Harrison College has put its downtown campus along East Washington Street on the market and is asking $11.5 million for the two properties—a steep jump from their assessed values but reflective of the area’s increasing potential for growth.
The four-block stretch of East Washington from Alabama Street to College Avenue had been devoid of new development for years until Milhaus Development LLC began building the Artistry apartment building in 2012 at Market and East streets, which was followed by a second phase on the same block called Mentor and Muse, bringing 500 units to the corridor.
Since then, activity has heated up. In January, Cummins Inc. opened its global distribution headquarters on the block west of Artistry, on part of the former Market Square Arena site, and two more apartment projects are under construction nearby.
City leaders think there’s much more to come, in part because they’ve stoked developer interest by expanding the downtown tax-increment-financing district to encompass Market East.
Additional property taxes generated by new development in TIF districts go toward paying off bonds issued to cover building demolition, infrastructure improvements and subsidies for new development. The City-County Council in November broadened the downtown TIF to include both Market East and the former GM stamping plant site west of downtown.
“We anticipated this last year as we were working to expand the downtown consolidated TIF to include parts of Market East,” said Jeff Bennett, the city’s deputy mayor of community development. “It’s happening sooner rather than later, with the [Harrison College] announcement.”
The for-profit school’s campus sits on 4.7 acres and includes the three-story, 50,000-square-foot building at 550 E. Washington St. and the adjacent, 25,700-square-foot, low-slung Chef’s Academy to the east. Harrison College was founded in 1902 as Indiana Business College and has 3,000 students at three Indianapolis locations.
A spokeswoman for the college said it decided to put the properties on the market to relieve the school of the responsibility of building ownership. Harrison College leases its other properties in Indiana, Ohio and North Carolina.
“Given the current commercial real estate climate in Indianapolis, selling these buildings would allow for capital to be put into Harrison to ensure our students continue to be well-served,” spokeswoman Becky Polston said in an email.
Resource Commercial Real Estate began marketing the properties in late February; it is listing the main building for $8 million and the academy for $3.5 million. Both prices represent a big jump from the assessed values of the sites—$1.4 million and $892,800—reflecting the perception that the neighborhood is about to pop.
The buildings already are receiving “a ton” of interest, said Sam Smith, Resource Commercial Real Estate chairman.
“A lot of positive changes are happening there,” he said. “It’s kind of a hot area.”
That would have been a vast overstatement when Harrison College bought the buildings more than a decade ago.
The larger structure housed Superior Chevrolet in the 1970s and later a trio of banks, with the former Bank One selling the parcel to the college in 2002. The building the academy now occupies was built in 1971 and housed the Schmidt & Sons real estate agency until 1993. Diversified Opthalmics bought it in 1993 and remained there until selling to Harrison College in 2004, according to county assessor records.
Harrison College’s Poston said the school might lease back the larger building and keep its campus and administrative offices at the site, or it might move elsewhere downtown.
Regardless, because Harrison decided in July to suspend enrollment in its Indianapolis culinary program and will graduate its final students in May, the Chef’s Academy property is primed for redevelopment.
The east side of downtown was little more than a commuter corridor until Milhaus’ Artistry apartment project began bringing residents to the area. Now, with Cummins’ 10-story office building finished and Flaherty & Collins Properties’ 27-story 360 Market apartment building well under construction across the street to the north, developer interest is on the upswing.
Herman & Kittle Properties Inc. is building 211 apartments on a 2.6-acre parcel as part of a project called The Vue at the northeast corner of College Avenue and Georgia Street, just outside the Market East TIF.
A block south of that, South Bend-based Holladay Properties agreed in January to buy the Milano Inn building for a condominium and retail project. The well-known Italian restaurant closed at the end of last year after operating more than 80 years.
Numerous parcels in the area could become clean slates for developers as a result of the city’s plan to build a $565 million to $575 million justice center on the former Citizens Energy coke plant site on Prospect Street southeast of downtown.
After that is up and running, the city wants to use TIF funds to raze the Marion County Jail, 40 S. Alabama St.; the Marion County Jail II, 730 E. Washington St.; Liberty Hall, a work-release center at 675 E. Washington St.; and the Downtown Heliport, 51 S. New Jersey St.
Also boding well for the area are plans for a rapid-transit bus system called the Blue Line running east-west along Washington Street, said City-County Councilor Zach Adamson, whose district includes Market East.
“With the improved transit system, Washington Street in general is going to be primed for enormous economic development,” he said. “I’m really excited for the corridor.”
Developers even have shown interest in sites farther east, outside the TIF’s boundaries.
TWG Development, for instance, recently agreed to buy Ford Motor Co.’s vacated assembly plant along East Washington from Indianapolis Public Schools for $1.65 million.
TWG plans to redevelop the 102-year-old, four-story, 160,000-square-foot structure by converting the ground level into its headquarters, with market-rate apartments on the top three floors.
Such projects are fueling city officials’ optimism.
“It’s truly becoming a neighborhood in a way it hasn’t been for many years,” Bennett said.•