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Review panel picks Hendricks’ $260M proposal for IPS property

May 24, 2016
IPS Hendricks proposal - big pic
The $260 million redevelopment scheme of the IPS property includes office, retail and residential elements. (Image courtesy Hendricks Commercial Properties)

An independent committee tasked with recommending a bid to redevelop the prized Indianapolis Public Schools property at Massachusetts and College avenues has chosen Hendricks Commercial Properties’ $260 million proposal.

The panel announced its long-awaited decision at Tuesday’s meeting of the IPS Board of Commissioners, which is poised to approve the selection Thursday.

Beloit, Wisconsin-based Hendricks, a relative newcomer to Indianapolis, entered the market in 2012 to build its $30 million Ironworks apartment and retail development on the southwest corner of East 86th Street and Keystone Avenue.    

Since Ironworks’ completion in May 2014, Hendricks has bought the Century and Massala buildings downtown and is set to construct a $20 million, 120-room hotel next to Ironworks.

Hendricks’ IPS proposal beat out five other bids—two from Milhaus Development LLC and one each from Browning Investments, Strategic Capital Partners and Hageman Group.

Hendricks plans to build 337 apartments, 339,400 square feet of office space and 67,225 square feet of retail space. In addition, it plans to build a 132-room hotel, 68,500-square-foot daycare and a 41,000-square-foot cinema.

The sheer density of the development pushes its price tag to nearly $260 million and way past the other bids. The next-most-expensive bid, from Strategic Capital Partners, came in at $217 million—or 16.5 percent cheaper.

The committee said it chose Hendricks’ bid partly because it had the highest price tag, the highest number of parking spaces (1,807) and the most commercial and retail space.

"It's nice to be selected," Hendricks CEO Rob Gerbitz said. "We're really excited about the project and to get to the nuts and bolts of the arrangement."

Hendricks’ proposal also requires no assistance from the city, while others sought incentives ranging from $6.5 million to $28.6 million.

The IPS board last month delayed a vote to allow IPS administrators more time to engage city officials.

The surprise move followed months of discussions about the 11-acre site, which includes a former Coca-Cola bottling plant and an IPS bus yard. IPS began the process in August.

Jeff Bennett, deputy mayor of community development, called the IPS property one of the most important sites downtown.

“It is key to pushing development out to the Cottage Home neighborhood and farther east,” he said last month.

Hendricks will pay IPS $12 million for the site and, “while not the highest, represents a strong balance when holistically considering the bids,” the committee wrote to the IPS board.

Other bidders proposed paying $2.1 million to $18 million.

Hendricks will purchase the property from IPS but will enter into a project agreement with the city. Under the arrangement, if Hendricks can't complete the purchase within one year, the city will buy the property for $12 million.

The Hendricks proposal requests $2.4 million from the state for site remediation and calls for the facades of the historic Coca-Cola bottling plant to remain.

Hendricks’ project will need approval from the Indianapolis Historic Preservation Commission.

To view all of the bids, click here.
 

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