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Kite flies third plan for Nora project: Developer scales back condos, dangles Whole Foods Market

November 7, 2005

Developer Paul Kite is back for a third round in his battle with Nora residents to develop a condominium/retail project on the last undeveloped corner of 86th Street and Keystone Avenue.

In plans submitted to the city and to neighborhood groups, Kite's PK Capital LLC has drastically trimmed the number of condo units planned for the 13 acres, but reintroduced the concept of a specialty grocery on the site.

PK is working to bring the state's first Whole Foods Market to the site, although no lease has been signed.

Neighborhood groups, which twice before have voted to oppose Kite's plans, may not be swayed, however.

"The developer heard us in regard to the [condo] towers, but failed to embrace our concerns in regard to the commercial and retail [space]," said Duane O'Neal, an attorney representing the nearby Driftwood Hills Neighborhood Association. "This area is designated a critical area in the [Marion County] comprehensive plan and spells out that commercial and retail [uses] should not be allowed."

The latest version of plans for the site calls for just 31 condos, compared with almost 200 in the previous two versions. The twostory town houses would be built on the western and northern edges of the site, nearest neighboring homes.

An "upscale specialty grocery" included in the original plans submitted this spring was cut out of the second version after neighbors protested the development on the grounds it would create traffic and other infrastructure problems in nearby single-family residential neighborhoods.

PK Capital revised its plans, eliminating the grocery store and all but 10,000 square feet of neighborhoodoriented retail space. Neighbors and city planners continued to oppose the development, citing the overall density of the project and the visual contrast between the planned eight-story condo towers and the singlefamily homes to the west.

Department of Metropolitan Development staffers recommended denial of the second version in advance of a scheduled Oct. 13 public hearing; that hearing was continued until Nov. 17 to allow time for PK Capital to submit new plans and for neighborhood groups to review them. The Nora Northside Community Council, which includes the Driftwood Hills group, was scheduled to consider the latest version Nov. 3.

In recommending denial of the second version, DMD staffers cited the Marion County Comprehensive Land Use Plan, including a Washington Township portion approved Oct. 5. That plan recommends residential development, preferably multifamily, with eight to 15 units per acre, and no new retail development on the north side of 86th Street.

The latest version has just over two residential units per acre, below the recommended density, but 60,000 square feet of retail, including a 50,000-square-foot grocery store.

"There was so much objection by the Nora Community Council, in particular, to the height of the buildings, we are trying to come up with something that would be a compromise with the neighborhood and Nora Community Council," Kite said. "We're trying to make a compromise but still make it work economically. The only way we were able to come up with a plan to do that is to limit the height ... and include commercial."

Whole Foods is an organic and natural foods retailer headquartered in Austin, Texas. The chain has expanded rapidly since it opened in 1980, going from 118 stores and $1.8 billion in sales in 2000 to an expected 175 stores and $4.7 billion in sales this year.

A Whole Foods spokeswoman didn't return a call seeking comment, but the company in the past has said it is interested in opening an Indianapolis store.

Kite said he believes bringing a Whole Foods to the north side of Indianapolis would be good for the neighborhood.

"It could help revitalize interest in living on the north side of Indianapolis, as opposed to downtown or Carmel," he said.

About a dozen of the 60 stores Whole Foods has planned are in mixed-use developments, many of them high-rise condo projects in urban areas, The Wall Street Journal reported earlier this year.

Typically, the grocer looks for an area densely populated with well-educated, affluent residents. Large urban projects, such as a 650-unit condo tower in Miami, deliver that audience to Whole Foods' doorstep. In such projects, the presence of the grocer has also boosted sales of condo units nearby.

In Indianapolis, the demographics at 86th and Keystone-the same intersection that houses Simon Property Group Inc.'s upscale Fashion Mall-are among the most attractive in the Indianapolis area, retail experts said. But if PK makes concessions on the site layout to gain approval, it could hinder the project's prospects for success.

"That's ground zero, but that doesn't always mean it's an A-plus site," said Mark Perlstein, a principal at Carmelbased retail brokerage the Linder Co. "Its success is contingent on access to the development and the overall layout and proposed tenant mix."
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