Marsh Supermarkets Inc. ended rampant speculation when it announced last September that it was buying the former Atlas grocery site at 54th Street and College Avenue and would build an Arthur's Fresh Market there.
Or did it?
Nearly a year after Marsh officials unveiled their plans, the former Atlas building slated for demolition remains standing, surrounded by a chain-link security fence.
"We were pretty sure construction would have started by now," said James Garrettson, president of the Meridian Kessler Neighborhood Association.
Marsh officials could not be reached for comment. But the company's zoning attorney, Michael Quinn, said he thinks there's progress behind the scenes that should set the stage for demolition by early fall. At a hearing this week, Marsh will seek a variance to allow alcohol sales.
"Marsh went ahead and closed on this project. They own it. I think they're committed," Quinn said.
However, construction of the Arthur's store is missing from a list of capital projects the company filed this month with the Securities and Exchange Commission.
Before the fiscal year ends in March, the company plans to build one grocery under the Marsh banner and renovate five existing groceries, according to the filing.
Under plans filed with the city earlier this year, Marsh said it would demolish the former Atlas store as well as the former CATH Inc. coffee shop and a vacant office building, clearing the way for construction of a 22,400-square-foot Arthur's.
The College Avenue store would be the third location for Arthur's, a smaller-format concept that features full-service meat and deli counters as well as prepared foods. In an SEC filing, Marsh said it plans to put Arthur's in neighborhoods that lack traditional groceries nearby.
The company is scavenging for new avenues for growth-it's entering the Chicago market this summer, for example-at a time its core central Indiana Marsh franchise is under siege by Wal-Mart and other well-funded rivals.
But its own financial firepower to fund expansion is shrinking, this month's SEC filing shows. In the quarter that ended June 25, the company, which operates 118 groceries and 160 Village Pantry convenience stores, eked out just $674,000 in profit on revenue of $410 million.
In a statement released Aug. 4, CEO Don Marsh said "results were not up to our expectations. We have identified a number of cost reduction and other profit improvement actions which we expect to implement during the remainder of fiscal 2006."
This summer, Marsh Supermarkets hired John Elbin as its chief financial officer. Elbin was CFO of the Indianapolis-based specialty-chemicals maker Lilly Industries Inc. before its sale five years ago.
One big challenge on his plate: Replacing or extending an $82.5-million credit line set to expire in February. As of the end of the quarter, the company had tapped $75 million, just $700,000 shy of the maximum it could borrow and still be in compliance with the covenants on the loan.
The filing shows the company has since made progress, whittling down the borrowing to $64 million by Aug. 2.
Marsh probably will get relief, said Mark Foster, chief investment officer for Kirr Marbach & Co. LLC in Columbus, Ind.
"In most cases, these lenders aren't interested in pulling the rug out from a company and taking away its source of funding. Then you have a much bigger problem," he said.
But that relief could come with a price. An uneasy lender, Foster said, "might tighten up restrictions or covenants so they have their arms around cash flow a little tighter."
Where does that leave the long-awaited Arthur's project? Let's hope still on track. Meridian Kessler residents endured two years of uncertainty after Atlas closed in 2002. They've had enough of speculation. They're ready for construction to begin.
Lampoon raises $10 million
A group of Indianapolis businessmen trying to revive the vaunted National Lampoon comedy brand have achieved a breakthrough: In a stock offering that closed this month, they raised nearly $10 million.
L.A.-based National Lampoon Inc. will use the money to repay debt, strengthen its management team and further efforts to transform itself into a major media and entertainment company.
"I think the company is in a stronger position than it has been in in over 20 years," said CEO Dan Laikin, an Indianapolis businessman before joining the company's executive ranks three years ago.
Laikin, brother of Brightpoint Inc. CEO Bob Laikin, is one of several Indianapolis businessmen who have poured millions of dollars into Lampoon in recent years, believing previous management had failed to capitalize on opportunities to exploit the brand. Another major Indianapolis backer is Tim Durham, CEO of Obsidian Enterprises Inc.
The offering broadened the company's ownership base and allowed it to list on the American Stock Exchange. National Lampoon already had been publicly traded but previously traded on the low-profile overthe-counter bulletin board.