Revamped downtown CSX redevelopment plan features upscale hotel, music venue

A plan to demolish the century-old CSX railroad servicing building across the street from Gainbridge Fieldhouse in downtown Indianapolis is back on track—with an updated redevelopment strategy and a heftier price tag.

Boxcar Development LLC, an investment group led by Indiana Pacers owner Herb Simon and his family, said Thursday it plans to spend at least $300 million to construct a 13-story luxury hotel and a connected 4,000-seat theater on the property, with plans to open both venues by late 2027.

The project at 230 S. Pennsylvania St, would replace the five-story CSX building with entirely new construction. The unnamed development is expected to consist of a 170-room Shinola hotel and the midsize concert venue, operated by management company Live Nation Entertainment Inc. It would also feature a two-level, subgrade parking garage, restaurants, retail and an elevated walkway connecting the hotel to the fieldhouse.

Phil Bayt, an Ice Miller LLP attorney who represents Boxcar, said the 1.8-acre project is important to the Simon family because it allows for continued investment in Indianapolis.

“It was an exciting moment,” he said, when the family “heard there was an opportunity to bring an entertainment use to that part of downtown.”

The project, which was first proposed in a different configuration in early 2022, is a partnership between Boxcar, Texas-based Bedrock Manufacturing, which owns the Shinola watch and hotel brands, and Denver-based Sage Hospitality Group. Boxcar has already signed letters of intent with Bedrock and Sage for the hotel, but has not finalized an agreement with Live Nation.

The Shinola hotel would be the upscale hotelier’s second location, joining Detroit, and is expected to feature a mix of deluxe rooms and suites, as well as an upscale restaurant, a bar and, potentially, a Shinola retail store that would specialize in high-fashion merchandise such as watches and handbags. Retail space along Pennsylvania Street would likely be entertainment-focused, according to a Boxcar Development representative.

The hotel would also have an indoor-outdoor terrace, as well as meeting and event space, including two ballrooms and a board room. The entire building would be about 226,000 square feet and have a covered skywalk connecting the building across Pennsylvania Street to the club level of Gainbridge Fieldhouse. The parking garage planned for the project would have 253 spaces across two floors.

“As we’re looking at cities where we feel like the Shinola brand can be successful, both from a retail standpoint and from a hotel standpoint, Indianapolis … we think would be a great addition, given the momentum that’s going on in downtown,” said Awenate Cobbina, CEO of Bedrock.

Along with the hotel, the project calls for an 87,000-square-foot live performance hall operated by Live Nation, which also manages the Murat Theater and Everwise Amphitheater downtown and Ruoff Music Center in Noblesville, among others. Pacers Sports & Entertainment, which operates Gainbridge Fieldhouse and Bicentennial Unity Plaza on behalf of the Capital Improvement Board, would not have any involvement in the project.

While design plans for the indoor music venue are still in the early stages, the configuration would likely include a main floor without affixed seats and three additional seating tiers with more traditional seating arrangements.

IBJ first reported on Boxcar’s idea to redevelop the CSX property in April 2022, but plans at that time called for a 16-story hotel with as many as 225 rooms and a separate 26-story apartment tower, along with a 700-space parking garage and retail space.

At that time, the project was predicted to cost about $250 million and include 254 apartments, along with 18,000 square feet of retail space. The modified plans, Bayt said, stem from more discussions with city and state leaders about what would best fit the site to help grow downtown Indianapolis.

The entertainment venue, Bayt said, is not expected to interfere or compete with other downtown entertainment facilities, as it fills a niche he said Live Nation identified as a missing rung on Indianapolis’ entertainment ladder. It replaces the apartments element of the original concept.

During the design of the CSX redevelopment, Boxcar officials “learned that Live Nation was exploring opportunities for a 4,000-person capacity venue in Indianapolis, and they wanted to be in or near downtown,” he said. “Since we did not have anything finalized with respect to the apartments, we immediately touched base with the folks at Live Nation with whom PS&E has been doing business for 40 years, so it was an easy and … very exciting conversation, and there was a lot of enthusiasm in the room.”

He said there could be opportunities for downtown visitors to spend time at each of the Simon-backed venues in a single day, such as getting dinner at Commission Row by Bicentennial Unity Plaza, before going to a Pacers or Indiana Fever game at the fieldhouse, followed by a concert at the new venue.

Live Nation, which employs about 1,800 people in central Indiana, owns, operates or is contracted with more than 370 music venues around the world, including dozens of a similar size in cities such as Los Angeles, Austin, Atlanta and San Francisco.

“There were some synergies, where it just became a natural idea that flowed from the long-term relationship we’ve had with them,” Bayt said.

He said the plans for the Shinola project stemmed from a private request-for-proposals process to identify a hotel flag and operator. Shinola, which opened its 129-room hotel in Detroit in 2018, is an offshoot of the watch and design brand of the same name.

Story continues below image.

Bayt added the Simon family had previously invested in the Shinola fashion brand and knows the company’s owner, Tom Kartsotis.

The Detroit hotel project was a collaboration between Shinola owner Bedrock Manufacturing and Detroit development company Bedrock, which is operated by real estate mogul Dan Gilbert.

So far, Gilbert and his Bedrock company are not involved in the Indianapolis project, although officials acknowledged there are existing relationships between Gilbert and the Simon family. So far, no additional investors have been approached to join Boxcar in the project.

According to the city of Indianapolis, the all-in cost of the CSX redevelopment is $312 million, including the $12 million Boxcar paid for the property in late 2022.

The CSX building, built in 1923, is also known as the Indiana Terminal warehouse building. The five-story, 231,400-square-foot building has been used as offices, shops and storage since its construction and was connected directly to the rail line that crosses over Pennsylvania Street. Designed by notable Indianapolis architectural firm Rubush and Hunter, it has a reinforced concrete frame and brick exterior walls.

Keeping the building intact as part of a project has proved impractical, Bayt said. At least six redevelopment studies have been conducted on the property over the past 24 years—most of them since 2015.

A 2019 study called for the building to be repurposed into self-storage, office uses and a hotel, including the addition of seven stories to part of the existing structure. Others proposals have considered co-working space, an extended-stay hotel development and a development similar to the current proposal that included apartments and a 14-story hotel.

To move forward with the project, the Indianapolis Historic Preservation Commission must give its support for demolition of the existing building, because most of it sits within the historic Wholesale District. It also must approve the portion of the proposed new building that is within the district’s boundaries, which includes the entirety of the hotel and a portion of the entertainment venue and parking garage.

The new structures would be constructed from red-brown colored brick, terra cotta, granite and metal trim, with windows stretching nearly the entire height of the building before cresting with radius corners near its roofline. The design is meant to enmesh the project with the design style found across the Wholesale District, including at Gainbridge Fieldhouse, Bayt said.

Boxcar Development LLC expects to ask the IHPC for consideration on the project during the commission’s Aug. 7 meeting to elicit feedback. It would return in September for a full vote on its proposal. If approved, demolition of the CSX building would begin in October, with completion in the fourth quarter of 2027.

Design of the hotel portion of the project is being led by Indianapolis-based Ratio Design, while national firm Populous Architects is leading the design of the entertainment venue.

Bayt confirmed the project is being considered by the Indiana Economic Development Corp. for funding through the state’s Regional Economic Acceleration and Development Initiative, or READI. Specifically, it is being considered for funds through Lilly Endowment Inc., which has allocated $250 million for arts and culture initiatives.

The CSX redevelopment is one of three Indianapolis projects—alongside Circle Centre Mall and the redevelopment of Old City Hall—put forth by the Central Indiana Regional Development Authority for the state’s consideration, with each expected to compete for funds outside the $45 million awarded to the region as part of READI 2.0 program.

“We were very pleased that the city and [CIRDA] as a whole respected the importance of the project and put it on the priority list,” Bayt said. “We haven’t heard from the state whether an award is going to be made to us, but we are hopeful it is. We are in the midst of discussions with state and local officials about all the tools in the incentive toolbox that we can either apply for or be eligible for.”

Bayt said the project could also be considered for city tax-increment financing dollars or a tax abatement, as well as a state redevelopment tax credit. It will not be eligible for federal historic tax credits because the project involves the demolition of the entirety of the CSX building.

“We haven’t gotten an official word on any of those, but we continue to be hopeful that we’ll have the kind of support that will be important for this project to be successful,” he said.