State agency denies permit to build warehouse complex on south-side wetlands

Indianapolis residents and environmental advocates led by the Hoosier Environmental Council secured a victory Tuesday when the state’s top environmental agency denied a developer’s permit to build on a small section of wetlands on the city’s south side.

Plans for a proposed warehouse complex from Indianapolis-based developers Gershman Partners and Citimark affect 28 total acres of wetlands, but the Indiana Department of Environmental Management denied a request to build on just a quarter-acre of the property. The section is considered Class III wetlands, a designation that is typically reserved for the most ecologically valuable and rare wetlands.

IDEM’s decision comes after a group of 2,300 residents signed a petition written by the Hoosier Environmental Council in January seeking a public hearing and a denial of the permit.

How big of an impact the decision has on the overall project remains to be seen. The developers have not said whether they plan to modify their plans to avoid the quarter-acre. They also could still challenge the ruling in a petition with IDEM’s Office of Environmental Adjudication.

Gershman and Citimark sought to develop a five-building, 1.9-million-square-foot warehouse complex on a 170-acre property at the intersection of County Line Road and Arlington Avenue, east of Interstate 65. The developers planned to begin construction in March, with work continuing in phases until expected completion in 2030.

The property is in an area that, in addition to neighborhoods and apartment complexes, features a three-mile stretch of distribution and manufacturing facilities for companies such as Amazon and FedEx.

City officials approved tax breaks for the project that would save the developers more than $7 million over five years and they approved nearly $20 million in developer-backed tax-increment financing. The TIF funds would be used specifically to widen South Arlington Avenue and County Line Road and to construct a roundabout at the intersection.

Amari Farren, IDEM’s branch chief of surface water and operations, wrote that Gershman’s permit application “failed to sufficiently demonstrate that the proposed wetland activity is without a reasonable alternative and is reasonably necessary or appropriate” because the warehouse space doesn’t have a buyer, there are vacant warehouse spaces nearby and because the application contains plans with varying impact to the wetlands.

Sam Carpenter, executive director of the Hoosier Environmental Council, said in written comments that he was pleased about the denial.

“At a time when central Indiana is projected to have future water shortages; at a time when Marion County is spending hundreds of millions of dollars to upgrade its storm sewer system; it does not make sense to trade these precious wetlands for more speculative warehouses, when Indiana already has a higher warehouse vacancy rate than most other states,” Carpenter said.

Ryan Gershman, principal at Gershman Partners, did not respond to IBJ’s request for comment on how the denial impacts the overall development plan.

In documents submitted to IDEM, developers wrote “the purpose of the project would not be successfully completed without impacts to the Class III wetlands. Other properties were considered, but this property offers the proximity to the interstate that is desirable, and is also available for development. The area has been zoned for development, is considered a priority development area by the city of Indianapolis, and a TIF (tax increment financing) district has been proposed in this area to encourage development of the site.”