Firms Interview for Area Two Master Developer

(posted June 6)

Four firms vied for the position of Master Developer for Area Two on June 5. The Speedway Redevelopment Commission listened to 4 hours of presentations from Browning Investments, Paragon Companies, Compass Development and Construction, and Mansur Real Estate Services and Greenstreet LTD. The SRC accepted the proposals for further review.

All four firms saw the importance of the I-465 reconfiguration as an opportunity to create a new gateway for traffic to instantly realize they are in Speedway.

Each developer had a different insight. Browning Investment saw the Hulman Memorial Way as a great asset that shows that Speedway is willing to make an investment. Matt Carlstedt explained the fate of the shopping center still remains unknown. He said that the Australian owner received a new extension on its debt until December 15. The conglomerate is facing billion of dollars in debt. He said letting go of the shopping center for $5 million to $10 million would not solve the problem with portfolio debt in the billions of dollars.

As far as some of the poor housing condition, Carlstedt suggested in the interim to use code enforcement more often and to contact HUD. The lender should be informed that the client is not providing suitable housing.

Greg Fulk of Paragon Companies emphasized that retail revitalization is the company's area of expertise, and it plans to adhere to the SRC's goal to be a regional retail destination center. Its current clients include Panera Bread, AutoZone, Family Dollar, J. D. Byrider, Walgreens, and Meijer.

Fulk suggested developing eight to ten foot trail along Crawfordsville Road as well as converting International Village into a retail center. The company concluded that once the interstate configuration is completed, there will be enough traffic and visibility to support another retail center.

Chuck Cagann of Mansur Real Estate Services and Jeff Kingsbury of Greenstreet LTD emphasized the importance of unifying the Speed Zone and Area Two since the two areas are less than 2 miles apart. They suggested a "segmentation strategy" that would hire multiple developers to carry out the projects.

Cagann explained that the Speed Zone has limited space and that only so many tenants can move into the 40 acres for a racing campus. He suggested the spillover could go to Area Two. SRC member Ron Fisher explained that often it is a car sponsor who will dictate where the race team will locate. He thinks some sponsors will push for Speedway.

Speedway is not the only place where retail is suffering. Kingsbury said about 20 percent of the retail centers are failing in the US because of poor tenant strategy.

Fisher agreed that poor tenant strategy is the downfall to the super center. He emphasized he can't go to Petco with his dog and then to MCL. He also noted the incompatibility of the jewelry store in same out lot area with an auto parts store.

Steve Bishop was concerned with the low end housing market in Speedway. He suggested the housing area north of 25th Street be incorporated in Area 2 with the potential to produce higher-end homes.

Fisher wanted to know how they could change people's mentality about Speedway's mediocre home prices. He said there is a home for sale on 29th Place listed for about $239,000, but Fisher doubted if the market would support it when the surrounding homes sell for a lot less. Fisher said there are times he felt like quitting and moving to Carmel because nearby vacant property is effecting his property value, but he feels like he needs to stay and fight to make Speedway a better place.

Cagann said "You guys are the hope to raise the bar." Cagann said there will always be the naysayers but most of the people are supporting the SRC's efforts. There was also a positive reaction towards Bishop's endeavor to attract universities to the Speed Zone.

President Vince Noblet expressed his concern how the SRC can stay "upright" while taking on two redevelopment projects. Cagann agreed that SRC did not have enough resources to leverage for both projects, so it is critical to find other source of public funding in addition to private investors.

Cagann also noted that it is important to expand Area Two. An expansion would increase the tax increment revenue to provide more funding power to the SRC.

Fulk explained that most investors like to see a 15% to 17% rate of return for the riskier investments.

Compass Development and Construction emphasized demographics to explain how and who will come to the market. The presentation highlighted that 47,749 people live within one mile of area two and 198,000 people within a five mile radius. As a regional destination, over 2.9 million people live within 100 miles.

The Speedway Super Center is currently functioning as a power center with restaurants in the front and the big box retail at the back. Demographics show that most people do not like to walk over 300 feet or they will not go in. These factors are important to attract customers to retail area.