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The Indianapolis-based firm behind plans to develop a new 21c Museum Hotel through the renovation of Old City Hall and the construction of an adjacent 29-story tower is asking the city for additional funding help.
TWG Development is set to request $66 million in lease revenue bonds from the Indianapolis Department of Metropolitan Development to cover the increasing costs of historical preservation work associated with the 116-year-old former municipal building at 202 Alabama St.
The project, known as the “Alabama Redevelopment,” calls for a 387-foot glass tower containing 186 apartments, 23 condominiums, 156 hotel rooms and 8,000 square feet of retail and hospitality space, along with a partial conversion of the former city hall building into an art gallery, as well as private office space.
The total cost is $249 million—a decrease from a previous estimate of $264 million, but still an increase of $109 million from the original budget of $140 million when the project was announced in August 2023.
Chase Smith, vice president of market-rate development for TWG, said the company began talks with the city late last year.
Under the proposal, the DMD will issue the bonds to the Circle Area Community Development Corp., a municipal institution with nonprofit status. It will also lease the property to Circle Area Community Development Corp.
The Circle Area Community Development Corp., in turn, will loan TWG the proceeds from the bonds with the developer making lease payments to the entity to cover the bonds’ debt service.
The Metropolitan Development Commission will hold a public hearing on the proposal Wednesday at 1 p.m., while the Indianapolis City-County Council is expected to consider the proposal during the Metropolitan and Economic Development Committee meeting on March 10.
Megan Vukusich, director of the DMD, said in a statement that the department is thrilled to partner with TWG on the project.
“This exciting development will bring additional housing options, retail spaces, office areas, and an art museum to the area, revitalizing a historic landmark while enhancing the community’s cultural and economic landscape,” Vukusich said.
The city has already committed $17.9 million to the project through tax-increment financing bonds. Smith said TWG is expected to receive $20 million from the Indiana Economic Development Corp. That funding will come from redevelopment tax credits and a $250 million gift provided by Indianapolis-based Lilly Endowment Inc. to support blight-reduction efforts and the creation of new arts and culture initiatives across the state.
TWG will also apply for federal historic tax credits “at the appropriate time,” Smith said.
City officials selected TWG Development’s proposal over five others in August 2023.
The historic building and its adjacent parking lot have been fenced off for a year while awaiting construction. Smith said TWG expects to begin that work late this summer. The developer plans to rehabilitate Old City Hall and build the tower simultaneously.
The 156-room hotel is expected to occupy floors six through 13 of the 29-story tower, while a lobby, restaurant and curated retail space would take the ground floor. The apartments are to occupy floors 12 to 23 and condos to occupy floors 24 to 27. The garage will be on levels two to five.
A public museum operated by Louisville-based 21c Museum Hotels will take over the first two floors of Old City Hall, while the top two floors will be used as private office space.
“We’re working with potential tenants right now,” Smith told IBJ. “There’s a lot of interest.”
Built in 1909 and 1910 and clad in Indiana limestone, the four-story Old City Hall housed the Indiana State Museum from 1966 to 2001 and temporarily housed the Central Library during renovations to the main library building early this century.
Editor’s note: This story has been updated with new information to clarify the sources of the state funds allocated for this project, the height of the tower, hotel room numbers, the amount of tax-increment financing bonds approved by the city for the project, as well as the number of specific unit types.
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TWG is going to f this up so bad.
Murray, the only guy who chooses both gloom and doom for a mindset. SMH…
Acknowledging that nearly all of their development in Indiana is substandard, and that development they do out of state is far better than what they do here is hardly doom and gloom. It’s simpletons like you that are the reason Indy is an average city, at best.
Let’s go TWG. Exciting development. Right partner. Great next step for MLS stadium and Indiana Fever Center. A great conduit for Mass Avenue and downtown entertainment district.
They really need to get a move on this. It is crazy there is only 1 hotel near Mass Ave. Once this is completed it will completely change that part of the city because it has been dead for over 15 years.
The screen over the parking garage is brutal.
Definitely a stain on an otherwise pretty nice design
There is literally going to be an art gallery next door, and art installations are core to the 21C brand. Why not turn those screens into a permanent installation?
Robert, I think they were emulating the gorgeous IPS screens on Delaware st. 😂
The design is atrocious. Just tear down Old City Hall if you’re going to build this vanilla monstrosity over the top of it.
Their initial rendering of the glass tower was a lot better. Why does this ALWAYS happen with developments in Indianapolis? Seems like we always go for the cheaper look. Frustrating, when our peers like Nashville, Cincinnati, Louisville and Columbus always seem to get it right. 😡
The answer is because we are not really their peers, but a tier beneath.