City views soccer stadium as catalyst for growth

With funding plans for a proposed soccer stadium clearing another hurdle this week, Indianapolis leaders, developers and brokers are beginning to evaluate the impact such a project could have on the near-east side of downtown.

Mayor Joe Hogsett’s administration wants to build the stadium on about 16 acres east of Gainbridge Fieldhouse, in a part of the city’s central business district where vertical development has generally been stifled over the past 40 years.

The proposed site encompasses a swath of parking lots, small office buildings, a hotel and the Indianapolis Downtown Heliport property. A railroad track defines its southern border, and to the north and west, a neighborhood of apartments, restaurants and entertainment offerings has cropped up in recent years as downtown has grown eastward, toward the interstates 65/70 leg.

The Hogsett administration sees a soccer stadium as “the connective tissue” between development in the heart of downtown and numerous other projects now underway farther east on Washington and Market streets, said Chief Deputy Mayor Dan Parker.

“The potential for this site is that it could really fill out the remainder of what we consider the downtown area inside the interstate,” Parker said.

More than 800 apartments have been constructed near the stadium site over the past decade, across at least three projects—The Artistry, 360 Market Square and The Grid—and experts say a stadium would likely drive additional housing, particularly for young professionals who want to live in or near an entertainment district.

Separate from the stadium, the city later this year plans to begin demolishing the former Jail I property at Maryland and Alabama streets. Parker said the move will create an opportunity for more housing and entertainment offerings on a parcel adjacent to the proposed stadium property at 355 E. Pearl St. and directly south of the Julia M. Carson Transit Center public transportation hub.

And officials don’t see the proposed soccer stadium as a stand-alone project, the way Lucas Oil Stadium and Gainbridge Fieldhouse were built. Instead, the city would likely seek a developer who would combine the publicly financed and city-owned stadium project with privately funded components, including retail, restaurants, office and housing.

Parker said the administration wants housing, in particular, incorporated into the stadium campus. That’s even as other apartment- and condo-focused developments proceed on the east side of downtown, including a residential tower next to Old City Hall, a mixed-use project underway at the City Market block and other developments in the Cole-Noble Commercial Arts District just north of the stadium site.

“I think the housing opportunities have to be part of the mix as a broader part of our downtown resiliency strategy,” Parker said. “We need more residents down here full time to build up the downtown population to critical mass, making it its own self-sufficient area of the city.”

Building up the neighborhood

Experts said that in addition to spurring new development, a stadium project would also benefit apartment properties that already exist nearby or are under construction.

For example, The Artistry apartment complex at 451 E. Market St., directly across Washington Street from the proposed stadium, is on the market again for an undisclosed amount after being listed in 2022 for $140 million. Steve LaMotte, managing director of the Indianapolis office of Maryland-based brokerage Walker & Dunlop, said the city’s effort to attract Major League Soccer is catalyzing interest in the property, even though a deal isn’t done.

Parker and other city officials have emphasized that the stadium will be constructed only if Indianapolis secures a commitment from MLS to put a team in the city.

“This is a complicated undertaking by the city and Major League Soccer, and while nobody’s taking anything for granted that it will come to fruition, there’s clearly been a strong city endorsement for this site,” LaMotte said. “We’ve seen the will of Indianapolis to craft itself into a world of sports capital of the nation, if not the world, and I think that when you consider that and what the city has created … it increases the probability in one’s mind that this can actually be accomplished.”

LaMotte said a company that buys The Artistry could rebrand the property and raise rents because of its proximity to the proposed sports venue. But, he added, many current residents might not benefit from the new stadium.

“Investors and capital sources have a much longer horizon on their view, but you think about a renter—they’re signing up at Artistry to live there for the next 12 months; that’s their horizon,” he said. “… It’s not until the stadium is actually open and operating, where renters can go to games and can walk across the street to a village that just doesn’t exist today, that they get the benefit of that.”

LaMotte added that about 40,000 square feet of retail space on the south side of The Artistry, along Washington Street, could see a boost from the anticipated project.

Jim Crossin is vice president of development for Indianapolis-based Flaherty & Collins Properties and has been involved in numerous downtown projects over the past 20 years. His company previously proposed using the heliport site and adjoining property as a location for a soccer stadium. That proposal never led to any action, but Crossin said he still believes a stadium could be “a shot in the arm” for the near-east side.

“Any redevelopment contributes to positive momentum in an area,” he said. “It would be great to get a corporate headquarters or land something off this project.”

Walker & Dunlop’s LaMotte added that the opportunity created by a stadium is “huge” because its location could bridge downtown with Fletcher Place and Fountain Square, just southeast of the proposed stadium site, as well as neighborhoods farther east, including Holy Cross, just east of interstates 65/70.

“It fills in a zone that has been more characterized as rail line and heliport than anything else in recent memory and is transformational in every way,” LaMotte said. “As far as how far it radiates, I would say it’s certainly more than a few blocks—it’s several blocks in every direction that will feel the impact of this.”

Missed opportunity

Parker acknowledged that as efforts on the stadium site continue—the city hasn’t yet acquired any of the land it would need for the project—more conversations will be necessary to ensure a stadium aligns with what downtown residents are looking for.

“There’s a lot more opportunity for outreach, and there also needs to be neighborhood input into the development,” he said. “As we look towards not just the stadium, but development around the stadium itself, there needs to be a lot more discussion.”

Consideration of residents’ needs—and follow-through—has been a sore subject over the years in the area surrounding Lucas Oil Stadium, where some residents and business owners say the city missed an opportunity to create a stadium district with additional private investment.

In the nearly 17 years since the stadium opened, neighborhood development has been tepid. Much of the area remains a sea of parking lots, dotted by a few event facilities, bars and a few modest hotels. About three blocks southeast of Lucas Oil Stadium, Indianapolis-based TWG is preparing to open Rise on Meridian, a $58 million, 269-unit apartment complex. In addition, a 2-acre parcel at the intersection of Missouri and McCarty streets is expected to be developed into an apartment project in the coming years.

Stephen Alexander, owner of Indianapolis-based Prince Alexander Architecture, has been trying to drive development on the south side of downtown for several years, including as part of the Stadium Village Business Association. The group was created in 2007 with a goal of using Lucas Oil to drive more development to the neighborhood. But he said the group needs more city help to turn the stand-alone stadium into something more.

“There’s never been a big rollout of what the city’s master plan for the area is … where everybody that’s in the area came together to share that vision,” Alexander said. Stadium Village is “a promotional group advocating for the development; not all of us are architects and developers, and even fewer have money to put into projects.”

Alexander, who in recent years has been able to invest in projects that include hotels and a simulation golf facility on Dover Street, said the biggest risk for downtown’s east side with the proposed stadium is whether the city will push for strong projects to envelope the venue and create a district.

Parker said city officials would like to see local developers become part of the ownership group that will try to bring an MLS team to Indianapolis and build projects adjacent to the stadium. The city has not identified the potential investors in a soccer team and says no group has officially formed.

“Our hope would be that we would have sort of a multitude of developers involved to help bring a lot of this [development] to fruition at the same time” as the stadium, Parker said.

Paying for a stadium

The city’s stadium funding plan assumes private development will follow the stadium. That’s because it relies on a designated professional sports development area—which captures tax revenue that would otherwise go to the state—to pay off the stadium bonds. The more private development that takes place within the zone, the more tax revenue the city will capture for the project.

On Wednesday, the city’s Metropolitan Development Commission gave final local approval needed to establish the PSDA. The sports zone comprises a non-contiguous selection of downtown properties, including a number of parcels in the immediate vicinity of the proposed stadium site.

Already, $3.2 billion in investments is planned for parcels in the sports zone. And experts say a stadium project could generate an additional $500 million to $1 billion in private investment, which could result in tens of millions of dollars in additional tax revenue annually.

This is the city’s second try at creating a sports development zone to capture revenue for a stadium project. Last year, the City-County Council approved a zone that included the former Diamond Chain manufacturing site on downtown’s western edge and the former GM stamping plant site across the White River from it, where Elanco Animal Health is developing a new headquarters campus.

That zone was meant to generate revenue for a stadium to be built on the Diamond Chain property—owned by Indianapolis-based developer Keystone Group—as a home to the Indy Eleven, a soccer team founded by Keystone owner Ersal Ozdemir that plays in a lower-tier league.

Keystone and Ozdemir had planned to make the stadium the centerpiece of a much larger mixed-use district that was to include apartments, office, a hotel, retail and entertainment space. But in March, the Hogsett administration ended negotiations with Keystone about that project and switched focus to the heliport site and a different potential ownership group.

Parker said when the city shifted gears away from Diamond Chain, there were few stadium options on the table because of the amount of land required and a desire to incorporate private development into any development.

He said the heliport site “provided a more advantageous situation to help finance the stadium, because of the [development] pipeline that is already in place here on the near-east side of downtown.”

City-County Councilor Kristin Jones, who represents the district that covers both the Diamond Chain and the heliport sites, initially opposed the Hogsett administration’s move away from the Diamond Chain site and the Keystone proposal. But she told IBJ she is open to working with the administration to make the MLS dream a reality at the new location.

Still, she said numerous challenges could stand in the way of the site being a feasible location for a stadium, including concerns from her constituents about parking and about giving up their land for development.

“Can we get through those challenges? If we can, then let’s do it,” she said. “But I need to know that my constituents—those business owners who are concerned—are OK with me advocating for that. But if I can, then let’s put in a world-class stadium right there. I just want to make sure it can work.”•