Ambrose Property Group said it still plans to find a buyer for the former General Motors stamping plant site, despite an ongoing—and escalating—dispute with the city of Indianapolis about control of the land.
The Indianapolis-based firm announced Sept. 27 that it planned to withdraw from its $1.4 billion development of the stamping plant site, directly west of downtown, after changing its overall business strategy to focus on e-commerce and industrial projects.
At that time, the company also said it hoped to find a buyer for the property who could move the “Waterside” project forward.
Ambrose President Aasif Bade said in a written statement Thursday night that the firm has received several calls from local and national firms interested in buying the property, including an inquiry from a “very large national real estate owner” specializing in opportunity zones that “was particularly interested and well positioned to carry Waterside forward.” Investors in low-income areas designated as opportunity zones can quality for substantial capital gains tax breaks, under legislation passed by Congress in 2017 that created the opportunity zone program. The GM site falls within such a zone.
Ambrose has worked with JLL to market the property, which was 103 acres before Ambrose sold a 12-acre chunk last month to the Indianapolis Zoo for $3 million.
But an Oct. 2 letter from the city offering to buy the property—or, alternatively, to take it by force using eminent domain—derailed efforts to market and sell the 91-acre site, Bade said.
“While [the city’s] misguided actions are illegal according to Indiana law and an indisputable breach of the city’s contractual agreement with us, they have also corrupted our sales process and scared legitimate buyers away from Waterside,” he said. “The city has violated our rights and is harming the community by putting Waterside in a state where no buyer will move forward.”
The firm on Thursday also sent a six-page letter to the city, further disputing the city’s rights to the property. The scathing letter, sent by Ambrose legal counsel Jonathan C. Bunge, with Chicago-based law firm Quinn Emanuel, said the city has slandered the company and violated the parties’ 2018 project agreement, all while making it “effectively impossible” for the land to be sold to a third party.
“By making false and malicious statements regarding its right to take Waterside with or without Ambrose’s consent, the city has made it effectively impossible for Ambrose to sell to anyone but the city,” the letter said.
In his statement, Bade also said “the city failed to partner with us in ways consistent with a project of this size and scope,” ultimately leading to Ambrose’s decision to exit the project. He said the threat to take over the site is “politically motivated.”
When asked what it meant by “failed to partner,” Ambrose pointed to the city’s unwillingness to provide funding beyond the $26.8 million subsidy agreement the parties agreed to last year, even though the project had grown and Ambrose’s investment had “more than tripled.”
Under the subsidy agreement, the $26.8 million was to have been doled out in stages and used primarily for infrastructure and utility work. The city had disbursed less than $1 million of the initial allocation of $8 million.
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—for $3 million. The developer was chosen by the city and RACER from among four bidders for the property. The purchase closed in April 2018.
Despite the animosity between the sides, Ambrose said it is willing to sell the land to the city—and avoid litigation.
Ambrose said it would expect any negotiated amount would allow it to recoup the “millions” it has already invested in the site.
“If the city wants to have a serious discussion about avoiding litigation and purchasing the property, the city may make a written offer and include proof that it has the funding to back it up,” Bunge’s letter said. “Otherwise, Ambrose will protect its rights in court.”
Taylor Schaffer, Mayor Joe Hogsett’s deputy chief of staff, said in an email to IBJ that the city on Thursday sent a long written response to the legal counsel for Ambrose, “with the intention that communication might more productively move forward at the negotiation table, rather than in the press.”
The letter, addressed to Bade, said the city has tried to meet with Ambrose to discuss a resolution on multiple occasions to no avail. The letter responds to several issues raised by Ambrose’s legal team but emphasizes that the city does “not believe a legal fight should be the preferred path forward.”
She said Ambrose’s “public statement in response to this communication is yet another disappointing development and is quite concerning for the city.”
Schaffer noted that 18 months ago “a project agreement was executed in which Ambrose committed to developing the former stamping-plant site and the city committed $26 million in taxpayer money to assist them in that project. Ambrose made clear to the city in September that it was not going to move forward with the project it was contractually committed to complete unless the city would guarantee it at least another $10 million in taxpayer money. Shortly after that, Ambrose announced that it was going to sell the property ‘to focus [its] business on e-commerce and industrial development.’”
Schaffer said the city still hopes to work something out with the developer without a legal battle.
“The city remains very interested in meeting with Ambrose to discuss how we can collectively move forward and catalyze the redevelopment of this critically important site,” she said.