Earlier this year (itâ€™s still 2017!), Buckingham Companies broke ground on the next phase of CityWay, an expansive development south of the train trestle on land formerly belonging to Eli Lilly and Company.
The first phase (completed in 2012) features over 250 apartments, parking garages fully hidden from the primary streets, the Alexander Hotel, over 40,000 square feet for retail, and a partnership with the YMCA for a voluminous fitness center across from the Alexanderâ€”all on the south side of the tracks, primarily fronting Delaware and South streets.
This next phase has morphed considerably over the last few years, but an Indianapolis Business Journal article from this past springÂ indicates that it will add 400 more units, 20,000 square feet of office space, and additional retail. Unlike the first phase, which (outside of the YMCA) operated in a superblock framed by Delaware, South, New Jersey, Virginia and the railroad trestle, this portion will extend to the western side of Delaware, and the portion on Virginia Avenue will directly front the Cultural Trail, culminating in a 14-story midrise, where 8 stories will stack atop an existing 6-floor parking garage.
In most respects, the combination of residential density and office is a huge boon to this corner of downtown, which previously hosted a vast, underutilized parking lot. And the current phase is no exception; it unequivocally represents a higher and better use than anything that preceded it in recent memory, while the combination of residential and commercialâ€”of long-term inhabitants versus impromptu visitorsâ€”creates an interplay that fosters far more vibrancy than the space would afford if it remained exclusively under a single land use. Even better: the proposal will salvage the century-old livery building, relocating it to a more advantageous site a bit to the north on Delaware, with the intention of a strategic adaptive reuse for a commercial/retail tenant. The completed project will endow both sides of Delaware with considerable activity where it previously afforded nearly nothing.
Now begins the inevitable â€œhoweverâ€¦â€
The â€œadditional retailâ€ for Phase 2 of CityWay is a qualified disappointment. First of all, the northwest corner of South and Delaware Streets will host a CVS with a drive-thru (seen here in Google Street Viewâ€”the building with the mural has since come down, while the brick livery building will get moved and preserved). The drive-thru element was deservedly controversial. The Department of Metropolitan Development granted Buckingham a variance (against the recommendation of DMD staff), since drive-thrus are typically forbidden within the Mile Square. A lawyer for Buckingham argued that the ban on drive-thrus seemed â€œarbitraryâ€ since its contingent upon the side of the street for this proposal; after all, the south side of of South hosts multiple drive-thru restaurants.
Anyone who understands urban development will recognize how specious this argument is, since the very intention of Regional Center Guidelines for downtown is to uphold certain building standards for the oldest and most central square mile in the entire city. Since the north side of South falls within the historic Mile Square, the argument for higher standards is reasonable and hardly capricious. Yet, through this variance, the City caved on its most important means of enforcing pedestrian-scaled urban design in the downtownâ€”a standard which other developers will logically determine as negotiable in the years ahead. I suspect that the drive-thru was a deal breaker for CVS to locate at the site, but that then begs the question if downtown needs another CVS, considering we already have one just a few blocks to the north, at Ohio and Illinois. If that long-standing CVS closes because it fails to compete with the drive-thru location here at CityWay Phase 2, the Cityâ€™s handling of this variance will compound any disappointment. (And itâ€™s not the first time the DMD has welshed on its Regional Center Design Guidelines to allow drive-thru pharmacy pick-ups.Â Fortunately the earlier example never panned out.) Letâ€™s hope one downtown CVS location doesnâ€™t cannibalize the other, because the existing site at Ohio and Illinois deploys more suitable downtown urban design.
The bigger frustration is that the western side of Delaware Street comprises the entirety of Phase Twoâ€™s retail element. Nothing else planned, according to the press releases. Meanwhile, the crane already sits at the site facing Virginia Avenue.
But this four-story structure will host little to no retail, despite the fact that it directly abuts the Cultural Trail.
Itâ€™s not easy to tell with the thin layer of snow, but the patterned brick and lighting signify this as the premier cycle-track in Indianapolis, continuing primarily along Virginia Avenue in a southeasterly direction until its terminus at Fountain Square. With an above-average density of bicyclists and walkers using the Trail, one might think Buckingham Companies would seek to capitalize on some street-level engagement. From aesthetic and urban design standpoints, this makes perfect sense. Alas, itâ€™s probably not such a workable solution from a finance standpoint. Letâ€™s take a look at some of the retail already in play around CityWay Phase One.
The high-end restaurant at the corner of Delaware and South is Cerulean, and while itâ€™s achieved high reviews and reasonable success, its closure at the end of 2017 (after a nearly six-year run) suggests that it faltered in the last year or so. Fortunately it appears to have already found a replacement, suggesting that restaurateurs still find the prominent location in the first floor of the Alexander Hotel desirable. Elsewhere, the success has been patchy:
This courtyard setback along South Street provides outdoor seating in favorable weather for multiple restaurants and, at various points, the prime gallery space for Indianapolis Museum of Contemporary Art (IMOCA). But the protruding apartment buildings in the far right of the photo have been less successful.
To the best of my knowledge, despite nearly complete occupancy for the apartments, the first-floor retail space for the wing in the background has never found tenants.
Delaware Street frontage hasnâ€™t fared much better.
A few tenants (Qdoba, a salon), the leasing agency, but a lot of emptiness. One restaurantâ€”a New York-style deliâ€”closed after a little more than a year. Particularly disappointing is the northernmost retail slot along Delaware.
I recall hearing that a coffee shop had once considered this little storefront, and it would have offered a nice alcove for some protected outdoor seating just around that corner.
But nothing has materialized.
Given the spotty success rate in securing retail tenants for Phase One, itâ€™s no surprise that the Buckingham Companies was particularly chary to unfold a great amount of retail for this next phase. Most development pro formas anticipate absorbing the leasable space to at least 90% within two years; such a forecast would undoubtedly result in some failed benchmarks as the developer begins to amortize its loan. And why should a bank lend additional money for a phase with tons of retail, after such a lackluster track record so far?
Thus, we can expect the Cultural Trailâ€™s segment along Virginia Avenue to offer a pretty bland, unengaged streetscape. It doesnâ€™t help that the portion of the Cultural Trail that passes through the parking garage has gone bust.
Within that dark opening is an overhead installation called Swarm Street, which the designers of the Cultural Trail intended to serve as the signature art project for the entire length of the trail, with motion-interactive lighting. It lasted as a test run for a few months, then water seepage damaged it, and, four years later, itâ€™s difficult to determine any evidence of a repair or replacement. Itâ€™s just a bunch of metal spindles handing from the ceiling. And the view across the street from the Cultural Trailâ€”on the other side of Virginia Avenueâ€”isnâ€™t much better.
The Anthem headquarters entered the scene many years before the business community had much confidence in a downtown resurgence, and the design seems much more suited to North Meridian Street in Carmel than the heart of downtown. At least it brings a density of workers to the area, but thereâ€™s not much to look at. And now, all those Anthem employees wonâ€™t have much to see from their office windows, once CityWay Phase Two goes up.
So much for a strong commercial strip linking the downtown with the Fletcher Place neighborhood. Iâ€™m not sanguine that much of anything will change in the urban design at this point, when construction equipment is out and the City has approved scores of permits. The condition facing CityWay Phase Two parallels that of downtown development throughout the country: demand is there for housing, but the crisis facing bricks-and-mortar retail means that, even though enthusiastic millennials gobble up those residential units, the storefront absorption lags or languishes in long-term vacancy. Most developers would rather not touch retail at this point of big-name closures, struggling malls, and Amazon imperialism. Itâ€™s financially irresponsible to make any other decision.
But hope still springs eternal, and, at the very leastâ€”in case weâ€™re dealing with a short-term setback for the retail sceneâ€”a clever developer and architect could still forge some compromise solutions. After all, itâ€™s possible that these additional units will give CityWay the much-needed density to spur more interest in the vacant spaces. And it could spur additional apartment development in nearby vacant parcels. So, what to do with the existing first floor?
- A single banner tenant. Rather than saturate the entirety of Virginia Avenue with retail, create one small space on a portion of the frontageâ€”perhaps the most prominent corridorâ€”and soup it up with amenities. Itâ€™ll be good enough that someone is likely to take the space, much as they did with the one retail space at the Mozzo along Virginia Avenue in Fletcher Place.
- Pop-ups, food trucks and installations. Since tenants are increasingly hesitant to secure long-term leases, the management at CityWay may consider short-term agreements (and the infrastructure that would support them) to help liven up this area. This will take administrative work, and all the tree-shaking may still prove unfruitful. Beyond just food trucks and outdoor seating, a cost-effective solution may include an interactive, durable sculpture, a water feature, or something like a bocce court.
- Phased programming and design for the interior. This solution is likely the most difficult, but it could yield the best long-term value. Perhaps Virginia Avenue isnâ€™t ready for retail hereâ€”yet. But, as long as the ceiling heights and fenestration support it, there may be opportunities five years from now, and the conversion wouldnâ€™t be as costly if the apartmentâ€™s common space gets a design that residential tenants can use now, until a higher bidder comes along. Make it entertainment/lounge/exercise space that has a premier function (as opposed to the more long-term common space elsewhere in the apartment, at a less advantageous location). Tenants can rent the premier space for parties or eventsâ€”maybe even a communal office setting. And, already equipped with appropriate HVAC and plumbing, the retail retrofit will come in due time.
I remain hopeful that Buckingham Companies, who generally puts out an above-average product for this cityâ€™s standards, will have the foresight to monetize the Virginia Avenue frontage in some fashion that respects the Cultural Trail. Time will tell.