Editorial: Plans to revamp AT&T tower, Illinois Building are welcome

Any time the city rolls out a big incentive package for a private developer, IBJ believes it is appropriate to ask whether that’s a good use of taxpayer dollars—and whether the project would have been built without the city’s financial support.

We think the city’s plan to provide $16.7 million to help finance construction for two Keystone Realty Group projects downtown totaling $141 million stands up to such scrutiny.

The company—led by Ersal Ozdemir, owner of the Indy Eleven soccer franchise—is proposing a $61 million transformation of the mostly vacant Illinois Building near Monument Circle into the state’s first Intercontinental Hotel. It’s also planning to spend $80 million to overhaul the nearly vacant 23-story AT&T 220 Building at 220 N. Meridian St., converting it into a mixed-use tower containing three restaurants, 131,000 square feet of office space, 160 apartments and more than 300 parking spaces.

Both buildings have been problematic for decades, and if private forces alone could have gotten them rehabbed, it would have happened a long time ago. Sprucing up two properties within a block of Monument Circle will add to the vibrancy of one of the most important parts of downtown.

The city is expected to eventually issue $17.5 million in developer-backed bonds to help finance the project. The type of bonds is important—and it’s a switch from the practices of past administrations, which used city-backed bonds for such projects.

The developer-backed bonds will be paid back using tax dollars the projects generate—but if that revenue is less than what’s needed, Keystone will be on the hook for the shortfalls.

As a result, we feel good about these projects and the city’s support for them.

These are two key downtown buildings that have been largely stuck in limbo.

Keystone purchased the AT&T building last year from Cleveland-based Geis Properties, which bought it in 2013 from AT&T. But Geis struggled to find tenants, saying a lack of dedicated parking hampered those efforts.

Adding residential, retail and parking to the b]uilding should be a boost to that part of downtown. And Keystone’s plans to remake the street-level plaza there is more than welcome.

It seems just as crucial to make headway on the historic, 150,000-square-foot Illinois Building, which was built in 1926. Keystone bought the Illinois Building in 2013 from HDG Mansur, which had owned it since the 1980s.

At the time, the building was vacant. It had last housed a food court and a gym, both of which closed in 2003. A few years later, the building landed on the Indiana Landmarks “10 Most Endangered List.”

Since Keystone took over the property, it has located a Giordano’s pizzeria and Hyde Park Prime Steakhouse on the building’s first floor. But its initial plans for a Canopy by Hilton hotel for most of the building fell through, leaving the tower—a block from both the Circle and the Indiana Statehouse—empty.

Locating the Intercontinental Hotel in the building is a coup. There are about 180 Intercontinental Hotels in 60 countries, but only 26 in the United States. The nearest is in Chicago. Having the luxury brand downtown—along with the Conrad and Le Meridien—could help lure more high-end events to the city.

We encourage tough questions anytime taxpayer money is used for private projects. But we support these ventures and believe they will be meaningful for downtown.•

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