Negotiations between the city of Indianapolis and Ambrose Property Group broke down Wednesday afternoon, after city officials offered to buy the former GM stamping plant site from the developer for $6 million.
Ambrose rejected the offer, which came during a meeting at Ambrose’s headquarters on Monument Circle at which the two sides discussed their ongoing dispute over the city’s insistence that it acquire the property, using eminent domain if necessary. Ambrose put the site up for sale after announcing on Sept. 27 that it was withdrawing from the planned $1.4 billion Waterside development, but it says it has the legal right to sell to whomever it chooses.
While higher than the $3 million Ambrose paid for the site in 2018, the city’s $6 million offer fell way short of what Ambrose says appraisals it has obtained show it is worth. It says the appraisals value the 91-acre property at $65 million to $100 million. Ambrose has said it already has invested millions preparing the site for construction.
“After meeting with City officials today to discuss the property, it is clear that in a rush to ensure that no other developers could buy the property, the City unlawfully threatened to take the property through eminent domain without knowing how much it would cost, without knowing how the City would pay for it, and having forgotten that the City had a binding contract promising not to take the property by eminent domain,” Ambrose CEO and founder Aasif Bade said in a written statement. “ Given the City’s reckless approach, it is no surprise that the City today offered to buy the property for $6 million, far below its current fair market value.”
Representing Ambrose at the 40-minute meeting were Bade and fellow Ambrose officials Jason Sturman and Derek Naber, along with Ambrose counsel Jonathan Bunge of Chicago-based Quinn Emanuel Law. Representing the city were Thomas Cook and Scarlett Martin from the mayor’s office, corporation counsel Donnie Morgan and Faegre Baker Daniels attorney Scott Chinn.
The meeting had been scheduled to last one hour. Asked for comment afterward, Morgan said in a statement: “Ambrose’s continued posturing, and its characterization of today’s meeting, are disappointing. We nevertheless remain optimistic that we can move forward with productive conversations about the future of this critical piece of property.”
The city and Ambrose have been publicly sparring since Oct. 2, when the city sent a letter to Ambrose saying it wanted to buy the property so that it could control its fate and would use eminent domain if necessary.
On Tuesday, Ambrose escalated the dispute by sending the city a notice of tort claims, a precursor to filing a lawsuit. Ambrose alleges the city has slandered and defamed the firm, making a private sale of the property to one of the multiple developers interested in it “impossible.” Ambrose contends it has suffered losses of $30 million.
“If the point of the City threatening to take the former GM stamping plant site by eminent domain was to ensure that the property be developed quickly, the City’s unlawful threats are the worst way to go about it,” Bade said in his statement. “For no good reason, the City’s illegal actions have brought Indianapolis’ largest and most promising redevelopment project to a screeching halt.”
Ambrose also doubled down on its claim that the city is inappropriately pursuing eminent domain. As part of a 2018 project agreement both parties signed, the city said it would not use eminent domain.
“We reminded the City that it made a binding promise to not use eminent domain because, in 2017, the City threatened to take the property and we needed reassurance that the City would not do so again,” Bade said. “The City either forgot that it had made this agreement or intentionally breached its promise.”
But under Indiana law, municipalities have a constant right to eminent domain that supersedes contractual language. In its letter sharing plans to sue the city, Ambrose said city officials ultimately committed fraud by consenting to something that could not be enforced.
He said that if the city believes its offer of $6 million is fair, it “should rescind its unlawful threat and compete with other buyers in the free market.”
Ambrose agreed to purchase the GM stamping plant property in May 2017 from the Revitalizing Auto Communities Environmental Response, or RACER, Trust—which was formed during GM’s bankruptcy to prepare former plants for redevelopment. The developer was chosen by the city and RACER from among four bidders for the property.
Under the 2018 project agreement, the city agreed to pay $26.8 million toward the first phase of the development—which at the time was expected to cost $92.5 million.
Ambrose later asked the city for additional incentives, as it increased its planned investment in the site to nearly $300 million. The parties negotiated but were unable to come to terms on additional incentives. Weeks later, Ambrose announced it was withdrawing from the project.
The site was 103 acres before Ambrose this fall sold 12 acres to the Indianapolis Zoo for $3 million.
It is marketing the remaining 91-acre site through JLL.