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IPS board approves Hendricks' $260M bid to redevelop Mass Ave site

May 26, 2016

The Indianapolis Public Schools board approved a recommendation to sell 11 acres downtown for redevelopment to Hendricks Commercial Properties, despite pleas from competing developers and neighboring residents.

An outside committee tasked with recommending a bid to redevelop the land at College and Massachusetts avenues on Tuesday chose Hendricks. On Thursday evening, IPS’ Board of Commissioners voted to approve the recommendation 4-1.

The vote was not without debate, however.

Representatives of Milhaus Development LLC and Browning Investments, also bidding to redevelop the site, urged commissioners to vote against the Hendricks recommendation. They argued that it is too large for the area and doesn’t incorporate the entire former Coca-Cola bottling plant there, just the facades. The site also contains an IPS bus yard.

“Our project does not overwhelm the Chatham Arch neighborhood,” said Jamie Browning, Browning Investments’ vice president of development.

But ultimately, the board members—except for LaNier Echols, who voted against the recommendation—chose to trust the outside committee’s input, leaving the city to wrestle with the scope and design of Hendricks’ proposal.

“Let the city hammer out the details,” board member Michael O’Connor said. “I’m not comfortable saying, ‘Let’s do this all over again.’”

Board member Gayle Cosby abstained from the vote, saying she missed critical discussions about the proposal and didn’t know enough about it, and the board's president, Mary Ann Sullivan, recused herself. Her husband, Brian Sullivan, is managing partner of Shiel Sexton Co. Inc., the general contractor listed in Milhaus’ proposals.

Hendricks’ proposal will receive scrutiny from both the Metropolitan Development Commission and the Indianapolis Historic Preservation Commission.

There’s little doubt Beloit, Wisconsin-based Hendricks presented the boldest bid.

The $260 million proposal shot way past the other bids. The next-most-expensive bid, from Strategic Capital Partners, came in at $217 million—or 16.5 percent less.
 
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.

But several neighborhood residents argued that the scale is too large.

“We don’t need this project to dominate the Avenue,” said Shawn Miller, who founded the Massachusetts Avenue Merchants Association. “We need it to complement it."

Hendricks will pay IPS $12 million for the site and, “while not the highest (price), 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 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 constructing a $20 million, 120-room hotel next to Ironworks.

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

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