Committee moves Old City Hall redevelopment and $66M bond authorization to full council

The Metropolitan and Economic Development Committee moved Proposal 76 to the full City-County Council on March 10 after presentations about a planned mixed-use redevelopment that would connect a new 29‑story tower to Old City Hall and use up to $66 million in taxable economic development lease‑rental revenue bonds to fund a portion of the project.

Megan Vukasich, director of the Department of Metropolitan Development, told the committee the project began after a 2022 request for proposals and that TWG Development was selected to redevelop the surface parking lot adjacent to Old City Hall. "In October of 2022, DMD issued a request for proposals for redevelopment of the surface parking lot next to Old City Hall," Vukasich said.

Nut graf: Committee members heard developers and the city’s financing team describe the proposed capital stack, public approvals secured to date and the specific bond structure before agreeing to advance the ordinance to the full council for final consideration. The item was presented as a financing tool that the developer says is necessary to close a funding gap created by higher construction costs and interest rates.

Chase Smith, vice president of market‑rate development at TWG, presented project details and a schedule. He said the development would be a 29‑story mixed‑use tower linked to renovated Old City Hall, with a rooftop amenity deck, 23 condos, 86 apartments (including a 5% commitment at 30% AMI tied to an earlier TIF approval), 156 hotel rooms operated under the 21c brand, about 208 parking spaces and roughly 2,500 square feet of ground‑floor retail. "We stand ready to break ground of this project in late July and finish in about 3 years in July 2028," Smith said.

Financing overview: Joe Glass, executive director and general counsel of the Indianapolis Bond Bank, summarized the bond and loan mechanics. Proposal 76 would authorize taxable lease‑rental revenue bonds in an amount not to exceed $66,000,000. The city, acting through the Circle Area Community Development Corporation, would loan bond proceeds to the developer; up to $50,000,000 would be held in a project fund disbursed by the city to pay construction invoices, three years of capitalized interest, a debt service reserve surety and issuance costs. Glass said bonds would have a maximum stated interest rate of 8% (the presentation anticipated roughly 5–6%), a 25‑year term but an expectation that the developer would repay outstanding bonds after 10 years, and that the loan would be backed by a corporate guarantee from TWG and a personal guarantee from TWG’s CEO for an amount equal to maximum annual debt service.

Smith and the financing team described other elements of the capital stack: redevelopment and historic tax credits, Lilly Endowment Initiative funds, private equity (TWG committed nearly $80 million in equity), and private debt markets. Smith said the full project cost is currently estimated at about $248 million and that higher construction costs and elevated interest rates had created a funding gap the proposed city loan structure is designed to fill.

Support and public testimony: Leonard Hoops, CEO of Visit Indy, urged committee support, calling 21c a growing boutique luxury brand that would add higher‑end hotel inventory the city currently lacks and creating a new cultural and event venue. "21c in particular is, because it's a boutique property, boutique luxury property...would be a really nice addition," Hoops said. The committee also heard a public comment from TK, co‑founder of Allies for Humanity, who opposed allocating public financing to a luxury hotel while, in their view, the city has unmet needs for housing and services. TK said, "Your budget is a reflection of your values." That speaker also raised concerns about prior subsidized incentives for other TWG projects and displacement related to other sites previously fenced off.

Questions and conditions: Council members pressed for detail about the project fund and oversight. Megan Vukasich said city staff would hold construction funds in an account and release payments after invoice review. The committee heard that the TIF tied to the overall project was previously approved by the council in late 2023 and that the developer previously received a certificate of appropriateness from the Historic Preservation Commission on Oct. 4 for work affecting Old City Hall and the adjacent parcel; Vukasich noted that IHPC has jurisdiction over both the interior and exterior of Old City Hall. The developer also confirmed commitments on inclusion: an amended inclusion plan with the Office of Minority and Women's Business Development sets a 27% XBE utilization goal on the higher project cost, which the developer said equates to roughly $60 million of procurement target dollars.

Taxes and timelines: The developer’s municipal advisor provided an estimate that total annual taxes once the project is stabilized would be about $1.9 million per year (transcript figure: $1,872,000). Key next steps outlined by the bond bank included CAC ward approval of the loan agreement on March 19, a public hearing before the Metropolitan Development Commission on April 12, a full council vote anticipated April 7 on the ordinance to authorize the bonds, and an anticipated Bond Bank action in May.

Action taken: Councilor Gibson moved to send Proposal 76 — "authorize the issuance of the City of Indianapolis, Indiana, taxable economic development lease rental revenue bonds, Old City Hall reuse project, and execution of a lease" — to the full council for final adoption; the motion was seconded. No final council vote on the bond authorization was recorded at the committee meeting.

Ending: The committee advanced the item for full council consideration, and the proposal will return to the council with the committee’s referral and the materials presented tonight for further review and a final vote.