Capital Improvement Board set to buy Pan Am Tower for $10.5M

A 2019 photo of Pan Am Tower

The Capital Improvement Board plans to acquire downtown’s Pan Am Tower, a 12-story building across from the Indiana Convention Center, for $10.5 million.

The board, which oversees the convention center and Lucas Oil Stadium, is buying the property from Carmel-based Lauth Group Inc. as a strategic acquisition tied to the ongoing development of the 38-story Signia by Hilton hotel and a convention center addition on the remainder of Pan Am Plaza.

Andy Mallon, executive director of the CIB, said the agency expects to close on the purchase later this week and plans to continue operating it as a Class B office building for the foreseeable future.

The tower, 201 S. Capitol Ave., is the only outstanding piece of real estate on the plaza not owned by either the city or the CIB, after the remainder was acquired from Kite Realty Group Trust last year to move forward the $710 million, city-funded redevelopment project.

As part of the development, an undisclosed amount was spent on the foundation of Pan Am Tower to allow it to remain intact after the demolition of the Pavilion at Pan Am and the former ice skating rink, along with the subterranean garage.

Mallon said there are no immediate plans to renovate, convert or tear down the building.

“We’re not interested in tearing it down; we just put a bunch of money into shoring it up,” Mallon told IBJ. “We’ll just operate it as a commercial [office] building.”

The CIB’s purchase follows extensive negotiations with Lauth, which acquired the building for $13.8 million in December 2018. The 138,800-square-foot building underwent separate appraisals earlier this year, one for $13 million and another for just more than $12 million, Mallon said.

Lauth bought the building about 16 months before the pandemic began from San Francisco-based Coastal Partners LLC, which had acquired the property in 2003 from the not-for-profit Indiana Sports Corp. for $8 million. It spent an undisclosed amount on some renovations to the property, including improving the restrooms and adding various amenities.

While the building was more than 90% leased at the time it was acquired by Lauth, that figure has fallen to 70%, leading the property to quietly undergo a branding change from Pan Am Tower to Centricity earlier this year, with a focus on highlighting its proximity to the redevelopment project on the remainder of Pan Am Plaza.

The office tower was built in 1986 as part of the plaza’s initial development ahead of the 1987 Pan American Games.

The ongoing Pan Am Plaza project, when completed in late 2026, will add an 800-room high-end hotel to the northeast corner of the site, while an addition to the Indiana Convention Center will take up the central and southwestern portions of the former plaza. Construction on the project is about 13% completed overall, Mallon said.

The CIB plans to retain the Centricity branding, as well as move ahead with Lauth’s plan of finding a flagship tenant with which it could negotiate signage on the top of the building. The vacant top two floors have purposefully been withheld from the market by Lauth, which the CIB hopes to capitalize on as it looks to monetize the property.

The CIB earlier this month opened a permanent visitors center at the tower, known as The Index. The space, which first debuted as a pop-up during NBA All-Star Weekend, carries trinkets, gifts and souvenirs from The Children’s Museum of Indianapolis, the Eiteljorg Museum of American Indians and Western Art, the Indiana Historical Society and the Indianapolis Motor Speedway Museum.

During an Friday’s monthly CIB meeting, Mallon briefly discussed the plan to buy the property as part of a claim voucher request to sign off on an initial down payment for the property of $1.5 million, followed by the expenditure of the $9 million balance.

The CIB does not expect to carry debt on the building, he said, and the purchase will be part of the current year budget, separate from the 2025 budget approved during the same meeting that includes as much as $66 million for property acquisitions, largely tied to the proposed Major League Soccer stadium.

“We’re getting a valuable asset that is producing revenue, at a discounted price to control the site,” Mallon told the board. “It doesn’t get much better than that when you’re trying to buy property downtown, or any place, really. It’s just a really important, I think, step that we’re taking to make sure that all the hard work everybody is doing continues, and continues in that way that most benefits our capital assets.”

John Robinson and Kevin Gilligan with the Indianapolis office of Chicago-based brokerage JLL are the current leasing agents on the property.