Indy Parks said Tuesday that it expects to spend more than $20 million to purchase the planned family health and community center at Broad Ripple Park from the developer within one year of the building’s completion.
The department told IBJ it plans to acquire the 40,000-square-foot facility to take full control of the property and avoid shelling out nearly $1 million per year as part of a long-term lease agreement it negotiated with owner-developer BR Health Holdings.
“The agreement has a rent abatement for the first 12 months,” Ronnetta Spalding, chief information officer for Indy Parks, said in an email. “The plan is to purchase the building after that period.”
The cost for acquiring the building following the first year of operation would be the development cost—an estimated $20 million—multiplied by 1.1, according to a project agreement finalized in late 2020. That would make the cost of the purchase about $22 million.
If Indy Parks opted to wait longer to purchase the building, the multiplier would see a stair-step increase to as much as 1.33 after the fifth year, with a mechanism in place to calculate the cost thereafter.
Construction of the center is expected to be complete by the end of 2022. It’s not immediately clear how the acquisition of the building would be funded.
Indianapolis-based Avenue Development—doing business as BR Health—plans to break ground on the development Wednesday morning following days of demolition to the park’s former family center.
The new community center project is part of a $70 million master renovation plan for the park approved in 2018 that called for the replacement of the existing 11,000-square-foot facility that Indy Parks officials argued was too small to meet the growing demand for space.
Early in 2019, the city requested proposals for development of a building that would replace the 11,000-square-foot center at the park. City officials hoped to find a private-sector partner to build a combination health care clinic and family event center. It then would lease part of the building.
BR Holdings won a public bidding process. Under its deal with the developer/owner, Indy Parks agreed to lease at least 25,000 square feet in the building for 30 years, but with options to buy the building.
After the first year, it would be required to pay $79,900 per month in rent, or $958,800 per year. It also agreed to contribute funds toward maintenance and upkeep of the property.
Community Health agreed to lease 15,000 square feet in the building for a medical clinic.
In a statement, a Community Health said the network is “excited to be chosen by the city to provide health services at this site.”
In addition to health care uses, the two-level facility is also expected to house a gymnasium, group meeting space, a children’s play area, a two- or three-lane running track, administrative areas, and a multipurpose room. Initial designs for the project were revealed in November 2019.
If IndyParks buys the building as planned, Community Health would continue to pay rent—$493,350 in the first year and $412,500 in the second, with the lease payments increasing by 2% each year after.
Plans for the project have been challenged repeatedly by a small group of people in the Broad Ripple community, many of whom claim there is no need for such a facility, and that a public-private partnership is not appropriate.
Challengers to the project have also expressed concern about Indy Parks paying rent to occupy space in a building on land it already owns.
Three property owners near the park also filed a lawsuit—which was later dismissed—to try and stop the building from being constructed. Those complainants said the new facility would cause “immediate and irreparable loss of [their] property values and their use and enjoyment of their homes.”