The 500 Festival organization plans to move out of its signature downtown office building early next year in favor of a smaller footprint in the Circle City Industrial Complex east of the I-65/70 north split.
The not-for-profit group’s plan comes after it quietly sold its headquarters building at 21 Virginia Ave. to Tom Rector, a local entrepreneur and owner of Indianapolis-based ScreenBroidery, in November 2022. The 500 Festival is one of three tenants in the fully occupied, five-story building, occupying 9,000 square feet across two floors.
After its move, the organization expects to occupy about 7,000 square feet of office space on the southern end of the industrial complex at 1125 Brookside Ave.
500 Festival Inc. was founded in 1957 to organize civic events celebrating the Indianapolis 500, which today include its annual mini-marathon and downtown parade. It already leases about 30,000 square feet on the opposite end of the industrial complex to store floats and other materials for the parade. It moved its storage from the south side of Indianapolis last year.
The 500 Festival has not finalized its lease agreement with CCIC’s locally based owner, Teagen Development, but plans to do so in the coming months, according to Bob Bryant, CEO of 500 Festival. It anticipates moving in the first quarter of 2024.
“We’re close, but there are still a few things to do,” Bryant told IBJ when asked about negotiations. “If we don’t get [a move] done by the first quarter, then we’ll probably be waiting until after May.”
The financial terms of the pending deal were not disclosed, but the Circle City Industrial Complex advertises lease rates of $12 to $18 per square foot per year on its website.
Rector purchased 21 Virginia Ave. and its parking lot for $3.2 million, along with an alley separating the parcels for another $345,000 from a Carmel-based holding company. The sale price for the building and parking lot is only marginally higher than what the organization paid to buy the parcels from Carmel-based GSA Investment Co. Inc. in 2013.
Bryant said the 500 Festival has put the proceeds of the sale into an investment account that will be used to help fund the festival’s operations. The 500 Festival earlier this year launched a $5 million capital campaign to fund several initiatives, with about $3 million raised to date.
He said the sale stemmed from the organization’s desire to get out of property management and instead keep the Festival’s focus on its own operations. The move has reduced overhead for the organization as well, since it no longer has to pay for marketing to attract tenants or costly maintenance expenses.
“There’s a lot that goes into the repair and maintenance of an office building—things that aren’t necessarily in the wheelhouse of where we wanted to spend our time or money or efforts,” Bryant said. “It made sense for a period of time, but … it wasn’t a situation where we were ever going to occupy all that space; that was never really a goal.”
He said the move also “keeps us in the heart of the city” and close to all the events the 500 Festival produces each year, including the parade, the mini-marathon and Kids Day.
“But it also allows us to be a lot more efficient—to not serve as landlords but instead create a really affordable lease opportunity for [our] office and warehouse operations moving forward,” he said.
The 500 Festival, like many businesses, shifted to a hybrid work schedule coming out of the pandemic. Most employees work downtown three or four days per week and from home on the others—particularly in the second half of the year, after most of the organization’s events have been completed.
Teagen Development owner Larry Jones confirmed the 500 Festival plans to move to CCIC and would occupy the space previously used by the Winter Farmers Market before it moved to The AMP at 16 Tech in 2021.
The move to the North Mass area will put the 500 Festival among more than 175 artists and businesses that occupy space at Circle City Industrial Complex, which sits less than a mile northeast of The Bottleworks District. The move also places the organization in an area that’s attracting new investment, with the opening of Box Factory in 2021, continued improvements in the complex itself—to the tune of $25 million—and multiple apartment and office projects set to sprout in the next few years.
As for the 500 Festival building, which was constructed in 1917 and renovated in 1963, Rector said any plans for redevelopment are “in a holding pattern” for the next few years.
But he’s keeping a close eye on projects nearby, including what becomes of the former Marion County Jail property, the City-County Building and numerous other properties within the Mile Square, as he considers long-term plans for the property.
“There are some talks about possibly putting in a parking garage or doing some renovations to the current structure—but those are loose discussions right now because we’re waiting to see what happens with all of the development around us and what makes the most sense,” he said.
Elaborate signage for the 500 Festival already has been removed from the building’s exterior. But Rector said there are no plans to get rid of the Eva Kor mural on the southeastern face of the property, and he’s looking for ways to honor the property’s historical use by the Railroadmen’s Federal Savings and Loan Association.
Rector said he’s also interested in some other properties across the city, particularly along an unspecified segment of North Meridian Street, where he would like to develop condominiums or apartment projects.
“That’s another investment opportunity, with the ability to improve some of the boarded-up buildings that are in that corridor that gets you to downtown Indianapolis,” he said. “I think that can always be improved, and we have a lot of work to do in some areas.”