City takes next steps to redevelop troubled Towne & Terrace property

Residents at Towne & Terrace, a blighted and crime-plagued residential area at 42nd Street and Post Road in Indianapolis, will soon be offered a fair-market price for their units and relocation assistance as the city begins taking ownership and demolishing properties.

Demolition of a building already owned by the city at the site began Friday morning.

Towne & Terrace has seen at least a dozen criminal homicides since 2013, when a court battle between the homeowners association and the city began under former Mayor Greg Ballard. The HOA, Towne & Terrace Corp., filed for bankruptcy last year.

The bankruptcy filing made the property owners more willing to comply with city requests and, in September, the court battle came to an end with a $200,000 settlement and more favorable terms for city officials.

Now the city intends to redevelop the site, much like the nearby Oaktree Apartments, which were acquired through eminent domain and demolished. The Indianapolis Department of Metropolitan Development worked with community leaders to create a redevelopment plan for that site and is now accepting developer proposals.

Unlike Oaktree, Towne & Terrace includes a hodge-podge of owner-occupied and rental properties, which complicates the acquisition process. The city must attain 152 parcels from individual owners in order to demolish the larger structures.

With relocation specialists, negotiations to purchase units will begin in the second week of May. By the end of 2024, city officials hope to have acquired and relocated all residents.

The plans to demolish still have to be approved by the HOA.

Relocation of residents

The process began in October with knocking on doors, said Aryn Schounce, chief policy officer with the Department of Metropolitan Development and the Department of Business and Neighborhood Services. The Marion County Health Department, city police and workers with DMD and BNS knocked on every door at the property to assess the needs of residents.

The city still does not have an accurate count of how many residents live in Towne & Terrace, Schounce said. It appears that 80% of the units are occupied, including an estimated 20 that are owner-occupied.

The community outreach so far has shown that many residents don’t speak English as a first language. The city is contracting with Luna Language Services to help residents who speak Spanish or Haitian Creole.

There are 258 individually owned parcels on the property and the city owns 106 units.

An information session was held for owners and tenants on April 22 at nearby Mount Carmel Baptist Church. Individuals representing 72 properties attended the session.

In the second week of May, negotiations will begin with property owners to purchase units. The city will be offering fair market value of the units, not the assessed value, to the owners.

Under the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act, relocated residents are entitled to relocation assistance. Two firms are being contracted to help relocate residents: Beam Longest & Neff and First Phase. 

Right now, some property owners are hesitant to sell to the city. Schounce said that might change once residents know what they’re entitled to. Others might have problems trusting the government for reasons including U.S. residency issues. The city is providing support to these individuals.

If owner-occupants demand an unreasonably high price, Schounce said eminent domain is an option. Under eminent domain, the city would offer up to 150% of the fair market value to the owner-occupants.

For renters, the city will pay out 42 months of rent-differential payments. New homes must be comparable and fit federal guidelines for being decent, safe and sanitary.

Schounce is anticipating that residents will mostly be eager to move. Others might not.

“We are sensitive to that,” she said.

Once an offer has been made and adequate housing has been found for residents, they have a minimum of 90 days to relocate. City officials say they aim to provide residents with much more than that minimum.

Some units are owned by out-of-state landlords. For the most part, these owners have been cooperative, Schounce said. At least one property owner with tenants has rejected the idea of selling the property, but Schounce said that may change once negotiations begin.

City leaders have emphasized the importance of informing residents. Two outreach specialists have officers in nearby Mount Carmel Baptist Church and have been assessing the needs of tenants and owner-occupants and providing city resources.

“The overarching response is that they’re happy we’re here,” Rockea Bell, an outreach coordinator, said.

A fresh start

The demolition of properties at Towne & Terrace could mean the end of the site being a longtime hub for drug dealing, violence and dilapidated buildings. Built in the 1960s with 222 condominium units, the once-coveted condos fell into disrepair after the closure of Fort Benjamin Harrison in 1991.

Schounce said police have called the development “truly a hub for criminal activity for the entire county.” Officers have attributed the crime to the layout of the site, not the residents.

There is just one way in and out of the complex through Brentwood Drive, and areas like Essex Court are wholly sheltered from public view by trees and townhomes, Schounce said.

Right now, 32 structures are slated for demolition, said Rusty Carr, interim director of the DMD. These structures are targets for demolition partially because their removal will provide an improved sightline for officers to police the area.

In 2020, the court-appointed receiver advised that the best remedy for the city-owned properties was demolition, but the HOA pushed back against the recommendations. Now, with cooperation from the HOA, the city will acquire and demolish all properties. But city officials say residents will play a part in choosing a redevelopment plan for the site.

“This is still a thriving community,” Schounce said. “This is very much a neighborhood.”

Demolition is likely to lag behind the acquisition and relocation of residents, which officials hope to wrap up by the end of 2024. By going in phases, the city will knock out several buildings at a time. 

The entire process will be funded with $5.4 million in American Rescue Plan Act funds and might be bolstered with upcoming city budget allocations.

Corrections: This story has been updated with the proper spelling of Aryn Schounce’s last name and the correct number of individually owned parcels on the property.