Property Lines - Scott Olson

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Real Estate & Retail

Lingering questions for $150M North of South plan

September 28, 2010

North of SouthLeaders of Eli Lilly & Co. and Buckingham Cos. joined the mayor Monday to announce new details of a development proposal dubbed North of South that would include a boutique hotel, YMCA branch, retail space and upscale apartments, all on 10 acres north of South Street between Delaware Street and Virginia Avenue. The city has agreed to finance the vast majority of the project, more than $100 million of the $150 million total, using a couple of sources including a public loan backed by TIF revenues. It certainly looks like a great project and a great deal for Buckingham, which would contribute about $7 million. Property Lines is always happy to report new development projects with a strong shot at success. (Particularly when accompanied by fancy renderings.) But there are lingering questions with this one. Other developers who have tried similarly ambitious projects in the area won't be thrilled with Buckingham's generous taxpayer assist. Allen Commercial has been trying for years to build a mixed-use project dubbed Penn Centre on the surface parking lots to the west of Conseco Fieldhouse, without demanding public money to make it happen. Urban Space had proposed a residential and retail project called Ralston Square for a surface lot north of South Street between Meridian and Pennsylvania streets. And broker Ryan Zickler unsuccessfully sought city help in building a $480 million mixed-use development called Legends District SoDo just a block away from the proposed North of South. A publicly financed competitor could hurt the other projects' chances of landing private financing. Another question is whether the project will lead to another delay in redevelopment of the Market Square Arena site. At the press conference, Mayor Ballard called the project "innovative." Indeed. Any of the earlier proposals could have been innovative, too, had they enjoyed the support of an $86 million taxpayer-backed loan. Is it not a bit ironic that the mayor wants taxpayers to effectively invest in a boutique hotel, retail space and a YMCA branch on 10 acres downtown while selling the entire city's parking meters to a private firm? I guess we'll have to wait at least a few more years for public investments in stadiums and convention amenities to pay off with a large and privately financed downtown development. Meantime, stay tuned for more details once the deal is finalized.

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