One of the Indianapolis area’s largest industrial parks is experiencing robust construction activity that includes more than just distribution centers.
AmeriPlex-Indianapolis south of Interstate 70 on the west side contains 6 million square feet, most of industrial space occupied by such companies as Allison Transmission and Pepsi Co.
But the industrial park—the area's third largest, according to IBJ statistics—soon will be home to a parking facility and 130-room Holiday Inn hotel.
All told, including a couple of distribution centers, roughly $75 million of construction is occurring at AmeriPlex. And that figure could double if work starts on two more projects in the spring, said Chris Wilkes, a partner of South Bend-based developer Holladay Properties.
“In the 11 years I’ve been down here,” he said, “I haven’t seen a year quite like this.”
Wilkes attributed the brisk activity to a recovering economy and a dwindling number of parcels available in surrounding industrial parks.
The industrial sector is rebounding particularly well, as shrinking vacancy has prompted construction of several speculative buildings in the market.
Multi-tenant vacancy rates in the third quarter stood at just 4.4 percent, while net absorption through the first nine months of the year rose to nearly 2 million square feet, according to Cassidy Turley statistics.
At AmeriPlex, Atlanta-based Industrial Developments International Inc. completed a 794,608-square-foot speculative building in March. California-based online electronics retailer Newegg Inc. plans to occupy more than 410,000 square feet of the new space.
IDI also is building a 464,000-square-foot spec building on 26 acres that should be finished in the spring. It then has plans to begin an 887,000-square-foot facility on 53 acres within the industrial park.
In addition, Memphis-based Federal Express in the spring is set to complete a 330,000-square-foot building on 38 acres. The facility should be operating by September, nearly doubling the size of its SmartPost distribution operations on the city’s southwest side.
SmartPost is a FedEx unit that ships small, low-weight packages through the U.S. Postal Service. Its existing SmartPost facility operates in 180,000 square feet about 2 miles away at 5454 Decatur Blvd.
And upstart Dallas-based Specialty Bakery LLC plans to begin construction in the spring on a 227,000-square-foot production and distribution facility on 27 acres in the Purdue Research Park piece of AmeriPlex.
By this time next year, the addition of Newegg, FedEx and others should add about 300 jobs to AmeriPlex operations, said Andrew Morris of Summit Realty Group, which is listing IDI’s space within AmeriPlex.
The IDI projects are the first to take advantage of the automatic 10-year real property tax abatement established in 2009 by the city of Indianapolis for World Connect sites at AmeriPlex, envisioned as a seven-building complex on 200 acres.
The World Connect project is expected to add about $84 million to the tax base over 10 years. The abatement is estimated to save $13.2 million in property taxes over that span.
“What has significantly driven this latest development is the ability to apply one more layer of incentives to level the playing field so to speak for that location and that park,” Morris said.
City officials say the abatements are necessary to attract industrial development to AmeriPlex, which sits between Interstate 70 and Indiana 67. Since Holladay developed AmeriPlex in 1998, incentives offered by Plainfield and Hendricks County have swayed industrial developers to build west of Indianapolis.
Meanwhile, the growth of AmeriPlex and its proximity to the airport spurred the decision to build another hotel in the park, Wilkes of Holladay said.
Holladay and Schahet Hotels Inc. are developing the $12 million Holiday Inn, which should be finished by next fall. Schahet also owns the 110-room Hampton Inn and 140-room Hilton Garden Inn, both of which opened in 2008 and are in AmeriPlex.
Holladay had held a Holiday Inn franchise for a few years but was waiting for the right time to start the project.
“As 2012, came to a close, there certainly seemed to be evidence that the [hotel] market was rebounding,” he said. “We always knew it would come back.”
Finally, a $15 million, 2,000-spot off-airport parking facility under construction by Ohio-based Chavez Properties should be finished by the end of the year.
That project drew the ire of the airport’s authority, which filed suit against Chavez seeking to stop it. Having lost a fight in Marion Superior Court, the authority in November 2012 took the case to the Indiana Court of Appeals. The authority, however, withdrew the appeal in May.