Canal Walk apartment complex expanding, targeting restaurants
The Canal Walk is "kind of reaching its rebirth," one Downtown advocate says.
Soon, the canal in Downtown Indianapolis won't just be for gondola rides and long walks. It also will be a place where you can grab a meal.
The developer behind the 9 on Canal apartment building is planning a $37.25 million second phase with 194 apartments. Combined with the first phase, the development will include about 500 apartments between West Ninth and West St. Clair streets.
Although housing is plentiful along the canal, the second phase of 9 on Canal will add something that isn't: restaurants. Louisville, Ky.-based Investment Property Advisors LLC wants to build 15,144 square feet of retail, enough space for several new eateries.
"Hopefully it will be established as somewhat of a restaurant district along the canal," said Chase Sorrick, a principal for Investment Property Advisors.
Sorrick wants to start construction in February and expects to complete the project by July 2017. The second phase will connect to the existing building.
The first phase of 9 on Canal already offers the only places where people can buy food year-round on the Canal Walk. It includes Burgerhaus and Quills Coffee. Fresco Italian Cafe, a few blocks south, is a seasonal restaurant.
Investment Property Advisors is seeking a 10-year tax abatement that would save it $2.36 million, or about 40 percent, in property taxes over 10 years. The proposed tax break is part of the strategy to lure prime restaurants, Sorrick said.
"The tax abatement is really an incentive to lower costs for operators of that retail space," he said. "Typically, retailers and restaurants are driven by traffic counts, and with that being down on the canal — there's zero traffic counts (during the winter) — that's been one of the struggles and deterrents for operators to locate down on the canal. They just couldn't afford the cost of business.
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"The purpose of the tax abatement was to give me the ability to offer that space at a below-market rate to attract operators."
The city estimates the developer will pay $3.6 million in taxes during the 10-year tax abatement. The property, at 350 W. St. Clair St., is generating only $6,437.88 a year in tax revenue for the city as is. The site includes a 30,000-square-foot warehouse that will have to be demolished to make way for the new development.
The Metropolitan Development Commission will hold a hearing on the developer's request during its meeting Wednesday. The panel is scheduled to decide on the tax break Dec. 16.
Downtown Indy, a nonprofit that advocates for Downtown, supports the project and its effort to expand retail on the canal, said Catherine Esselman, the group's real estate development director. It's been a struggle, she said, to make the canal more engaging for people who go there for recreation.
"Right now, people use it for biking and walking and strolling and renting paddle boats and gondolas, which are fabulous uses, but there's so much potential there that could be realized," she said.
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The Canal Walk was completed in 2001. Most buildings along the canal weren't designed to interact with visitors, Esselman said, so it's important to make new buildings welcoming.
"The first priority was to get it built and get these stakeholders to buy into maintaining it and see the value of it," Esselman said. "It's kind of reaching its rebirth."
The first phase of 9 on Canal contributed to that rebirth by including restaurants and public restrooms, she said.
Besides retail, Investment Property Advisors is expanding a successful apartment complex. The existing apartments are about 95 percent occupied. Rent starts at about $1,300 for studio apartments, and the new units will be similarly priced, Sorrick said.
Plans for a second phase have been in the works for more than a year and a half, but Investment Property Advisors kept revising it to add more restaurants. The original plan included only 2,000 to 3,000 square feet for a restaurant, the typical size of a Starbucks.
"When the city built the canal, I think they envisioned more of those types of uses down there, and over the years it just hasn't happened," Sorrick said. "I think that's a reason why we're motivated to provide those types of spaces — to help increase some vibrancy down there."
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Call Star reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.