MONDAY, OCTOBER 13, 2008
by Mark ThomtonIndianapolisWhile the construction business may not be booming in most cities across the United States, Indianapolis is happily bucking the slowdown trend. This is largely because of the boost that the city's private sector is receiving from $3 billion in public infrastructure investments.
By 2011, Indianapolis will have received a major facelift as the culmination of three significant projects -- spanning nine years of development -- will come to a close. The fruits of this labor are already evident in the $720 million Lucas Oil Stadium, which kicked off its inaugural season as the home of the Indianapolis Colts this football season.
Soon to follow will be the $1.1 billion Colonel H. Weir Cook Terminal at the Indianapolis International Airport. The 1.2-million-square-foot passenger terminal is set to open on Nov. 11, and will serve as a dramatic front door to the city for travelers and visitors.
Finally, the Indiana Convention Center will break ground on an ambitious $400 million expansion. The RCA Dome will be deflated in late October and imploded to make way for a 400,000-square-foot-expansion, which will effectively double the convention center's current capacity. The project will be capped off with a 34-story, 1,600-room, Marriot Hotel, directly adjacent to the convention center.
While this may not be space that can be leased or sold, local brokers are excited about the opportunities it will bring, and what it will mean for Indianapolis on a national stage.
"It does affect us," says Scot Courtney, president of
Grubb & Ellis | Harding Dahm Co. "You have a larger convention center and you have a new, much larger stadium venue. This creates more demand. There will be more convention traffic and events in the downtown area. This positively impacts retail and restaurant returns. It drives demand."
Courtney says that the increased foot traffic and hotel space in the immediate downtown area has created a need for more restaurants and entertainment options. He has spoken with several interested parties and expects to see new dining and retail stores in the near future.
"It creates other opportunities for development and investment interest," says Courtney. "Another effect is that it provides amenities for people who want to live downtown. It will allow for more options to live, work, and play downtown."
The developments will likely appeal to locals, but more importantly, they will work in cohesion to impress business travelers and convention goers.
Indianapolis officials wanted to increase convention traffic and compete for larger shows that have traditionally eluded the Hoosier state's capital. That could change with the planned improvements and expansions.
The convention center expansion, Lucas Oil Stadium and the Marriott hotel will combine to offer more than 1 million square-feet of meeting space.
"We have a list of 30 to 40 customers we have not been big enough for, but now we will be big enough," says Don Welsh, president and chief executive officer of the Indianapolis Convention & Visitors Association. "This city has been designed to be a convention and meeting destination."
Lucas Oil Stadium offers 180,000 square feet of exhibition space and will be connected via a skywalk to the Indiana Convention Center expansion. Likewise, the Marriot will have 100,000 square feet of ballroom and convention space and will also connect to the convention center.
Welsh says that a few conventions that annually take place in Indianapolis have maxed out the current space. With the expansion and additional space, the city will have a better chance of retaining them and allowing for future growth.
The increased convention space will bring more visitors, which will eventually increase hotel stays in the near future. The addition of the Marriot will help meet this demand.
"We have identified that we book 500,000 room nights a year currently," says Welsh. "By 2012 and 2013 we will be up to 800,000 to 900,000 room nights a year."
Events at Lucas Oil Stadium will also contribute to the increased traffic as the city has secured the Super Bowl for 2011. Indianapolis has also landed an unprecedented deal to host the NCAA Final Four men's and women's basketball tournaments in 2010 and 2011 respectively. It is possible that the stadium will play host to each tournament once every five years.
With the new development, local real estate professionals are instinctively thinking about retail and dining possibilities in the area. They are also considering how the improvements could give a boost to the city's office market.
"The new developments suggest a city where progress is happening," says Ron Gifford, president and chief executive officer of the Indy Partnership, an economic development vehicle for the region. "People want to put their business in places that are moving forward. Successful companies want to be in a place that is growing and thriving. A personality of a community can go a long way in helping businesses make those decisions."
The most expensive project coming on line -- and arguably the most needed - is the new terminal at the IIA.
While the Lucas Oil Stadium and the convention center expansion were partially funded by public money through the State of Indiana and the City of Indianapolis in the form various tax increases, including food and beverage taxes, the terminal project is mostly privately financed.
The federal government delivered a $120 million transportation package, but the remainder was financed by individual airlines and airport revenue.
However, the long-term savings for airlines is impressive. As fuel has skyrocketed in price, the IIA has not been an efficient airport for airlines, as taxiing takes an average of eight to 12 minutes. The new terminal and layout will allow for airlines to now taxi for half that time, which will save them $12 million annually when figured at 2007 fuel costs.
The new terminal was designed by HOK Architects, and will have a large glass wall that frames the Indianapolis skyline. The design is meant to be visually stunning, but it will also be a major achievement from a functionality standpoint.
"We describe ourselves as the first major airport designed after 9/11," says David Dawson, spokesman for the airport construction project. "We were in position that the design work was done after 9/11, and this was an advantage. It allowed for more space for security, which is practical for today's traveler."
The new airport will also be a commercial retail venture that may become a destination spot for locals. Because only 5 percent of the airport's travelers are there for connection purposes, the airport authority decided to concentrate the dining in a pre-security area that will be dubbed Civic Plaza. This way, the restaurants and retail shops may become a destination shopping location for locals.
"We decided to solicit individual expressions of interest from retailers and try to negotiate ourselves into a mix that we wanted," says Dawson.
Civic Plaza will have several national brands, such as Starbucks, CNBC, Brooks Brothers and more, but it will also have a few options that are unique to Indianapolis and only located at the airport.
"We will have the first Indy 500 Grill, which carries Indy 500 brand," says Dawson.
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