Buckingham Cos., the developer of downtown’s CityWay project, is preparing to build a $110 million second phase that would include a nine-story apartment tower.
The $155 million first phase of Buckingham's CityWay project at Delaware and South streets included 250 apartments, The Alexander hotel, 40,000 square feet of retail and office space, and a YMCA that is set to open in December.
The second phase would consist of seven buildings—including the nine-story tower—that would contain 450 apartments and 19,500 square feet of retail or office space. A 220-space parking garage also would be built, according to city documents.
The city’s Metropolitan Development Commission on Oct. 21 quietly passed a resolution to contribute $15 million in downtown tax-increment financing funds to the project. Based on the original CityWay financing agreement between the city and Buckingham, the decision to provide the $15 million does not need City-County Council approval, said Adam Collins, the city’s deputy mayor of economic development.
“We took the opportunity to go back and re-evaluate the success [of CityWay],” Collins said. “We think that when you look at the continued expansion of downtown, this project will really be one that facilitates this growth.”
Buckingham officials could not be reached for comment Thursday afternoon.
The city’s decision to support a second CityWay phase caps an eight-year run by Mayor Greg Ballard in which he regularly used downtown tax-increment financing to support a plethora of private projects.
Ballard planned to spend $22 million on one-time projects this year and leave $7.3 million in the fund when he steps down Dec. 31 after two terms.
This year’s spending includes IUPUI roads, repairs to Union Station and the acquisition of a Citizens Energy property on Waterway Boulevard to create a shovel-ready site for the 16 Tech business park.
The $15 million Buckingham will receive for the second phase is far less than what the city gave the developer in 2011 to build the first phase. The city then issued $98 million in bonds to finance a portion of the $155 million project.
In the meantime, downtown’s apartment market has taken off. Occupancy remains at a healthy 94.6 percent, according to apartment broker Tikijian Associates, even as downtown continues to absorb a steady stream of big projects.
CityWay’s occupancy in mid-July stood at 96 percent, with rents ranging from roughly $1,000 for a one-bedroom unit to $3,300 for the largest three-bedroom.
“Everything is performing well,” said George Tikijian, managing director of Tikijian Associates. “I would have never have thought it could be this strong, but it is. We’ve really never had a hiccup.”
Construction of CityWay’s second phase is set to start early next year and finish in early 2018.
The nine-story tower would be built on top of the existing parking garage, with other nearby buildings on the surface lots bounding the railroad tracks and Virginia Avenue to the east of Bankers Life Fieldhouse.
Other buildings would be constructed on the surface lots on the west side of Delaware Street, stretching from South Street to the railroad tracks to the north. Part of the property is the former Delaware Street Towing site.
Buckingham estimates that the second phase will generate $23.4 million in property taxes over the 15-year TIF repayment term, with the city collecting $4.1 million in property taxes between 2021 and the end of the term.