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Negotiations between the city of Indianapolis and Ambrose Property Group broke down Wednesday afternoon, after city officials offered to buy the former GM stamping plant site from the developer for $6 million.
Ambrose rejected the offer, which came during a meeting at Ambrose’s headquarters on Monument Circle at which the two sides discussed their ongoing dispute over the city’s insistence that it acquire the property, using eminent domain if necessary. Ambrose put the site up for sale after announcing on Sept. 27 that it was withdrawing from the planned $1.4 billion Waterside development, but it says it has the legal right to sell to whomever it chooses.
While higher than the $3 million Ambrose paid for the site in 2018, the city’s $6 million offer fell way short of what Ambrose says appraisals it has obtained show it is worth. It says the appraisals value the 91-acre property at $65 million to $100 million. Ambrose has said it already has invested millions preparing the site for construction.
“After meeting with City officials today to discuss the property, it is clear that in a rush to ensure that no other developers could buy the property, the City unlawfully threatened to take the property through eminent domain without knowing how much it would cost, without knowing how the City would pay for it, and having forgotten that the City had a binding contract promising not to take the property by eminent domain,” Ambrose CEO and founder Aasif Bade said in a written statement. “ Given the City’s reckless approach, it is no surprise that the City today offered to buy the property for $6 million, far below its current fair market value.”
Representing Ambrose at the 40-minute meeting were Bade and fellow Ambrose officials Jason Sturman and Derek Naber, along with Ambrose counsel Jonathan Bunge of Chicago-based Quinn Emanuel Law. Representing the city were Thomas Cook and Scarlett Martin from the mayor’s office, corporation counsel Donnie Morgan and Faegre Baker Daniels attorney Scott Chinn.
The meeting had been scheduled to last one hour. Asked for comment afterward, Morgan said in a statement: “Ambrose’s continued posturing, and its characterization of today’s meeting, are disappointing. We nevertheless remain optimistic that we can move forward with productive conversations about the future of this critical piece of property.”
The city and Ambrose have been publicly sparring since Oct. 2, when the city sent a letter to Ambrose saying it wanted to buy the property so that it could control its fate and would use eminent domain if necessary.
On Tuesday, Ambrose escalated the dispute by sending the city a notice of tort claims, a precursor to filing a lawsuit. Ambrose alleges the city has slandered and defamed the firm, making a private sale of the property to one of the multiple developers interested in it “impossible.” Ambrose contends it has suffered losses of $30 million.
“If the point of the City threatening to take the former GM stamping plant site by eminent domain was to ensure that the property be developed quickly, the City’s unlawful threats are the worst way to go about it,” Bade said in his statement. “For no good reason, the City’s illegal actions have brought Indianapolis’ largest and most promising redevelopment project to a screeching halt.”
Ambrose also doubled down on its claim that the city is inappropriately pursuing eminent domain. As part of a 2018 project agreement both parties signed, the city said it would not use eminent domain.
“We reminded the City that it made a binding promise to not use eminent domain because, in 2017, the City threatened to take the property and we needed reassurance that the City would not do so again,” Bade said. “The City either forgot that it had made this agreement or intentionally breached its promise.”
But under Indiana law, municipalities have a constant right to eminent domain that supersedes contractual language. In its letter sharing plans to sue the city, Ambrose said city officials ultimately committed fraud by consenting to something that could not be enforced.
He said that if the city believes its offer of $6 million is fair, it “should rescind its unlawful threat and compete with other buyers in the free market.”
Ambrose agreed to purchase the GM stamping plant property in May 2017 from the Revitalizing Auto Communities Environmental Response, or RACER, Trust—which was formed during GM’s bankruptcy to prepare former plants for redevelopment. The developer was chosen by the city and RACER from among four bidders for the property.
Under the 2018 project agreement, the city agreed to pay $26.8 million toward the first phase of the development—which at the time was expected to cost $92.5 million.
Ambrose later asked the city for additional incentives, as it increased its planned investment in the site to nearly $300 million. The parties negotiated but were unable to come to terms on additional incentives. Weeks later, Ambrose announced it was withdrawing from the project.
The site was 103 acres before Ambrose this fall sold 12 acres to the Indianapolis Zoo for $3 million.
It is marketing the remaining 91-acre site through JLL.
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So Ambrose gets the property for a steal, messes around not really accomplishing anything on the site, and wants to turn around and make tens of millions in profit for doing nothing? Further, they have the gall to accuse the city of slander when their own actions speak so poorly of the company and its leadership? They even begged the city for MORE money even after their initial agreement. Ambrose has been nothing but a parasite to the city and this development and if they had any ethics would just donate the property to the city and take the tax writeoff.
“While higher than the $3 million Ambrose paid for the site in 2018, the city’s $6 million offer fell way short of what Ambrose says appraisals it has obtained show it is worth. It says the appraisals value the 91-acre property at $65 million to $100 million. Ambrose has said it already has invested millions preparing the site for construction.” They invested MILLIONS to prepare the site for development, therefore it is ready to be developed on, which also means it is worth way more that its market value was when it was obtained…
“Under the 2018 project agreement, the city agreed to pay $26.8 million toward the first phase of the development—which at the time was expected to cost $92.5 million.” This doesn’t mean they asked for 92.5 million, this means that’s what the overall expected cost was.. but the city agreed to pay 1/3 of that expected cost.
You should read the article a little better. The city is low-balling Ambrose, point blank.
So, Anne, Ambrose is a failed flip developer.
As is common, you lose money on these deals when you fail to flip a piece of property.
They also wasted 3 years of everyone’s time while begging the city for more money and then throwing a tantrum after they did not get their way at the taxpayers expense…
In the long lifespan of a metropolis what is the value of a site that is walkable to some of the municipalities‘ Crown Jewels? The city had their chance to buy it through eminent domain years ago and they sat back and watched private developers compete for it and now they step in???
Yes, exactly!!!
Millions in preparing the site? I drove past it everyday for years, and if somebody spent millions on that site, they got ripped off, because nothing changed.
What did these people expect the city to do when they publicly announced they were not going to do anything.
I understand development fees but that kind of planning happens on paper, and $3,000,000 profit will pay for a lot architects and engineers.
Was this the plan all along for Ambrose? Grab a large parcel then plump the value and project and now try to make millions for nothing they did. They were always in it for a quick buck.
This is nothing more than business economics . . . $6M pales by comparison of FMV to the low ball offer. Aasif passes the stupid test!
Ambrose sold a peice of the property to the zoo behind the communities back. They used Eli Lilly grant money that was for the arts to brand and pitch the property knowing they would sell all with the help of CICF……. Then they abruptly announced a stop to development and a plan to sell with a BS reason without talking to the community or the city.
Now they are trying to play victim and blame the city for their failure. It’s disgusting they have the nerve to act like the same plan they cant execute is gonna be able to be done by another developer who pays over 10x the price they did for the same property. Ambrose is destroying their brand in a attempt to run from their commitments to develope the site and make a quick buck off the community they used for the last 2 years.
This community made millions in commitments and put other projects on hold to support this vision. In return Ambrose sells to the zoo against the will of the residents, wastes hundreds of thousands in lilly grant money and put our community behind atleast another 2 years.
Ambrose is legally unable to make a contract with the next developer to ensure the mixed use plan the community supported. The next developer will still require millions in help from the city and Ambrose is claiming a x10 to x20 times higher value now then when they purchased 2 years ago.
This community deserves better. This city deserves better. CICF should be ashamed Ambrose CEO is on their board. The zoo should be investigated for Ambrose CEO being on their board and the community should be compensated for the damages caused by this developer.
This whole situation is disgusting and Ambrose should be ashamed of themselves and they way they continue to use this community.
Spot on Jon H. They have made their initial 3 million back in just the parcel the zoo purchased and now they have the gall to think the site is worth 60+ million? Would love to see a list of what actual shovel ready improvements they have made to the site that wasn’t paid for by the city. City just need to tell them they will deny any zoning changes to the site and pretty much make it impossible to sell and be sure that they pay their full shared of property taxes on that 60+ million they think it is worth.