Eastgate redevelopment reaches crucial crossroads

The redevelopment of the former Eastgate shopping center is at a crossroads three years after its purchase by a local technology firm.

Lifeline Data Centers bought the 40-acre property in May 2008 from a Dallas entity, JTL Capital LLC, that had expected to tear it down. Lifeline said it would instead invest $23 million to turn the 450,000-square-foot vacant retail center into a data hub.

So far, only about $2.5 million has been invested, but if the Indianapolis City-County Council on May 16 approves plans by the city’s Department of Public Safety to lease 76,000 square feet in the building, Lifeline expects to invest about $10 million more through the end of the year, said Lifeline’s owner, Alex Carroll.

“We’ve always assumed we would renovate it into a high-security office environment,” Carroll said. The city lease would lock in that strategy, precluding the use of the building by retailers or other businesses that welcome the public into their space.

“Now that we’ve cast our lot with high security, we have a clear green light on what we need to do to renovate” the property, Carroll said.

He said much of the building will get a new roof. The exterior will be tuckpointed and painted white, and the perimeter will get a masonry fence and extensive landscaping.

Before that happens, the city must make good on plans to consolidate several public safety units, including local operations of the Department of Homeland Security, in the southwest corner of the building. The city had considered leasing up to 210,000 square feet for $5.79 a square foot, or about $1.2 million a year, but the size of the lease was scaled back. It’s possible the city’s Regional Operations Center, as it will be called, will expand in a subsequent phase.

If the smaller lease is approved by the City-County Council next week, the public-safety facility would become the building’s second-largest tenant. Lifeline occupies about 80,000 square feet at the northwest corner of the building in a former Burlington Coat Factory store. Lifeline hosts secure data networks for a variety of clients.  

Carroll said negotiations are in progress with a tenant that would take another 15,000 square feet at the north end of the former mall. The broker of record for the space is Lifeline Land Ventures, which is staffed by Carroll’s wife, Dana.

By 2015 he projects his company will need additional space for its clients and will build a new structure to the east of the mall, wiping out some of the property’s 30 acres of parking.

There’s already activity to the west of the mall, along Shadeland Avenue. Construction is about to begin on a 4,000-square-foot building that Lifeline will lease to Tie-Dye Grill, a restaurant moving from 1311 N. Shadeland. Carroll said the restaurant site is the only outlot he anticipates developing. Most of the other outlots on the property were developed before Lifeline bought Eastgate. Among those is a former movie-theater building that Carroll is trying to buy and demolish.

People who have a long history with Eastgate are encouraged by the activity.

Steve Graham, an oral surgeon whose practice is east of the mall property on Shortridge Road, remembers visiting the mall when his uncle, an orthodontist, had a practice there. Graham eventually leased space near the mall for his own practice and in 1990 built his offices on Shortridge Road.

“At some point in time I’d like to sell my building. No one’s going to buy it with a dilapidated mall across the street,” said Graham, who is especially interested in seeing improvements to Eastgate’s exterior.

The mall, built in 1957, was once one of the city’s premier shopping destinations. It was enclosed around 1970 to keep up with newer malls, but its fate was sealed by the construction of Washington Square Mall a few miles to the east in 1974.

In 1982, Simon Property Group—then known as Melvin Simon & Associates—bought the property, remodeled it and repositioned it as a discount retail center. Simon sold it in 2002 to a North Carolina investor. But by then it was in need of major reinvestment that never materialized.   

Sharon Tabard, who has been president of the Eastgate Neighborhood Association for 22 years, has seen plans for redeveloping Eastgate come and go. But the Carrolls, she said, are the first owners to work closely with the neighborhood.

“Alex and his wife have been wonderful,” Tabard said. “We are thrilled to death.”