A strip mall central to Indianapolis’ vision for the neighborhood that is home to the new Community Justice Campus is now in city hands, after years of negotiations.
Health and Hospital Corp., the municipal corporation that runs Marion County’s health functions, closed on the acquisition of the Twin Aire shopping center Sept. 21, according to the city, after offering nearly $4 million for the 13-acre property on the near-east side.
The Department of Metropolitan Development will work with HHC to redevelop the location, said Ike McCoy, DMD’s principal program manager for real estate and land, at an Oct. 21 Twin Aire Neighborhood Coalition Meeting.
HHC has been in talks to buy the parcel since late 2017, after Indianapolis picked the nearby former Citizens Energy coke plant property for the new Community Justice Campus, McCoy told community members.
Initially, McCoy said, HHC wanted to develop a health care facility at the site, but by 2018, the plan changed. The new goal? Economic redevelopment.
HHC continued to negotiate with the property’s absentee former owner, Mervyn Dukatt—even though the organization’s central role in Marion County’s pandemic response meant delays in the acquisition, according to McCoy.
“They already had a relationship, [and] they had already made contact with the property owner, who was hard to get ahold of,” he said at the meeting. Dukatt is principal at Chicago-based Mer Car Corp.
HHC had also already started its due diligence process, including an initial environmental assessment, so a transfer would have meant starting over.
So what’s next? First up, what McCoy called “stabilization.” HHC has contracted a property manager to get holdover tenants back on leases and to create an improvements fund.
The fund would use revenue from the shopping center for small fixes, such as getting rid of the litter, trash and graffiti. As the fund grows, McCoy told residents, the money could go toward larger projects, like covering potholes, wrapping windows in vacant units, enclosing dumpsters and adding more lighting in an alleyway.
Indianapolis also has to conduct a detailed environmental assessment, featuring soil and vapor checks, to test for possible contamination, according to McCoy. That’s expected to be completed by March.
Meanwhile, DMD has begun putting together a request for information covering both the shopping plaza and a nearby former Twin Aire drive-in theater site, which would be redeveloped together. The city bought the 28-acre site in 2018 and has been waiting to get the strip mall under its control.
Once DMD reviews developers’ ideas, likely in the spring or summer, it’ll put out a request for more specific redevelopment proposals. The agency would likely be picking from the responses next fall, McCoy told residents.
“As much as we want to have economic development take place in and near the site, it’s important that we take our time and that we end up with a development that matches both the needs of the community, and the needs of the city and county, generally, for the area,” he said of the timeline.
The Kroger will stay for the time being, since its lease goes until 2024. From there, the company has the option to renew up to five times, in five-year increments, according to leasing agreements provided to IBJ.
Southeast Neighborhood Development Inc., which convenes the neighborhood coalition, made an inquiry through a real estate adviser about buying the shopping center, IBJ reported, back in 2016. The group thought it was worth about $4 million, based on market research, but the then-owner countered with $6 million.