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A long-simmering effort to rehabilitate the historically significant Drake apartment building north of downtown Indianapolis was given a tentative green light by a city board on Wednesday.
Indianapolis-based ALK Development LLC plans to spend $10 million to restore the building at 3060 N. Meridian St., currently owned by the city, to a 27-unit housing facility focused on seniors.
The city’s Metropolitan Development Commission unanimously approved a measure that would permit ALK to acquire the property from the Department of Metropolitan Development at a cost of just under $1.02 million, contingent on the firm’s ability to secure financing for its project.
Megan Vukusich, director of the Department of Metropolitan Development, said the ultimate goal of the city’s effort, which stems to 2019, has been to “bring the property back into productive use.”
ALK was one of five firms to respond to a city-led request-for-proposals process in late 2023.
“Overall, we’re excited to see progress toward stabilizing that building and adding additional housing to the neighborhood,” she said.
The building, which dates to 1928, has been vacant since 2016.
Andrea Kent, founder and owner of ALK said the building’s condition deteriorated significantly during that time, mostly due to water intrusion caused by poor sealing and little upkeep.
The firm’s project would include repairs to the exterior facade, new windows, new mechanical, plumbing, electrical and sprinkler systems, an updated elevator cab and abatement work to address issues stemming from the property’s current condition.
The project would also see the demolition of a single-story parking garage on the site, replacing that with additional surface-lot parking areas. However, no major structural changes or additions are planned for the project, with many of the units expected to retain their existing footprint in the building.
Kent said funding the proposed project is “not possible with traditional financing,” as it will focus on low- to moderate-income tenants.
The ALK project would rely on 9% low-income housing tax credits through a program administered by the Indiana Housing and Community Development Authority, as well as federal historic tax credits. Applications for the low-income credits are due July 28 and will be awarded in November.
“It’s a delicate balance as we [don’t] want to oversaturate the surrounding neighborhoods with low- to moderate-income housing, but we also want to be mindful and ensure our aging population is not displaced,” she said in a written response to emailed questions from IBJ. “There is an uptick in demand for all types of senior housing and we are hoping to help meet this demand [by] bringing the Drake back online and providing affordable housing to our senior neighbors.”
The city acquired the Drake property from The Children’s Museum of Indianapolis in July 2023, putting an end to a four-year tangle that began when the museum said it planned to demolish the structure to make way for more parking and new exhibit space.
In September 2019, the Indianapolis Historic Preservation Commission voted to protect the building from being torn down by designating the property as historic at the request of the city. The move set up a protracted squabble between the city and museum.
The matter in 2021 was escalated to a lawsuit after the museum failed to find a firm to develop the property. Even so, the entities continued to discuss ways to salvage the building behind closed doors.
ALK’s plan to purchase the building stems from an option agreement it reached with the Department of Metropolitan Development, which the Metropolitan Development Commission approved Wednesday. It will pay the same amount the city did to acquire the Drake in the first place, $1.015 million.
Kent said the project is contingent on the low-income funding, but could also be affected by certain unknowns to the building’s condition that will only be uncovered after renovation work starts. There’s also pressure, she said said, in “living up to everyone’s expectations” for what they envision for the Drake property.
“So many people hold this building near and dear,” Kent said, “and I’m humbled the city chose ALK Development to redevelop this iconic building.”
Stenz Corp. is expected to be the property manager for The Drake during construction and after opening.
John Dillon, president of the Metropolitan Development Commission called the redevelopment effort “an important project” for the city, as part of the vote.
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Good luck! At least it’s not demolished…yet.
27 units is maybe 3 units per floor. That $400K plus per unit. Could that be a typo?
They must be huge units in if they’re only going to be three per floor that building has quite a footprint as far as depth.
Less tax credits to the owner of what appears to be about 15-20% per year for some number of years. And that per unit is the present value of the cost of renovation for a unit that is likely expected to have a functional life span of 20 years for amortization purposes. Special rate financing will be used. I suspect the accounting has progressed well beyond the back of an envelop/scrawled on a paper napkin and everyone involved has aproved.