BREAKING: Borders looks to sublease downtown store-WEB ONLY

Bookstore chain Borders Group Inc. is looking for a replacement tenant for its 22,000-square-foot store at the high-profile corner of Meridian and Washington streets in downtown Indianapolis.

The Ann Arbor, Mich.-based chain is marketing the property to potential replacement tenants but has made no final decision on whether to close, said Borders spokeswoman Mary Davis.

“This exploration is just that – a review of possible options, and is no indication that the store will change hands or will be closed,” she said.

The loss of the bookstore, which occupies two floors of the historic 17-story Barnes & Thornburg Building across from Circle Centre mall, could be a major blow to downtown, adding a second major vacancy to one of its marquee corners.

The opening of the Borders in 2001 was an encouraging sign that the mall was helping to drive new street-level retail.

But the outlook for the intersection is a bit cloudier these days. Flagstar Bank left the northwest corner last year to move a few blocks east. And mall anchor Carson Pirie Scott at the southwest corner also could be at risk: Its parent, Bon-Ton Stores Inc. of Pennsylvania, has been struggling with more than $1-billion in debt and is often mentioned as a candidate for bankruptcy.

Borders has its own share of troubles with high debt and plummeting sales, and its stock is trading for about 50 cents per share. The chain last week announced it is cutting 136 jobs at its corporate headquarters. It also is exploring sublease deals for other stores it would not name, Davis said.

Locally based Eclipse Real Estate has listed the downtown Indianapolis Borders space on its Web site as a prime location for retail or a restaurant. Veteran retail broker Bryan Chandler, who is handling the listing, declined to comment.

The building at 11 S. Meridian St. was completed in 1908 as headquarters for Merchants National Bank. Before Borders, the space was used by Paul Harris Stores Inc. for its women’s clothing store and a J. Peterman Co. store. Harris filed for bankruptcy protection in 2000.

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