Moving to the Centre: Star will be 'integrated and engaged' with the community

News organizations are not exactly known as mall tenants, like Orange Julius or Forever 21. The nation's largest mall developer, Simon Property Group, for example, has never had a media tenant like The Star among its more than 100 enclosed shopping malls.

Until now.

Come Sept. 29, The Indianapolis Star and its parent, Gannett Co., will move nearly 800 employees into the former Nordstrom store in the Simon-managed Circle Centre mall.

Where Nordstrom once purveyed Burberry coats, Ugg boots and Armani suits, a sleek newsroom and offices for The Star are taking shape. The newsroom will include a mission control-style digital hub and a glass-walled boardroom with a write-on table. And it will have escalators.

Spending $10 million to create a newsroom with escalators, located with retailers like Victoria's Secret and Cinnabon, might sound unlikely.

But executives from The Star and Simon describe the move as a no-brainer. It comes at a time when both newspapers and malls are looking to remake themselves in the face of revenue-sapping competition from the Internet.

On her first tour of the Nordstrom space, Star President and Publisher Karen Ferguson Crotchfelt said she saw the skylight, the basketball court-sized former sales floor and, yes, the escalators, and thought: This is it. This is the right fit for the new home of The Star.

"I get a little giddy when I see the space," she said. "They hit on the things that mattered to us."

The 100,000 square feet of mall space lets The Star create its vision of the modern newspaper office: a place digitally focused, video-rich, audience-attuned and nimble in structure and cost, Crotchfelt said.

The Star also will use part of the first floor, creating an entrance off South Meridian Street with a private cafe and two meeting rooms. They will be open for use by community groups for free or a small fee.

(A large chunk of space on the third floor also will be used by Gannett operations that serve numerous sites in the chain.)

The overall design should better market The Star's brand, Crotchfelt said, by making its offices more visible, attractive and accessible to the public.

"It's important the community see us as integrated and engaged, and you can't get more integrated and engaged than in the heart of Downtown," Crotchfelt said.

One idea for engaging the public: hosting events on nearby Georgia Street, which was rebuilt with a center pedestrian walkway for the 2012 Super Bowl. The first event will be a party on Georgia Street Oct. 29, which The Star will co-host with the Indiana Pacers and Downtown Indy prior to the Pacers' season-opening game at Bankers Life Fieldhouse.

A perfect match

Indianapolis-based Simon has similar motivations in the lease deal. It realized after Nordstrom's departure that its flagship mall in its hometown needed to evolve.

Simon searched in vain for close to three years for a space-hungry retailer to replace Nordstrom. Citing lagging sales, the Seattle-based upscale retailer pulled out of the Downtown mall in 2011, leaving three empty floors on the south end.

Other big retailers in the market, including Macy's and Target, had little interest in the huge Downtown space, said the president of Simon's mall business, David Contis. Subdividing the space and leasing it to multiple retailers wasn't an attractive option for Simon, either.

Then The Star came along.

Contis said the Nordstrom space has what no other Downtown building could offer The Star: large available floorplates of up to 50,000 square feet, direct street entry and lots of nearby garage parking.

"We can provide a space no Downtown office building can," Contis said. "We just thought it was a great use."

Contis said mall tenants should benefit by having all those Star and Gannett employees under the same roof. "To get 800 people who are going to be there virtually 24/7, think about that. It activates Circle Centre," he said.

In its mall move, The Star is doing what many big-city dailies across the country have done: ditch their dowdy downtown buildings and rent hip space more befitting a tech firm, which news operations more and more resemble.

"There's a whole lot of that going on," said Rick Edmonds, media business analyst at the Florida-based Poynter Institute, which studies the media. "This is a new day here" for newspapers, he said, as they shed their long-prominent downtown buildings for "storefront venues" that are a better fit for their scaled-down, more digitally focused operations.

The real estate moves by newspapers come as declines in advertising revenue and vast changes in the way people get news have forced newspapers to reduce their reliance on print and embrace online media.

Among other similar newspaper moves: The Philadelphia Inquirer relocated its newsroom into a former downtown department store in 2012, while the Minneapolis Star Tribune will rebuild its newsroom in a multitenant downtown office building next year.

Time for a change

The Star concluded a few years ago that its home for the past 107 years had outlived its usefulness. The Star has reduced its workforce significantly in the past 15 years, and its six-story, red-brick edifice at 307 N. Pennsylvania St. no longer fit the paper's needs.

The nearly block-long Star building was not only too big but had become a space planner's nightmare, with its mismatched floors and an empty, cavernous, ink-stained basement where printing presses once thundered. (Press operations moved to the Northwestside in 2002.)

"I've only been to the basement three times in three years, and that's enough," Crotchfelt said. "I don't really want to be a landlord. I want to focus my efforts on our customers and employees."

The old building also would need millions of dollars in upgrades to elevators, HVAC and other systems in coming years, so the move to the mall lets The Star avoid a hefty capital outlay, Crotchfelt said.

The rent The Star and Gannett will pay under their 15-year lease in Circle Centre is about equal to operational costs in The Star building, Crotchfelt said.

The rent will be "exponentially more" than Nordstrom paid, Contis said. "The former occupant was not paying a lot of rent. The rent was negligible," he said. The lease with The Star and Gannett, he said, is "economically very good for the (mall's) ownership group."

The Star was among 19 area businesses that were original investment partners in the mall with Simon. The Star retains its small equity share in the mall, but being a minority owner "had no impact on our decision to locate at 130 S. Meridian," Crotchfelt said.

She said the $10 million cost to convert the space will be shared by landlord and tenant. One major expense was knocking holes in the old Nordstrom facade to create windows on the upper floors.

The Star will bring some of its storied past along to the mall. Along with other mementos, the new offices will display artwork formed from pieces of art deco railing from the old building that was shaped like newsprint, and a quote from former publisher Eugene C. Pulliam. The Pulliam family owned the paper from the 1940s until the sale to Gannett in 2000.

'Renewed energy'

Sherry Seiwert, president of Downtown Indy, said she thinks The Star's move "is going to spur renewed energy for the mall" and the area around it.

"To be able to retain the number of employees at The Star in the Downtown market is critical. I think it can only help to improve the mall by having additional employees in closer proximity. That's going to make a significant difference."

It's not like The Star's arrival, however, will spur much new development in the area. The historic Wholesale District that includes the mall is largely built out. So restaurants and other businesses that hope to feed off The Star's presence will for the most part have to locate in existing nearby buildings.

Greg Stipek, manager of the 300-seat Champps Americana sports bar and restaurant in the mall, said The Star and Gannett's 800 workers should bring a meaningful uptick in business to many area restaurants, especially at the lunch hour.

"It gives us a new audience to help build some lunch regulars. It's a good thing. That (Nordstrom) spot has been empty for a couple of years."

The Star's not using all the Nordstrom space. Simon still has room for three restaurants on the ground floor and about 15,000 square feet for retailers on upper floors.

The only announced taker so far for the remaining space is the California casual-dining chain Yard House, which will open a restaurant on the ground floor in 2015.

As for The Star's former home, much of it will be razed by new owner TWG Development. The block will be redeveloped under a $102 million plan that will add more than 500 apartments and retail space and slap a new name with an old ring to it on the block: Pulliam Square.

Call Star reporter Jeff Swiatek at (317) 444-6483. Follow him on Twitter: @JeffSwiatek.