Main post office pondering move: Relocation could prompt sale of 16 acres across street from proposed stadium

It’s not in the path of a new stadium planned for downtown Indianapolis, but the downtown post office may get out of the way anyway.

U.S. Postal Service officials are negotiating an agreement to sell land the postal service owns within the stadium footprint, and a spokesman said that discussion is part of a larger scheme to relocate the entire facility.

“They’re talking about moving the whole thing,” said Al Eakle, public affairs officer for the USPS’ Indiana district. “Basically, [the city] wants it all.”

Negotiations for a four-acre parcel used as a parking lot at the southwest corner of South Street and Capitol Avenue began some time ago, when the project was still in the hands of the city’s Capital Improvement Board. The job-including the remaining land acquisition efforts-has since been handed over to a new state entity that will oversee design and construction.

The Indiana Stadium and Con- vention Building Authority will continue working to acquire the site, Executive Director John P. Klipsch told IBJ, but it has no designs on the post office proper, which is across Capitol Street.

“You’d have to ask the city about the building,” he said. “We’re just talking about the parking lot.”

Postal officials are considering a move, however, even if they’re not ready to discuss specifics.

“There’s not a whole lot I can go public with right now,” Eakle said. “I can probably say more when we get closer to looking at where we actually want to go, when we start looking for a facility.”

The post office’s lease on the South Street operation doesn’t expire for years-after the stadium is scheduled to open and a nearby convention center expansion is expected to be complete-but a move has been the subject of speculation for some time.

IBJ reported in 1998 that the post office had outgrown the 16-acre downtown site and officials were considering a move to a vacant air-cargo sorting hub at Indianapolis International Airport.

Property co-owner Gian Sud told IBJ he is open to selling, but he hasn’t heard from a potential buyer yet.

“I wish they would call,” he said.

Sud and his brother Harris bought the land in 2004 as an investment. They also own a Mercedes-Benz dealership in Normal, Ill.

“Uncle Sam has a lease through 2011,” Gian Sud mused. “But if the price is right

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Deputy Mayor Melina Maniatis Kennedy didn’t confirm the city’s interest in the post office-presumably a potential site for ancillary development-but she didn’t deny it, either.

“At this point in time, we’re really focusing all our energy on being helpful in the [project’s] transition to the state,” she said in a voice mail message. “We’re focused on the transfer of land related to the footprint … and the post office building, of course, falls outside the footprint.”

CIB is giving the state about 25 acres of land it had already acquired for the project. It also handed over years’ worth of documents accumulated as it has put together plans.

The post office facility is not specifically referred to in 600 pages of real estate-related materials the state received this month and released to IBJ following a publicrecords request.

But the documents do provide details about other transactions, including the terms of a pending deal to buy the Comfort Inn & Suites at 530 S. Capitol Ave.

CIB agreed to pay $12.8 million for the hotel and 2.75 acres of land it needs for the stadium project, more than a 20-percent premium over the estimated value of the property.

Two appraisals conducted last year set the market value of the land at $10 million and $10.5 million. The board did not agree to provide another site for the hotel, however, as had once been suggested.

Hotel owner Dora Brothers Hospitality Corp. is prepared to follow through with the agreement, but its leaders are unsure of what will happen now that the project decision-makers have changed.

“All of it is kind of up in the air,” said Dora Brothers principal Tim Dora. “We feel like we’ve been treated fairly. … We do not want to renegotiate.”

Dora Brothers also operates a Best Western hotel about a block away, just west of the stadium site. The company intends to rebuild the downtown Comfort Inn, but Dora isn’t sure where or when that will happen.

“We don’t have anything concrete at this point,” he said.

Klipsch said the state agency intends to honor agreements CIB entered into, and will dive headfirst into ironing out deals for the remaining properties-including the post office parking lot.

And other procedural hurdles remain. CIB has started the process of rezoning some of the project site and applied to vacate a portion of Merrill Street where the stadium will sit.

A May 18 hearing on the proposed changes was postponed a month at the request of a local business group and nearby landowners.

Members of the Concord Business Association support the $900 million project, but wanted more time to learn about how it will affect their near-south-side enterprises, said facilitator Mark Flanary, executive director of the Concord Development Corp.

“Think about the magnitude of this,” he said. “It is definitely going to impact the surrounding area.”

Greg Zubek, an attorney representing property owners Linda Elliott and Express Realty, could not be reached to comment on his request for a continuance.

The zoning hearing is scheduled for June 15.