Ballard plans new redevelopment effort for Market Square site

Indianapolis Mayor Greg Ballard is expected to unveil a new effort to redevelop a downtown parking lot that previously was home to Market Square Arena.

Ballard, in his annual State of the City speech scheduled for Friday afternoon, plans to call for new proposals for the northern 1.96 acres of the site directly east of the Indianapolis City Market at the northeastern corner of Market and Alabama streets.

The city expects the proposals to include a high-rise building with a major retail component. One of the key considerations will be a commitment from a "significant" retailer unique to downtown, according to a fact sheet provided by the city.

Other factors include "maximization" of the project's density and "minimization" of taxpayer contributions in the form of TIF revenue or other incentives.

Deron Kintner, executive director of the Indianapolis Bond Bank, said the city wants something well beyond four stories of apartments over one level of retail at the site, which has an appraised land value of $5.6 million.

Ideally, the city hopes to have 200 to 300 residential units that would be visible from the interstate, Kintner said.

“We need to enhance the skyscape. That’s a hope, again,” he said. “Being the former Market Square Arena site, it’s got some history.”

Market Square Arena was built in 1973 for $23 million and served as the Indiana Pacers’ home before it was imploded in 2001. Major events at the arena included Michael Jordan’s first return from retirement in 1995 and Elvis Presley’s final live concert in June 1977.

"It has been nearly 36 years since 'Elvis left the building.' It is time for the MSA space to make its architectural mark again on our city, to bring new residents and retail to the near-east side, and to put that prime piece of real estate back on the property-tax rolls," Ballard plans to say in his address, according to an excerpt provided to IBJ.

The area is now segmented into parking lots from Washington Street north to Wabash Street. City officials hope a project on the northern half will help generate demand for future development on the southern half.

Ballard’s push is the latest among several attempts by the city to develop the key piece of real estate.

In 2004, the city approved a $140 million development on four acres at the site that included twin 29-story towers with 450 condominiums, 175,000 square feet of retail and 700 parking spots. But the project went through several changes and eventually fell through after the developer failed to secure bank financing because it did not pre-sell enough condos.

The city received two more proposals in 2007 that ranged between $130 million and $150 million. The deals crumbled after negotiations with then-Mayor Bart Peterson’s administration over incentives.

Little progress has been made with the Market Square Arena site since then, thanks in part to a sour economy.

Developers told the IBJ in January that the area could have suited a potential new soccer stadium. But Ballard’s plans to split the MSA site would prevent that from happening in that location.

Mike Wells, president of REI Real Estate Services LLC in Carmel, said it seems like the city made the right move by dividing up the land into several lots, which total 10 acres.

“I think what they’re doing makes a lot of sense. The bigger deals are much harder to put together,” Wells said. He noted an abundance of other sites in town, including the former General Motors plant property next to White River State Park, that could house the soccer stadium.

Combined with other projects proposed in the area, such as the $30 million Artistry project in the former Bank One Operations Center and the  $17 million transportation hub—values of the remaining Market Square property will likely increase and lure a retailer, Kintner said.

He said the city would like a big-box retailer next to the City-County Building. He did not list any specific chains but said Target is the “more common one” that downtown residents mention.

“We haven’t spoken directly to any retailers. We don’t have any preconceived notions,” Kintner said. “We do have an idea that space could be beneficial by providing the day-to-day amenities to people who live in and around downtown.”

Also included in Friday’s speech, Ballard plans to discuss the Neighborhoods of Educational Opportunity reform initiative, as well as an ordinance to more strictly regulate panhandling.

The State of the City address is scheduled for 1 p.m. at The Alexander hotel, 333 S. Delaware St.