Builders pine for acreage: Earlham expects big bucks from land freed by deal

Like vultures circling a lone man in the desert, local developers and home builders are jockeying to swoop in and take 413 acres of prime Carmel land when owner Earlham College gives it up following its settlement with Conner Prairie.

But Earlham, recognizing the prominence of the last large undeveloped tract in eastern Carmel, isn’t going gently. Interested parties-more than two dozen, at last count-will be required to undergo a formal proposal process before one can feast on the farmland.

Locally based NAI Olympia Partners Ltd., which has been hired by Earlham to manage the sale of the real estate along 146th Street and River Road, plans to issue a request for proposals from prospective buyers in the coming weeks. An Earlham panel will review the proposals and select a few, probably three, to be examined more extensively. A decision could come by year-end, said Olympia principal Gus Miller.

Issuing an RFP for vacant suburban land is almost unheard of locally. It’s a process more commonly used by government to jump-start urban development, such as the redevelopment of downtown’s Market Square Arena site, where project design, not price, plays an important role in determining the winner.

Developers in highly competitive markets, such as Las Vegas or southern Florida, are used to bidding for coveted land, but the process doesn’t sit well with local developers accustomed to cementing deals through friendly relationships formed over months or even years.

“We’d rather not” go through the RFP process, said Pedcor Investments’ Bruce Cordingley, adding, “But that doesn’t mean we won’t.”

Several interested developers, including Cordingley, said they understand why Earlham decided to use the unusual method to dispose of the land, which it has owned since 1964. The size of the parcel-about two-thirds the size of downtown Indianapolis’ Mile Square-and its desirability warrant it, they said.

It’s also the fairest way, said Miller, who is working on the sale along with Olympia’s Stephen Daum. The two were hired by Earlham in January and since then have consistently fielded calls from eager developers wanting to make an offer. One developer, whom Miller and Daum declined to name, had a picture of the property hanging on the wall behind his desk in the same manner an avid golfer might display a print of the 17th hole at St. Andrews, as a kind of Holy Grail of land development.

The property’s Carmel address, gently rolling topography and proximity to Clay Terrace and a new Simon Property Group Inc. retail center at 146th Street and Interstate 69 combine to make the land one of Hamilton County’s most coveted tracts.

No one’s speculating on how much money the total parcel might fetch. Under the separation agreement signed last week between Earlham and Conner Prairie, Earlham will pay $6.5 million to the newly independent museum either from sale proceeds of the land or a mortgage secured using 335 of the 413 acres as collateral. Furthermore, if proceeds from the sale of the 335-acre parcel exceed $19.5 million, or $58,000 per acre, Earlham will split the overage with Conner Prairie 50/50.

The tract is unlikely to bring prices seen for smaller tracts near the most upscale developments in west Carmel, which have reached $90,000 to $125,000 or more per acre, developers said. Elsewhere in the Carmel area, residential land prices average from $50,000 to $80,000 per acre.

Earlham’s deed on the property dates to Eli Lilly’s original bequest to the college, although the land has never been used as part of Conner Prairie museum and the college has always been free to sell it. Even if the July 5 agreement is delayed or isn’t approved by the judge in the case, the college is expected to go ahead with the sale.

As part of the bid packet developers will receive around the first of August, Earlham will include engineering and environmental surveys of the land. That kind of information doesn’t usually become available until a contract is signed and the potential buyer hires firms to assess the site. The availability of the surveys will even the playing field for those responding and will help avoid delays once a bidder is selected, Miller and developers said.

A seven-member panel assembled by Earlham, including several trustees of the Richmond college, will review bids and make recommendations to the full board of trustees. They’ll be looking at price, the likelihood of the proposal to receive zoning approval, and overall quality of development, Miller said.

The city of Carmel has already reviewed preliminary plans drawn up by Earlham earlier this year that envisioned more than 1,000 homes on the site.

Most developers said they envision mixed-use residential development, with a variety of housing types, architecture and price points.

Carmel Mayor James Brainard said the city will be looking at more than lots per acre.

“We’re looking for a project the community can be proud of with minimum impact on schools and infrastructure,” Brainard said. “That could mean higher density if we get the things we want in terms of design and architecture.”

Some developers, including Brenwick Development President George Sweet, said they might propose a so-called traditional neighborhood development, a la Brenwick’s Village of WestClay.

All said they expect to test the limits of their creativity in hopes of winning one of the biggest land prizes in Hamilton County.

“It’s an opportunity for the city and the area to take a large piece of property and be able to make it into a masterpiece,” said Paul Shoopman, president of locally based Indiana Land Development Corp. and former owner of Dura Homes. “We’d like to show this as a success story for ourselves and make something the city and the college would be proud to be a part of.”