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Union Station Still Relies on City Subsidies
(posted Nov 6)
Union Station still relies on an annual subsidy of $500,000 from the City
of Indianapolis. The inability to break even raised concerns from Metropolitan
Development Commissioner James Curtis Sr. during the MDC's November 5 pre-agenda
meeting.
Kevin Taylor, president of the Indianapolis Bond Bank, explained some proposed
tenants were turned away because the bar / saloon proposals would not be
a good tenant mix.
Mary Hauser, Director of Property Management for Browning Investments,
which manages the building, said the firm exceeded its guaranteed energy
savings plan of $78,000 by over $43,000 due to the cooling tower. She reported
that about $300,000 of the city's subsidy goes toward financing the cooling
tower.
Hauser said there is an interest in Union Station and it received a tremendous
amount of site visits. She blamed the economy for not generating additional
leasing activity. RW Armstrong expressed interest in expanding its size
while a credit union decided not extend its 500 square foot lease. The
266,000 square foot building has a 92% occupancy rate.
Curtis was troubled by an eight percent vacancy rate not breaking even.
Taylor said that some of the long-term tenants are below market rates.
Taylor explained measures are being taken to increase the rates, but some
of the rates remain grandfathered from the days when it was difficult to
attract tenants.
"We are chipping away at the subsidy," Taylor said. He hopes
that Armstrong's lease will be market or near market rates. "They
(Armstrong) that like that location."
Hauser said that more building improvements are needed, like tuck points
and window replacement in the non-historic section.
"It's an old building. Something is going to happen every year to this building. It's the nature of the beast," Curtis said.
He suggested seeking legislation for casino use. "Whether you like
the sins or not, that's where everbody's making money." Curtis thinks
it's a good location to reach people from the convention center.
"Everybody else is making money off casinos in other states."
"Everybody's leaving here and going gambling in Louisville or where
ever."
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