City-County Council approves $23M bond for Market Square site

Construction should begin this summer on a 28-story Downtown residential tower following the Indianapolis City-County Council’s approval of a $23 million borrowing plan Monday night.

The council voted 18-9 in favor of the project after about 40 minutes discussion. The bond issue will help pay for the $81 million tower at the site of the old Market Square Arena downtown.

“After sitting vacant for a decade, the former Market Square Arena site will soon transform our skyline with a gleaming new retail and residential tower,” Mayor Greg Ballard said in a written statement after the vote. “Exciting projects such as this make Indy a more attractive to place to live.”

Ballard’s economic development director, Deron Kintner said developer Flaherty and Collins would begin preparing for construction immediately.

“They would move as fast as possible, which means breaking ground in a couple months,” Kintner said. “They would want to get it started this construction season.”

Councilors who favor the project said it would spur economic growth downtown but those against it compared it to a corporate hand-out.

“There are many other needs in this city,” said Councilor Brian Mahern. “Infrastructure, employment. In my district and other neighborhoods there are food deserts, with no grocery stores for miles.”

Councilor Angela Mansfield said she found the borrowing plan “excessive.”

“We are taking millions of taxpayers dollars and handing it over to a developer,” she said. “If there is such a need for this (project) the market should be driving it.”

The tower and adjoining garage would take about 24 months to complete, which means it could be finished by summer 2016. Kinter said “pre-leasing” to renters would probably begin a year before completion.

The tower would have 300 living units, all rentals, a 550-space garage, a grocery and other retail outlets.

The project is planned for the northern part of the Market Square site at Alabama and Market streets, which is now a parking lot.

The bonds would cover a $17.8 million subsidy to the developer and would be paid back over 15 years. The city also is giving the land, appraised at $5.6 million, to the developer.

Ballard has said the units should attract young, high-wage earning professionals, who will provide a boost to Downtown businesses.

Call reporter John Tuohy at 444-6418 and follow on Twitter @john_tuohy.