More than two years after first unveiling a $200 million plan to revamp Lafayette Square Mall, the developer behind the stalled project on Thursday announced an expanded vision and a new strategy that he believes could push investment in the neighborhood higher.
The revised project plan—which is now named The Square—includes tearing down much of the existing mall structure and replacing it with roadways, apartment buildings, a sports facility and other buildings that create more of a village concept.
But to achieve his expanded vision, Fabio de la Cruz and his firm Sojos Capital will need a substantial amount of help that could come in the form of development partners, city incentives and debt financing—something the developer originally hoped to avoid.
De la Cruz said if his vision is realized and partners participate as he expects, the total investment could reach $700 million to $1 billion.
Sojos is still finalizing the new plan for the mall at West 38th Street and Lafayette Road, but de la Cruz said it will incorporate many elements of the original Window to the World concept he unveiled in November 2021.
That project—the first phase of which was originally to be completed in November 2022—never got fully underway, even though tenants were moved out of their retail spaces that year. De la Cruz said last summer he was going back to the drawing board.
Now he says that rather than repurposing all of the mall’s 1.2 million square feet, about two-thirds of the structure will likely be razed to make way for new buildings and roads.
The new plan calls for more than 1,200 apartment units across at least eight buildings, two hotels totaling nearly 400 rooms, a 200,000-square-foot youth sports facility, a school and 533,000 square feet of retail space.
The proposal also includes more than 4,000 parking spaces across surface lots and garages and about 200,000 square feet of office space. A 100,000-square-foot film production studio is proposed, as well.
Redevelopment of the remaining mall building, which would likely come in a later phase of the project, is expected to feature a corridor showcasing work by local artists along with a food hall, dozens of retailers and a concert venue. De la Cruz said the renovation could include rebuilding the historical slanted columns that once featured in the building’s main entrance.
The project would shed the Window to the World moniker in favor of a more neighborhood-focused identity known as The Square, an homage to the mall’s original name.
While infrastructure needs for the project are still being determined—as is a timeline—several new paved roads are expected to be built within the existing mall parcel to connect the project’s components.
The pedestrian-friendly plan would include several vehicular access points from Lafayette Road, including a refresh of the current main entrance.
“For the size of this project and the uniqueness of the neighborhood that we’re creating, we’re studying all the different options, and there may be options that we go with that we haven’t even considered yet,” said de la Cruz, principal of Sojos. “This idea has evolved.”
Overhauling the 115-acre mall site is part of a larger effort by Sojos to revamp a number of stores, shopping centers, entertainment offerings and educational buildings throughout what’s known as the International Marketplace neighborhood.
Making a change
De la Cruz said his $200 million, self-funded idea for redeveloping Lafayette Square Mall encountered a major setback when construction costs skyrocketed in 2022. To move ahead, he said, Sojos needs to take on debt, bring in development partners or receive incentives from the city. The firm is taking a hard look at each of those strategies.
De la Cruz said Sojos has struck tentative verbal deals with multiple groups—most of whom he declined to identify since agreements aren’t finalized—to manage various parcels, including some of the proposed apartment developments and a pair of hotels.
He did say Sojos has inked a preliminary agreement with Indy Pavilion Events Group to operate an entertainment venue on the back side of the mall parcel. The company, formerly called 317 Events, previously operated at Pan Am Pavilion downtown.
De la Cruz predicted the all-in investment in the mall alone will be at least $700 million but could be closer to $1 billion, depending on commitments from would-be partners.
“With these partnerships we’re getting … and everything we’re trying to accomplish, it will easily surpass $700 million in investment,” he said. “Now, [whether] the mall parcel itself is going to get to $1 billion, I don’t know—the neighborhood for sure [will], because there’s going to be a lot of development around here that’s going on outside the mall.”
Andrew Urban is senior vice president of occupier services for the Indianapolis office of Toronto-based brokerage Colliers International. He said that he is dubious of whether a development like The Square will garner $1 billion in total investment. But he said that Sojos’ decision to bring in partners is a good move.
“What that does is, it spreads out the burden, both operationally [and] fiscally,” he said. “And if you pick the right partners that are experienced with those product types, it helps developers execute with less risk. It’s the right move for them, to break it apart, in this environment.”
Still, Urban said, “I do think there’s some real challenges there, and I think it’s a very difficult environment for even the most accomplished, experienced developers with projects of this magnitude to be able to pull these projects off right now.”
De la Cruz faced scrutiny in 2021 when he said he would forgo partnerships, investors and debt because he wanted to control the entire development with his own vision.
“There is nothing more real than having the cash in the bank,” he said then. “The money’s in the bank; the properties are all paid in cash. That’s why there is no reason it’s not going to happen. We have the cash, and I have 100% [control] on making all the decisions.”
He now says he’s open to other arrangements, and the company has started talks with the city of Indianapolis about incentives. Sojos has not yet determined whether the focus of an incentives request will be for infrastructure or housing or a mix of the two.
“I wanted to … put a new master plan together, where we could be more focused on creating density and less concerned about any limitations on cash, because I know if we pull debt for this, we’re going to be fine,” de la Cruz said.
The company worked closely with Isaac Bamgbose, CEO of Indianapolis-based New City Development, to develop the plan. New City Development is serving in an advisory role and is not an active partner in the development, Bamgbose told IBJ.
Sojos also worked with Indianapolis-based design planning firm MKSK and Richard Weiss with Austin firm Weiss Architecture, de la Cruz said.
The mall, which opened in 1968, has been on a downward slide for decades. In its heydays in the 1970s, it featured six department stores: Sears, J.C. Penney, G.C. Murphy, William H. Block, Lazarus and L.S. Ayres. Today, its only anchor is the discount retailer Shoppers World, after Burlington Coat Factory closed in September 2019.
Smaller spaces are mostly occupied by a mix of local stores and restaurants, with only a handful of national chains. J.C. Penney, Sears and Macy’s left in 2005, 2008 and 2009, respectively.
Any plans for the revamp of Lafayette Square Mall will have to go through what’s called a replat process, where the mall site, on paper, is broken into parcels that could be redeveloped. The city would also likely have to rezone many of those new parcels—at least 20 are planned—to allow for the uses de la Cruz has in mind.
The replat process is expected to begin in a few months, as Sojos works toward finalizing components in the first phase of redevelopment. Rezoning would occur once development agreements have been signed and uses for each parcel are affirmed.
De la Cruz acknowledged that some parts of the plan—such as a proposed town-house development near Interstate 65—could be rethought as work progresses.
But he said he decided to release the plan now because he’s received so many questions from the media and the public about the project, why he stopped work on the initial plan and when (or whether) a new plan would be released.
De la Cruz told IBJ he wants to be transparent about what is going on behind the scenes.
“This plan lays out everything that we [would] like to do there, but at the same time, if we see an opportunity that is better than the one [we have], we could switch things around a little bit,” he said. “About 90% of what’s in there I am confident will move forward. But we’re still working with big institutions, and we’re negotiating those deals. So we can’t tell when those will happen yet.”
A ‘real opportunity’
Cebronica Luft, founder of Indy Pavilion Events Group, said her deal with Sojos to operate the concert venue in the former mall building is tentative, but she acknowledged she is in continual discussions with Sojos about how the space could be best used. The venue is expected to occupy the 75,000-square-foot former Xscape space at the rear of the mall.
“We very much support Fabio and what he’s doing with this master plan for the [neighborhood], and we definitely want to be a part of it,” she said.
“Our commitment … was initially based on his vision for that area as it aligned with the potential that we see in that area, but we want to know more,” she said. “So, we’re looking forward to working with him on figuring out what the best-use cases are for the space.”
For Bamgbose, the new master plan presents a chance for more community involvement and a unique way of approaching additional uses on the expansive tract.
“There is some real opportunity, because there’s some big boxes that can have something done with them,” he said. “When you look at what [Indy Pavilion Events Group] is looking at doing, that’s a really interesting use, and it’s a destination driver.”
Bamgbose said some malls are still viable, but there’s ample room to reimagine others, like Lafayette Square.
“The mall right now sits as one contiguous building, but by looking at ways to break that apart and parcel them out, it opens the development up to bring uses that are unique and potentially complementary to one another,” he said. “It can create something really special.”
The larger effort to overhaul the neighborhood has been underway for years, with de la Cruz quietly acquiring dozens of properties over
the past decade.
He told IBJ he has already invested about $150 million in the neighborhood. That includes nearly $80 million he has spent to buy 320 acres, including the mall property.
In addition, Sojos spent $50 million
in 2021 and 2022 on a new roof, electrical systems and HVAC for the mall building.
The rest has gone toward other projects in the International Marketplace area. De la Cruz’s ownership—which includes several shopping centers—makes him one of the largest property owners in the neighborhood. In recent years, most of his properties have received new roofs, fresh paint and repaved parking lots with upgraded lighting. Others will get similar upgrades this year.
Sojos is also spending $1 million to convert a former Aldi grocery store into a community center and $15 million to develop an Alamo Drafthouse movie theater. In 2022, de la Cruz built a new headquarters for the Northwest district of the Indianapolis Metropolitan Police Department.
He said he wants to develop a sports facility near the mall by the end of this year.
De la Cruz said he spent “several million” to support the businesses that vacated Lafayette Square Mall in 2022 as part of Sojos’ effort to refinish the mall interior. Most of those businesses have either closed or relocated to other parts of the corridor, he said.
He said that, while he understands why some people are skeptical about whether the mall redevelopment will come to fruition, he considers his ongoing investment in the neighborhood “concrete evidence” that the mall project will happen also—“that it’s not just a dream.”
The partnerships he’s looking to forge will go a long way in propelling investment in the area, de la Cruz said, whether in his projects or in sites outside his control. As for the mall redevelopment, he said, “We own the land, we have the cash, and we’ve been improving a lot of things in the neighborhood already.”•