Whole Foods to open Downtown Indianapolis store

Whole Foods Market has a surprise in store for Downtown Indianapolis residents.

The Austin, Texas-based health-foods chain said today it plans to open a new grocery store at the future Market Square Tower to be built at the corner of Alabama and East Market streets.

The 40,000-square foot store, to open in 2017, will feature fresh, organic fruits and vegetables; specialty items; a bakery; a cheese department; coffee bar; gelato station; and high-quality meats, seafood and poultry.

Whole Foods, which had sales of $12.9 billion across 360 stores in 2013, announced the project today at a quarterly call with stock analysts. The cost of the store was not disclosed.

The Market Square Tower will reshape a corner of Downtown that's been underutilized since the former Market Square Arena was imploded in 2001.

Construction should begin this summer on Indianapolis-based developer Flaherty & Collins 28-story, $81 million residential tower planned at the site, following the City-County Council's approval of a $23 million borrowing plan in March. Cummins Inc., the Columbus, Ind.-based engine maker, also plans to build a divisional headquarters on the site.

Whole Foods will be the second new grocery store to locate Downtown in recent years. Marsh will open a new 40,000-square-foot grocery store May 15 as part of the Axis retail-residential development at the corner of Michigan Street and Senate Avenue.

Whole Foods Midwest Regional President Michael Bashaw said in a news release today that the company's focus on healthy and organic options will appeal to Downtown residents.

"With this new centrally located store in Indiana's capital, Whole Foods Market will increase access to healthy and organic options to downtown residents and workers," he said in a prepared statement.

Empty-nesters and millennials are driving demand toward urban living. According to Indianapolis Downtown Inc., 21 residential projects with 3,541 units are underway or in planning.

Whole Foods' strategy will likely pay off unless there's a economic downturn, said Britt Beemer, president of Summerville, S.C.-based America's Research Group.

"It looks like the economy is holding up pretty well in Indiana," he said. "So the risk is probably minimal."

In a story in March, The Star detailed the growing demand for health-food stores in the metro area.

Whole Foods currently has locations at 1300 East 86th Street in Indianapolis and 14598 Clay Terrace Boulevard in Carmel. The company also is eying a location in Broad Ripple in a five-story apartment development, city officials have said.

Health-foods competitors also are expanding in the Indianapolis market.

Fresh Market recently opened a new grocery in Fishers. Earth Fare recently opened in Carmel and Noblesville and plans an Indianapolis store. Fresh Thyme Farmers Market is entering the region, with plans so far for three groceries. Brokers say Lucky's Market also is actively looking for locations for area groceries.

Call Star reporter Chris Sikich at (317) 444-6036. Follow him @ChrisSikich.