An announcement from IBJ’s Property Lines last week raised eyebrows when the author revealed that MainSource Bank, the new tenant in the Barnes and Thornburg Building, was using its half of the leased space on South Meridian Street formerly occupied by Borders and embellishing it with a busy array of awning signs. The article noted that the bank has installed more awnings than it originally proposed in the approval document. Many commenters were vexed that the Planning Department still seems to be giving the new tenant a pass, claiming that the Department of Code Enforcement should have intervened in an obvious violation of the City’s Sign Ordinance. At this point, it appears the City is letting the visual clutter stand on its own terms.
What garnered far less attention and opposition, however, is the final paragraph of this article: the notification that the remaining half of the old Borders space—the most prominent part, with the mezzanine—is unlikely to secure a tenant. According to the article, Barnes and Thornburg, the law firm that owns of the building (which houses its HQ in the upper floors), has decided against securing a tenant and is likely to use it instead as “a new upscale lobbyâ€. An interview with a representative from BT Building LLC, the separate agency that manages Barnes and Thornburg properties, revealed that the IBJ might have been a bit premature in its announcement: the firm is still keeping its options open and has made no definitive decision regarding the mezzanine wing of the old Borders space. Regardless of its future, its current limbo state is worthy of further scrutiny.
But what does it look like? No doubt most of the readers here are familiar with the location, but here are a few photographic reminders if it doesn’t ring a bell:
Notice the busy signage of the MainSource Bank to the left of the doorway; the focus here is on the still vacant space to the right.
While the interior is closed to the public, it’s not too hard to peer inside, but I managed to get permission to access from BT Building LLC. From there, I was able to take a number of photos of the interior. The outside doorway leads to a small foyer with elevators, and here’s the view upon entering from those doors to the right of the foyer.
The space was originally a Merchants Bank, and many of the marble teller counters remain from its subsequent uses as Borders and, prior to that, a Paul Harris women’s clothing store:
Here’s looking back at the door from which I entered:
The ceiling details and light fixtures give the room energy even when it is more or less empty.
I don’t get as excited about the street-level entryway, but a creative interior designer could make better use of it.
The stairway to the mezzanine seems a bit dulled by the homogenizing influence of a national chain like Borders, but it could be quite grand under the right treatment.
Though not huge, the mezzanine is wide enough to adapt to a variety of uses.
Particularly useful is the fact that a separate elevator links the first floor with the mezzanine, so that future tenants will not depend on the core elevator in the foyer to get around.
It would be a respectable space even with minimal alterations; in the right hands, it could be inspiring. And it sits on Meridian Street, the city’s primary north-south spine and right in the heart of the Wholesale District’s restaurants and nightclubs.
The lack of success in securing a tenant since Borders has indubitably impelled the firm’s leadership to consider whether retail is worthwhile at all. Barnes and Thornburg owns the building and already occupies over 90% of the leasable space. Whoever occupies the storefront would need to respect the integrity of the interior’s architectural details as well as the firm’s overriding mission. My conversation with a representative from the firm indicates that they recruited a powerful retailer like Apple to occupy the space with one of its stores, but Cupertino didn’t bite. A restaurant seems to be the most likely tenant but, according to the representative, the firm is not keen on the idea for a number of reasons: the smells waft up to higher floors, logistics regarding food delivery are often burdensome, and the restaurants keep different hours that typically require heightened surveillance through the night.
From an outsider’s perspective, Barnes and Thornburg’s possible decision to withdraw the space seems to defy the logic of the management of real estate: why relinquish what should be some of the most lucrative retail in the entire city for an enhanced lobby? Essentially the law firm would be jettisoning 22,000 revenue-generating square feet by taking it off the market. Admittedly, for as long as remains untenanted, it offers little more than an eyesore and a maintenance liability for the firm. It is an albatross. But once it becomes a mega-lobby, it will revert to common area, guaranteeing that it will never generate revenue on a pro forma balance sheet and will actually prove an added expense through CAM (Common Area Maintenance) costs. Bear in mind that Borders could easily have paid utilities like electricity and heat while a tenant, or, at any rate, the landlord BT Building LLC would most likely have passed those costs onto them. As a lobby, BT Building LLC will incur all those maintenance and operational costs.
In the absence of any real insight into the nature of the deal, the decision here seems puzzling. Perhaps Barnes and Thornburg’s leadership is convinced that a glamorous lobby will attract enough of a client base to compensate for this lost leasable space. Was the firm asking too much for the space in this persistently sluggish economy? Maybe retail is hopeless until population density in downtown Indianapolis justifies it. After all, South Meridian should be a prime space, yet this building has remained vacant for a year and a half. The Nordstrom down the street has been vacant almost as long, with nary a peep from Simon Property Group in recent weeks. Perhaps we are overconfident in our downtown’s magnetism? But is that a reflection of intrinsic weaknesses to South Meridian retail or characteristic of a broader trend: American retail is always soft because we have such a wretched excess of supply? And will it get any better as more people purchase goods online?  Was Barnes and Thornburg so eager to secure a tenant that both it and the City did anything—including forgo signage codes—in order to attract MainSource Bank in the rest of the old Borders space? Even the BT representative admitted that, by most metrics, the most likely tenant would be a restaurant at this point in time. One can only hope the leadership at the firm can either overcome some of its prejudices against restaurants or will be able to forge a deal with an established, well-run national chain with deep pockets, which would be willing to lease the space at a premium that, in turn, would allow Barnes and Thornburg to absorb some of the restaurant’s perceived negative externalities.
I’m not sure the decision is yet confirmed, and, in my ignorance of the potential complexity of deals-gone-bad, I’ll withhold from any vituperations. I leave this analysis open-ended both with the hope that further discussion will help to answer these questions or brainstorm other possible tenants. If anyone has an argument in favor of the law firm’s potential decision to build an enhanced lobby, I’m all ears (or eyes). But it sure seems that significantly fewer pairs of eyes will have the privilege of seeing this beautiful old Borders space if becomes restricted from the average consumer or passer-by.
It seems to me that a lot of stores and businesses, retail, food, and otherwise, are opting for smaller spaces and either utilizing online or delivery and keeping the storefront minimal. The days of these mega music and book stores are likely close to over outside of malls. And hell, those aren’t doing all that well either. Even malls in some nicer areas throughout the country are struggling to make it.
Leaving that space vacant and without a specific purpose makes me sad. That space is absolutely beautiful and timeless. I adored having a bookstore there. It’s one of those unique things that give a town character and charm because you can’t find this anywhere else.
My vision for that space would be a nice coffee house, perhaps with live music. Sure there are food delivery issues, but not nearly as large or as frequent as a restaurant. Clients of B&T could enjoy the space as well. As far as smells, who doesn’t want to smell fresh coffee first thing in the morning? The food menu would be relatively light with things like sandwiches, pastries, and soups. They could cater to the lunch crowd or the night crowd. Either way, most coffee shops I frequent don’t cause a ruckus, even if they are open at night, and tend to attract a quiet if not bookish type of client.
This place could be a mega Starbucks, extension of a local coffee house, or a brand new idea. I would frequent any one of those options. While it’s true that malls and bookstores aren’t as popular as they used to be, having a space to sit with others and slow down a little can never be purchased online. As people begin to appreciate the value of these types of spaces, the interest can only go up.
I’m crossing my fingers for this space and hope B&T stays open to the possibilities.
Another great piece, Eric. You provide truly in-depth analysis that I appreciate. I’m no urban planning expert, but I have lived in the downtown area for the better part of 13 years. While the downtown has vastly improved in that time–with much more dining variety, biking facilities, Georgia St., White River State Park, employers like Exact Target and Angie’s List and the addition of some housing–the downtown core has yet to achieve the critical mass of residents necessary to support retail and dining (I can’t count how many small, and some large, restaurants I have seen come and go in this time). Circle Center has been supported, and not very firmly of late, by convention and holiday traffic. Obviously, this is improving with development of more and more housing, such as CityWay, Cosmopolitan, the coming Block 400 and other apartments on Virginia, Indiana and Mass Ave. If a suitably dense development can find its way to the Market Square site, downtown Indy may finally arrive! I am so sorry to have to be leaving this great city at the cusp of its adulthood, but I am looking forward to enjoying the “seniors” of urban form on the east coast. I’ve very much appreciated the insight and opinion on display here at Urban Indy and sorry I haven’t been able to get to know more of you personally. Keep up the great work and I can’t wait to come visit the Circle City to see what a beautiful woman she becomes!
The loss of this bookstore really took a hit on the variety of things to do downtown that aren’t related to the mall or sporting events. It would be better if Mass Ave/Fountain Sq could get a cornerstore-like bookstore to serve residents. I don’t think you can say you’re a real urban neighborhood without one. How about one along the cultural trail that caters to bikers and offers food/drink?
Of course there is the new Indy Reads Books http://indyreadsbooks.org/ on the north end of Mass Ave, on the Cultural Trail. I don’t know if they offer refreshments.
Interesting to me that Main Source didn’t actually take that spot that used to be a bank. Probably another sign of the times that a bank would take the less challenging and more adaptable (but utilitarian) spot. Of course, there is also added value to the corner location.
Thanks again for all the comments. Kevin, I agree that it’s a sign of the times that MainSource didn’t take the old bank space featured in this blog post. It’s hard to say which of the two portions of the old Borders would have been pricier: the current MainSource spot is much duller and more utilitarian (and probably smaller) but it is a coveted corner. Eric, while I agree that it’s a shame to lose the bookstore there, I’d say it’s a pretty tall order to argue that you’re not “a real neighborhood without one”. Chatham Arch used to have the gay-lesbian bookstore, but like so many bookstores in the age of e-readers and Amazon, it folded. Josh did raise the good point that Indy Reads is on the edge of Mass Ave, though it’s more of a non-profit literacy promotion organization first and foremost.
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Lori, you raise a good point about the restaurants, though it seems at this point it is a prejudice that the leadership at B&T would need to overcome. I can understand the drawbacks, but restaurants are one of the few retail typologies that isn’t going to feel much encroachment from online purchasing: so much of a restaurant’s success depends on the service just as much as the food. And decor is important too–not so much with a bookstore, where appearance can help, but many highly successful bookstores look like dumps. I still think a major national chain restaurant is the most likely successful option for a space like this.
I’m deeply saddened to see that gorgeous interior go, and remain, empty. I never tired of the south half of Borders’ space, whether I had it to myself or it was packed with people at a special event, Christmas shopping, etc. Nevertheless, to occupy it profitably will be a real challenge for any tenant. The spaces are awkward and difficult to use efficiently. They don’t even have both bathrooms on the same floor. Changing the light bulbs in those fixtures is an unbelievable pain. It will demand a great deal of patience and creativity from the next tenant, if there is to be one. I hope someone will give it a go.
It is interesting that news stories about this building rarely mention that it is designed by Daniel Burnham (I think the only such building in Indianapolis), or that it was the city’s first skyscraper and for many years dominated the skyline.
Eric and Kevin, I think the whole first floor was a bank at one time. Anyway, it doesn’t have to be a ‘sign of the times’ that a corner location is better than mid-block, or that modern bank customers don’t actually want to conduct their business through metal bars.
I appreciate the comments as always. Good point, Tim, about the bathrooms not being on the same floor. Although it is pretty standard to “stack” bathrooms in office buildings, most these days would probably have both genders on both floors. Even with the elevator, it is not desirable for a customer on the first floor to have to go upstairs to use the loo–particularly in a restaurant environment. It’s much more acceptable for a bookstore where traveling between the floors is more expected. Adding a second gendered bathroom (double-stacking) might be feasible but would be very expensive. Flavius also raised a good point that metal bars are no longer necessary or even desirable for a bank these days; it may convey the exact opposite impression that a bank would be seeking. But corner parcels are usually the most expensive real estate, primarily because of their bi-direction visibility, particularly through a car, which is the way most people would see MainSource.
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I’m relieved to see that no one has suggested some particular retail tenants. (“The site should be a Pottery Barn/Restoration Hardware/Crate and Barrel.”) Obviously if the metro can’t support two Nordstroms, it’s not likely to support any of the other large tenants comfortably situated up north at the Fashion Mall.
I think this space has a lot of potential. Coffee (day) / Cabaret (night) style place would make sense. Or piano style bar in the evenings. I think the law firm would benefit from having a large (and classy) coffee house where they can occasionally meet clients for informal meetings. It also creates a more attractive environment for younger employees. But to make it financially viable, you will need to have something going on at night. White Rabbit in Fountain Square does well with Cabaret style entertainment. But other things would work well too. I went last night to Tin Roof where hundreds of people where elbow to elbow at the concert. And this location / space has more potential than Tin Roof. However, it would require a large investment. The law firm would have to be willing to go easy on the rent in the first couple of years of operation.
Hmm, while I love local restaurants and retail, I think the challanges of the space may be better suited for a national chain restaurant. The ornamentation of the interior space could work well for a place such as a Grand Luxe Cafe/Cheesecake Factory. Not that either would be my first choice of new dining establishments in downtown Indy, but from a convention/tourist standpoint, those seem to be strong brands.
I too am puzzled at why the delay in leasing the space. The location and layout seem suitable for a number of things. I wonder what B & T have been thinking?
Anyway, it’s good to see the teller stations have been preserved. I guess I am dating myself but I still remember opening a passbook savings account at them when I was a kid.