Community concerns stall $500 million proposal at Indianapolis airport

The Indianapolis Airport Authority board of directors put the brakes on a proposed $500 million private development for the site of the former terminal after being inundated with concerns that the project was moving too fast with not enough scrutiny.

Board president Kelly Flynn said he delayed a vote Friday on Athletes Business Network's proposal to build a sports medical complex, hotels and a 20,000-seat sports stadium when, "I started getting calls from county officials and the community" who wanted to know more about it.

In addition, he said, a new board member appointed by new Indianapolis Mayor Joe Hogsett, Barbara Glass, requested more time to study the proposal.

"She wanted to familiarize herself with all the issues," he said. "It's that simple."

Community leaders and elected officials have expressed skepticism about whether ABN has financial backing and expertise to handle a project of that size. Announced Tuesday, the $500 million development would have five medical office buildings that specialize in sports performance, substance abuse sports medicine and orthopedics and sports medical technology. The centerpiece, called the ABN Global Center for Brain Health, would focus on brain trauma.

Plans also call for two 250-room hotels and a 20,000-seat stadium. The overall project is planned in two phases, and construction on the first phase would begin next year. The development ultimately would provide jobs for 3,000 workers, ABN said.

ABN was formed in 2009, but the Indianapolis project would be its first large real estate venture. In addition, co-founder Craig Sanders of Zionsville has a business track record that includes the bankruptcy of a chain of Dunkin' Donuts franchises and a 2013 personal bankruptcy filing.

Jared Evans, the newly elected City-County Council member representing the Westside, said the announcement that the project had been selected to develop 130 acres of unused airport land came as a surprise to him and community residents.

"Let's slow down and vet this," Evans said. "How realistic is it? We don't want this developer to start then stop halfway through and say, 'We are out of money,' and leave these unfinished buildings there."

Evans said the plan to build two 250-room hotels in the complex was troublesome, because several hotels already are near the airport. James Dora Jr., an executive with Indianapolis hotel management company General Hotels Corp., echoed that sentiment.

Evans said he also was concerned because ABN did not reach out to lawmakers, civic organizations or businesses before its plan was unveiled. He said another bidder for the property, Full House Resorts, which wanted to build a casino, did consult with him and others.

A representative of  Hogsett's office said the announcement Tuesday was the first Hogsett had heard of the plan.

ABN was founded by Sanders; Yair Oren, a technology executive; and Arne Pedersen, a health care consultant. It has signed up Ziegler Capital of Chicago as its financing partner and the law firm of Ice Miller of Indianapolis as its legal representative. Pedersen had signed a letter of intent that was to be voted on by the airport board. Approval would have sent the project on its way to another vote for final approval in two months.

Company officials issued a statement saying they were "gravely disappointed at the board’s decision to delay" the vote and that their business plan is solid.

"(We) welcome the opportunity to have further discussions with the Airport Authority regarding ABN's qualifications and ability to deliver a successful project," the statement read.

Flynn said he was unaware of Sanders' financial background but that the board usually reviews the financial details after giving approval of the non-binding letter of intent. "That's the beginning of the vetting process for us," he said.

It is the job of the airport's executive director and an executive committee to review the proposal before making a recommendation to the board. Whether the committee was aware of Sanders' background was unclear Friday. Director Mario Rodriguez refused IndyStar's request for an interview

The board comprises nine members, five appointed by the mayor, one by the City-County Council president and the rest by officials from the surrounding counties. It approves land transactions, among other duties, at the Indianapolis International Airport and five others airfields. The ABN proposal will be placed on the March 18 agenda, Flynn said.

Glass, the Hogsett appointee, could not be reached for comment. Council President Maggie Lewis did not return calls seeking comment.

Some observers said they are suspicious of large projects because of a couple of failed developments in recent Indianapolis history.

In 2012, the city and state offered $10 million in incentives to a company that said it would hire 1,100 workers at a factory that would make giant screen TVs on the northwest side.

But the only investor in the company was owner Bob Yamagihara, and he had racked up hundreds of thousands of dollars in unpaid liens and court judgments in California.

In 2015, the Indianapolis City-County Council pulled the plug on a $1.75 billion criminal justice center on the west side. The project was scrapped when doubts about the financing and costs persisted well after a developer was selected. By the time the project died, the city had spent millions of dollars in non-refundable consulting fees and payments to the bidders.

$500M sports medicine complex chosen for airport site

Call IndyStar reporter John Tuohy at (317) 444-6418. Follow him on Twitter: @john_tuohy.