Herb Simon-Backed Group Proposes Two-Tower, $250 Million Opposite Field – Indianapolis Business Journal

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The as-yet-unnamed hotel and apartment combo is said to be located on the southwest corner of Pennsylvania and Georgia streets, across from Gainbridge Fieldhouse. (Courtesy of the City of Indianapolis)

An investment group led by the Herb Simon family has filed a preliminary plan to demolish the century-old CSX building across from Gainbridge Fieldhouse in downtown Indianapolis and replace it with two high-rise buildings containing a hotel, apartments and a commercial space. The development has an estimated price tag of $250 million.

According to documents submitted to the Indianapolis Historic Preservation Commission by Indianapolis-based Ratio Design, the architect responsible for the project, the proposed development at 230 S. Pennsylvania St. would include a 26-story apartment tower and a hotel. of 16 floors. and would feature an elevated walkway connecting the country house.

Boxcar Development LLC, an investment group led by the Herb Simon family, which also owns Pacers Sports & Entertainment, is behind the project, according to Phil Bayt, attorney for Ice Miller LLP which represents Boxcar.

The 16-story tower proposed for the southwest corner of Georgia and Pennsylvania streets would have 225 hotel rooms and nearly 18,000 square feet of retail space. The 26-story structure would be built directly south along Pennsylvania Street with 254 apartments, nearly 4,800 square feet of retail space and a 700-space parking lot.

“This project will activate a long-vacant building with a new housing and hospitality complex,” Bayt said. “It will complement and amplify the $125 million already invested by the Simon family in the Wholesale District, including at Gainbridge Fieldhouse.”

If built as planned, the apartment tower would be the tallest structure by storeys since the 28-story 360 Market Square Tower was completed in 2018 on the former site of Market Square Arena.

The hotel is said to have a mezzanine-style lobby on the second floor and amenities on the third floor, as well as an undisclosed rooftop amenity. The main entrance would be along Georgia Street and a drop-off area along Pennsylvania Street. At least 51 spaces in the garage would be reserved for hotel guests, and another 21 for event parking.

Bayt said a hotel operator has not yet been appointed for the project.

The building’s commercial space would be divided into three zones, including a 9,400 square foot space along Georgia Street and a 4,600 square foot space around the corner. A third space – approximately 3,840 square feet – would be connected to the hotel lobby on the second floor, although plans indicate it could be used by the first-floor retailer directly below. The hotel would also have a bar and two terraces in the lobby, as well as the country house deck.

The parking lot and lobby entrances to the apartment tower would each be along South Pennsylvania Street. A 4,600 square foot market is proposed for a portion of the first floor retail space, along with a 1,060 square foot lounge. Amenities planned for the apartment tower include an outdoor swimming pool and rooftop terrace, as well as multiple green spaces.

The new structures would use curtain wall systems, glazed brick masonry and granite in their design.

The CSX building, built in 1923, is also known as the Indiana Terminal warehouse building. The five-story, 231,400-square-foot building has been used as offices, stores, and warehouses since its construction and was directly connected to the railroad that crosses Pennsylvania Street. Designed by renowned Indianapolis architectural firm Rubush and Hunter, it has a reinforced concrete frame and brick exterior walls.

The hotel-apartment combo would include 254 apartments and 225 hotel units. (Courtesy of the City of Indianapolis)

The property is listed by the Indianapolis and Chicago offices of JLL brokerage for an undisclosed price. The sale of the property should be subject to the necessary municipal approvals for its redevelopment, including the demolition of the existing structure.

In its submission for the project, Ratio said at least six redevelopment studies have been carried out on the property over the past 22 years, most since 2015. A 2019 study called for the building to be repurposed into self- storage, office uses and a hotel, including the addition of seven floors to part of the existing structure.

Others envisioned a coworking space, an extended-stay hotel development, and a development similar to the current proposal that included apartments and a 14-story hotel.

But the company said all past proposals have been hampered by the building itself, which has low ceiling heights, poor column spacing and a cacophony of other architectural issues that make repurposing the building difficult.

Bayt said he was unsure whether the development group would pursue tax-raised funding or incentives to subsidize the effort. The site is located in a Qualified Opportunity Zone, which means that developers could benefit from substantial tax relief by investing capital gains in the site.

The record indicates that a pardon does not make financial sense.

The “acquisition cost, combined with anticipated rehabilitation costs to create a project that will be a substandard, uncompetitive facility…does not provide a reasonable return on investment, even taking into account potential historical tax credits, the funding through tax increases and Opportunity Zone benefits,” the filing for a potential rehabilitation project states. “In fact, several building rehabilitation scenarios all yield a negative return on investment.”

“Having thoroughly studied the rehabilitation of this building, it is clear that the physical limitations of the building, coupled with the purchase price, render the building economically unusable.”

The proposed project would span three parcels totaling approximately 1.8 acres. The entire hotel portion of the development is within the city’s historic Wholesale district, while only part of the apartment tower site would carry that designation.

To move the project forward, IHPC must support the demolition of the existing building. It must also approve the portion of the proposed project that falls within the district boundaries.

The site is also expected to be rezoned as CBD-2, allowing multi-family and hotel uses downtown. A gap may also be required for the sky exposure plane due to the height of buildings.

The project is due for preliminary review by IHPC on Wednesday, May 4. The audience will allow the development team to receive feedback on the project. The developer would be required to return for another meeting with IHPC if they decide to go ahead with the project.

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