Downtown heliport’s exit could clear way for redevelopment

The Indianapolis Airport Authority’s plan to sell off the Indianapolis Downtown Heliport is expected to open nearly five acres in the city’s core for redevelopment—a move experts say could bring a wealth of opportunities to downtown’s southeastern quadrant.

The airport’s board on June 18 agreed to work with city officials to find a new use for the 4.9-acre property at 51 S. New Jersey St. Among the options on the table are selling the land to a developer or transferring it to the city to allow for a comprehensive redevelopment strategy.

Airport officials say whoever buys the property will be required to pay fair market value.

The process is expected to take several months, if not years, with the city and airport pursuing a strategy that the airport says will promote physical revitalization of and financial reinvestment in the property.

Local real estate experts predict strong interest in the property, particularly for developers that can incorporate neighboring parcels or sites like the Marion County Jail, which sits a few blocks west, into their plans. The jail will no longer be used once inmates are transferred to the new Criminal Justice Campus southeast of downtown.

“Really, the sky’s the limit,” said Marci Reddick, a land use and real estate attorney with Taft Stettinius & Hollister LLP. “It’s a wonderful opportunity for a variety of uses. It might be locked in [by other parcels], but I would think local developers would relish an opportunity to partner with the city and really do something unique and creative there.”

Reddick said she is not surprised the airport and the city partnered to find a new use for the project; they’ve done the same in the past, including for the former airport terminal that is now being redeveloped as the Infosys campus.

In fact, over the past 10 years of administering its land-use program, the airport has sold more than 3,000 acres, generating about $48 million for the authority.

Isaac Bamgbose, president of New City Development LLC, said the city has an opportunity to “connect the gap” on the eastern edge of downtown between Bankers Life Fieldhouse and CityWay, and the Market 360 tower. He said a mix of office, retail and housing could be completed in phases and bring a new vibrance to the area.

In a statement, Bill Stinson, the senior director of public affairs for the airport authority, told IBJ the combined efforts of the airport and the city—through an agreement that will last up to four years—are the proper steps in building up an area of downtown that has seen increased development in recent years.

“The redevelopment will promote physical revitalization of the site and financial reinvestment into the downtown area surrounding the heliport—and that aligns with IAA’s commitment to restoring land no longer required for aviation use to the community for economic growth and job creation,” he said.

And Portia Bailey-Bernard, vice president of Indianapolis economic development for the Indy Chamber, said she is eager to see what comes of the city’s and airport’s conversations. The chamber will likely be involved in discussions related to the property, as the city’s ancillary incentives and development arm.

“ “We look forward to identifying and evaluating redevelopment opportunities at the heliport site that align with other nearby projects underway,” she said in an email.

Larry Gigerich, executive managing director of Indianapolis-based site selection firm Ginovus, said a mixed-use project with a multifamily component is the most logical choice for a developer.

He said such a project could bolster the gateway between the near-east side and downtown, which in recent years has seen new multifamily developments like the Artistry and Grid along East Washington Street.

“I think it’s fair to say as you look at downtown Indianapolis and how it’s developed, the east side is the one area where, for some of the parcels, the current uses aren’t the highest and best uses,” he said.

The heliport has been operated by IAA for four decades. But in recent years, the entity has considered closing the property due to waning traffic there. Its only remaining customer is Indiana University Health.

The airport is awaiting direction from the Federal Aviation Administration about how and when the site can be decommissioned.

In 2017, Indianapolis office broker Bill Ehret, now with Avison Young, was considering an effort to acquire the heliport with a handful of business partners. Ehret’s $40 million vision included apartments, retail space, a 107-room limited-service hotel and a large parking garage.

Separately, the group involved in the Amazon HQ2 project around the same time pitched the site as part of its bid, proposing office space and residential uses for the property.

The project fizzled after the group faced challenges in securing agreements to buy the surrounding real estate, which would have been part of the development.

While Ehret said he doesn’t plan to revisit his original plan, he still believes one like it from another developer is viable for the property. And he said future developers of the property are likely to look for city incentives, whether through tax-increment-financing bonds or a tax abatement.

“It all comes down to what the city can provide with financing assistance, and those developments that might meet a need like workforce housing are going to be looked at more favorably than office space or the like,” he said. “That’s just the way it is with those kinds of things.”

He said while the jail site might make for a more comprehensive project, it’s not necessary to make a development work.

The heliport property extends west to east from New Jersey Street to just past East Street and sits between Pearl Street to the north and an active set of railroad tracks to the south. It’s surrounded by a 5.3-acre parking lot, a few smaller surface lots and a Best Western Plus hotel.

The 3.5-acre Liberty Hall campus at 675 E. Washington St., across East Street and the railroad tracks from the heliport, is also on the market. And there’s been recent talk of interest in redeveloping the surface lot and Adult & Child Center building between the heliport and Liberty Hall, sources said.

Ginovus’ Gigerich said incorporating those adjacent properties, and even the jail, would make for a “compelling opportunity” for developers.

“It would make a lot of sense to have this incorporated into the plan for what happens with the heliport because, one, it’s great real estate, and two, with the proximity and the connection there along East Washington Street, you could do something really cool,” he said.

Bamgbose said while a developer would ideally secure parcels like the expansive parking lot at Maryland and Alabama streets, not doing so wouldn’t necessarily hinder long-term prospects for that part of the city, in large part because it could take years to fill out that property with new development.

“This is an opportunity to think about all these things in a post-COVID world,” Bamgbose said. “If you can acquire that [parking lot], then there’s no limit, but does it derail the progress of a development at the heliport if you can’t? I would say, ‘No.’”

If a developer were to manage to acquire the surrounding properties, he said, it would be a logical spot for an entertainment district, e-sports complex or even something like Indy Eleven’s Eleven Park stadium project. Such facilities could tap into nearby resources, like the Virginia Avenue parking garage and Bankers Life Fieldhouse, while also creating a new environment for visitors to enjoy.

An entertainment area would “create energy and excitement” that could support other development, like housing, hospitality and office uses, he said.

“Those things can be supported, but I think you need to have a little bit of a catalyst there to create that demand,” he said.

Bamgbose added that, if a large-scale office user were to desire a new campus—despite an abundance of vacant space already downtown—the property might be a good fit for such a venture, as well.

“Is there a big corporate office user that could be repositioned, so they are closer to the [downtown] core? It could create a little bit more density and dynamism right there,” he said.•