The Indianapolis Metropolitan Development Commission this afternoon approved a city plan to partner with a private developer on a $65 million downtown redevelopment project adjacent to the former site of Market Square Arena.
The plan, approved by a 7-2 vote, allows the city to enter into a project agreement with the developer, an entity called Market Square Garage/Ops Partners LLC. The developer will receive a 10-year tax abatement worth about $6.6 million in exchange for investing about $65 million for multiple phases of the project and creating about 52 jobs.
Plans for the mid-rise project call for 600 apartments and 37,000 square feet of retail space at the long-vacant former Bank One operations center, which occupies a full city block between New Jersey, East, Washington and Market streets. As part of the deal, the city plans to buy an adjacent, 1,600-space parking garage formerly operated by Bank One for $18.5 million.
“We feel strongly that the market is there for residential retail units,” Deputy Mayor Nick Weber said. “But obviously, there is a fair amount of turmoil in the capital markets.”
To help protect its interest in the project, the city is requiring the developer to show within 90 days that it can finance the project. It then must begin construction within nine months and have the project mostly complete within 30 months. If it cannot meet the obligations, the city will again seek proposals for the project.
About $30 million would be spent to renovate and reuse the 150,000-square-foot operations center, and up to $35 million would go toward development on the surrounding land.
The developer would buy back 600 of the garage spaces from the city, and the remaining spaces would be available for public use at market rates. That revenue would repay the city’s garage investment.
The city would retain an option to locate a public facility on the western half of the property. A project timetable estimates the city and developer will close on the garage deal and the developer will secure a loan from Regions Bank by July 31.
The deal does not include two parcels that made up the former site of Market Square Arena, but city officials hope the adjacent development will help spur development interest in the MSA site, particularly since the massive Market Street ramp to Interstate 65 in the area was recently torn down.
Its removal, coupled with the new I-65 interchange on East Washington Street, should help create a new downtown corridor on the east side.
Deborah Long, owner of Circle City Pizza on Market Street, opened her eatery in 2001 and has been waiting for the area to be developed ever since. She spoke in favor of the redevelopment project.
“We have been an island at the end of this street for seven years,” she told commission members. “If you don’t get this going soon, little companies like me aren’t going to make it.”
But a handful of others spoke out against the project, complaining that the public had just 48 hours to digest the details. The city announced the project on Monday.