exploring alternative housing options similar to what Buckingham envisions.

"We're extremely excited about what they're proposing," Carmel Plan Director Mike Hollibaugh said. "We're really refocusing our planning efforts to look at our urban core between Keystone and U.S. 31, and trying to make sure we're prepared for redevelopment."

The public/private development that is City Center runs along the west side of Range Line between 123rd and 127th streets and encompasses a number of uses. Similar to Gramercy, they range from apartments, condominiums, shops, dining, office and hotel.

The City Council last year approved financing for an $80 million performing arts center to be built on the property.

Buckingham's previous housing developments in Carmel include the Providence at Old Meridian, Traditions on the Monon at 136th, and Monon & Main.

In addition, Buckingham owns and manages the Governor Square apartment community, and the former Arbor Apartments, which was incorporated into the plan for Providence at Old Meridian.

"What we saw with Mohawk Hills was an opportunity to improve a property that was suffering from some out-of-state ownership," Leazenby said. "It's an opportunity to tie into what Carmel is doing and complement City Center and Old Town."

Buckingham since has invested $500,000 in Mohawk Hills to remodel the clubhouse, tear down the carports, and upgrade landscaping. Current occupancy is about 90 percent, Leazenby said, and many tenants are renewing their leases in anticipation of the makeover.

Changing course

Although the number of rounds played on the public golf course at Mohawk Hills has steadily dropped the past five years, Leazenby said that factored little into the decision to redevelop the property. The course will remain open for the entire 2006 season.

More public courses are succumbing to development as central Indiana becomes saturated with golfing options. In Hendricks County alone, Clermont Golf Course, Brownsburg Golf Course and Hendricks County Golf Course all have closed.

In Fishers, a group of investors called Britton Park Development LLC bought Britton Golf Course last April for $16 million. Bordering State Road 37 and East 131st Street, the 104-acre course is the largest piece of prime property left along a stretch of highway where much of the land has been consumed by commercial construction.

Plans call for the property to someday accommodate 600,000 square feet of shops and other street-level businesses, plus offices or town homes. Office buildings and an assisted-living center are planned as well.

When completed, the project would be the largest commercial, office and retail development in Fishers and would be bigger than Clay Terrace, the 65-acre upscale, old-style shopping mall at U.S. 31 and 146th Street in Carmel.

The loss of certain courses is not necessarily detrimental to the sport, said Mike David, executive director of the Indiana Golf Office.

"From a supply-and-demand side, we're lopsided right now," he said. "At Mohawk Hills, when you look at the property value, you have to seriously consider the best use of that property."

Going public?

Founded in 1984, Buckingham has developed more than $225 million of real estate and owns and manages more than 9,000 apartment units in Indiana, Illinois, Kentucky and Ohio.

The company recently agreed to purchase locally based Century Realty Trust for $60 million. Century's investors have pushed publicly for nearly two years for a sale, claiming it was too small to exist as a public company.

In turn, Reller at Meridian said a sale could give Buckingham the leverage it needs to go public as a real estate investment trust.

Citing locally based Duke Realty Corp., Simon Property Group and Kite Realty Group Trust as examples, Reller said Wall Street has been kind to Indianapolis public real estate developers.
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