The developers of the former Market Square Arena site this month touted an expected August groundbreaking for their high-rise condominium project, but glossed over the 90-day extension to its agreement with the city that was required to make that possible.
Developers of One Market Square a year ago negotiated an extension that gave them until May 1, 2006, to close on their purchase from the city of the first two acres of the four-acre site. In February, that deadline was quietly extended again, to Aug. 1.
Market Square Partners received the first extension after the development team failed to sell enough units to get the project off the ground. The team, made up of locally based Shrewsberry & Associates and Columbus, Ohio-based Smoot Construction, then brought aboard a Chicago-based developer and relaunched the project in September.
Even though the amended agreement with the city included various timelines, such as a year-end 2005 deadline to meet pre-sale requirements, city officials and the developers have indicated the May 1 deadline was the most important. In the last year, several officials have indicated the developers’ current run at the project would likely be their last chance before the city sought new bids.
“They told us May 1 was the deadline and there would be no more extensions,” said James J. Curtis Sr., a member of the city’s Metropolitan Development Commission. Curtis said he was not aware of the most recent extension.
That extension was necessary because of slow traffic through the One Market Square sales center during the winter months, said the project’s marketers and city officials.
“We’re coming into the spring and summer selling season,” said Kurt Flock of Flock Real Estate Group, which is marketing the One Market Square condos. “It’s a much better time to be selling anything, no matter what it is.”
Other downtown condo developers reported mixed results on their traffic over the winter months. Those with finished projects nearby and spring or summer move-in dates, such as Hearthview Residential Inc. and Kosene & Kosene Residential Inc., said traffic through their sales centers was strong in fall and winter.
However, developer Tony Page, whose eight-story Villaggio project at South and East streets is slated for completion later this year or in early 2007, said marketing of the 65-unit project virtually ground to a halt during the cold-weather months.
“We had horrible traffic over the winter,” Page said. “The last three weeks it’s really picked up, though.”
The 225 units in the 31-story Market Square tower range in price from around $200,000 to $1.7 million. In addition to selling those units, Flock for the first time is marketing the 45 loft-style condos in two, four-story buildings on the Market Square site. Construction of both the midrise buildings and the tower is expected to cost $100 million.
“[The launch of marketing] of the midrise units is really going to create momentum,” predicted Terry Sweeney, vice president of real estate at Indianapolis Downtown Inc.
In December, Flock and representatives of Mesa Development LLC, the Chicagobased developer hired by Market Square Partners to help redesign the project, told the city’s Metropolitan Development Commission that interest was high in the redesigned floor plans and pricing structure of the tower. They also predicted a groundbreaking this month.
At the time, they said between 50 and 60 units in the tower had been reserved with refundable deposits. As of March 8, 52 units have been reserved, the developers said.
Lenders require contracts-binding agreements secured by a non-refundable down payment-on 40 percent, or 85, of the condos in the tower to be sold before developers can obtain construction financing. Developers acknowledge not all of those with reservations will convert to contracts.
Market Square Partners estimates it will need to pre-sell about half of the 45 mid-rise units before the partnership can obtain construction financing. Those units will be priced from $136,000 for units earmarked for affordable housing to more than $600,000.
Flock and the developers were to launch the next phase of marketing March 11 at the sales center at 251 E. Ohio St.