Proposal picked for City Market area redevelopment bested two others

Flaherty & Collins proposed a $33 million, 13-story apartment tower with first-floor retail space—including a new taproom for Sun King. (Image courtesy of the city of Indianapolis)

The proposed $175 million project that could add more than 400 apartments to the area surrounding the Indianapolis City Market was chosen over two other bids from local development firms—both of which differed greatly from the winning proposal from Indianapolis-based developers Gershman Partners and Citimark.

The plan chosen by the city calls for reskinning the adjacent 20-story Gold Building and converting the office structure into about 350 apartments, in addition to replacing the City Market’s existing east wing with a new 11-story tower with 60 apartment units.

The project—key components for which could get underway in early 2023—was chosen by city officials following a months-long request for proposals process that also included bids by TWG Development and Flaherty & Collins. 

Each proposal included a multifamily development for the east wing site, with all of them considering a ground lease from the city, because the city by law is not permitted to sell the land.

Here’s a look at what the other projects would have included:

TWG Development’s proposal

The focal point of the proposal from TWG was a $114 million, 32-story, angular glass high-rise containing 273 apartments, a 315-space parking garage and nearly 9,000 square feet of commercial space, according to a copy of the firm’s proposal obtained by IBJ.

The project, which been taller than the neighboring 28-story City-County Building and the nearby 28-story 360 Market Square tower, would have occupied a majority of the footprint now used by the eastern plaza and wing of City Market.

The plans called for most of the units to have rents set at market rate, with about 18% set aside for various lower-income levels, including 4% each for individuals making 30%, 40% and 50% of the area’s median income, and 3% each for those making 60% or 80% of the median income.

The project would have featured first-floor retail, a restaurant, a single “family-oriented retail” user and an interior mezzanine featuring additional commercial uses. It also would have had a 1,000-square-foot space for Indy Bike Hub, which is based in the east wing of the market.

 Amenities for the apartments would include a pet spa, dog park, fitness center and business lounge, along with a clubhouse, event room, rooftop pool and hot tub, grilling station and lounge area.

TWG planned to ask the city for about $12 million in tax-increment financing bonds for the project—a tool often deployed by the city’s Department of Metropolitan Development to incentivize apartment projects (specifically those with an affordability component) in the city’s central business district.

It also planned to ask the Indiana Economic Development Corp., the state’s economic development arm, for about $7 million in conditional tax credits.

TWG co-founder and CEO Tony Knoble declined to comment on the proposal.

Flaherty & Collins’ plan

The project put forth by Flaherty & Collins was more modest in size than the others, with the firm proposing a $33 million, 13-story apartment tower with first-floor retail space—including a new taproom for Sun King—and a connector to the Market 360 Tower directly east of the development site, across Alabama Street.

The project would have featured about 99 high-end apartments, rather than a mix of market-rate and affordable housing in the TWG and Citimark/Gershman Partners proposals. However, the plan does allow for up to 10 units at 50% of the area’s median income, with a caveat that it would ask for more city funding assistance.

Unlike the other two proposals, Flaherty & Collins did not include three-bedroom apartment units in its bid—something the city requested all respondents to consider The developer indicated that it didn’t expect there to be demand for those units in the near future.

The building’s design called for a glass exterior atop a masonry base. Its footprint would have occupied about half the project site, with a large front lawn similar in style to the green space on the south side of the Cummins distribution headquarters campus just one block away.

The plan, like TWG’s, called for a rooftop pool and lounge area, as well as a spot for Indy Bike Hub.

Flaherty & Collins asked the city for about $13 million in funding through tax-increment financing, or about $15.3 million if the city would have requested affordable apartment units. However, Indianapolis generally doesn’t provide funding for apartment projects that don’t include an affordability component.

In addition to its proposal for City Market’s east wing, the firm also put forth a concept for the west wing—another 11-story apartment tower in place of the existing structure, with most of the existing plaza preserved. The west wing sits above the city’s historic catacombs. Together, the towers would have added about 161 units.

As part of its proposal, the firm also asked the city to turn over operations of the City Market to Sun King—something that would have been a drastic shift for the market, which is run independently but receives an operational subsidy from the Department of Metropolitan Development.

The project also proposed new developments directly north of Old City Hall—a 400-space modernly designed parking structure along Alabama Street with either 100,000 square feet of office space or a 30-story tower with 200 hotel rooms and 200 luxury apartments—as well as reuse of the City-County Building as market-rate apartments and office space, with a new skin. For the municipal building, the wings would continue to act as office space, as well.

Flaherty & Collins said developments could additionally include the creation of a new men’s homeless shelter near the Community Justice Campus—replacing the shelter at 520 E. Market St.—as well as the development of the southeast corner of Alabama and Ohio Streets as a 25-story apartment tower with about 250 units and first-floor commercial space, and an expansion of the Cummins distribution headquarters. It also proposed putting Indy Eleven’s soccer stadium on the heliport site.

Jim Crossin, vice president of development and a principal at Flaherty & Collins, said the fact the firm didn’t win the bid doesn’t preclude it from pushing for the other projects suggested in its proposal, which was done independently and didn’t take into account any feedback from the Indy Eleven (for which the proposed stadium would be built) or Cummins.

“We used this opportunity to say, ‘Here are some good ideas,’ and to really just think big,” he said. “It’s not contingent whatsoever on what the city decided for this project.”

He noted the firm does not have specific plans for any of the proposed projects at this time, although it has particular interest in developing the southeast corner of Alabama and Ohio Streets in the years ahead.

The city is pursuing redevelopment of several parcels it owns across downtown—most of them in the Market East Cultural District.

The others  include Jail I, Jail II and the City-County Building, while other sites like the Indianapolis Downtown Heliport and Circle Centre Mall, are also expected to undergo their own redevelopments in the years ahead.

Crossin said while his firm is disappointed it didn’t win the bid, it is eager to see what Gershman and Citimark do with City Market.

“We are confident that Gershman and Citimark will do a fantastic job with this project,” he said. “The city market needs to be repositioned, and these firms are great developers. Especially since we own 360 Market Tower, essentially across the street, we see that redevelopment and reinvestment in the area as being very positive.”