Brokers fear criminal justice complex could harm downtown

Creating a new criminal justice complex outside of downtown will mean big changes for the Mile Square, and some real estate brokers think the transition will be painful.

The southeast quadrant of downtown will lose criminal courts, two jails, prosecutors' and public defenders' offices, community corrections offices, and possibly bail bondsmen and criminal-practice lawyers’ offices. Mayor Greg Ballard’s deputies believe developers will readily fill the void, but real estate brokers for office space are worried.

Downtown constituents heard both views Thursday afternoon in a forum presented by Indianapolis Downtown Inc.

“I believe there’s going to be an infill effect between Angie’s List and downtown,” Kurt Fullbeck, Ballard's senior policy advisor for economic development, told the small gathering at The Platform office space, next door to City Market. The Angie's List corporate campus is located along East Washington Street, just east of Interstates 65 and 70.

“People want to be downtown," Fullbeck said. "It’s coming slower than the brokers would like.”

While demand for downtown apartments is strong, the office market is anemic. The vacancy rate is more than 21 percent, and 2013 was the fifth year in a row of negative absorption rates, said Jon Owens, managing director at Cassidy Turley, who sat on the panel with Fullbeck.

Owens noted that the market has added no new, leasable office space in 20 years.  

Lawyers are a big factor in the current market. Two office buildings, the Gold Building and 251 E. Ohio St., would take major hits with the exodus of the public defenders' and prosecutors' offices, Owens said.

Fullbeck pointed out that it will take three years to build out the criminal justic complex, which Ballard has recommended situating on the former General Motors stamping plant site west of the White River. That would provide time to work with the owners of the Gold Building and 251 E. Ohio St., he said.

Fullbeck said the request for proposals from developers, due out this month, will not include office space for the Marion County prosecutor and public defender. That space will be built under a separate procurement process, which he said will allow the developer to decide whether to build additional leasable space for other users, such as jail-service providers.

Office real estate brokers aren’t the only ones who are worried. City Market has become a thriving hub for food vendors, thanks largely to lunchtime foot traffic from the City-County Building and other offices that house criminal justice-related functions.

“We have experienced a certain renaissance. We want to know the recuperation plan and the back-fill plan, because it does drive a lot of the market,” said Stevie Stoesz, City Market manager.

Gus Miller of Olympia Asset Management said he wouldn't mind seeing the offices of Marion County Community Corrections, which works with people on home detention, depart downtown. But if civil courts eventually move, too, that could upset the downtown “ecosystem,” he said.

“Savory, unsavory, whatever the characters are, they’re spending money downtown,” said Rick Trimpe, vice president at CBRE, who represents the owners of the Gold Building and 251 E. Ohio St.