Indianapolis Mayor Greg Ballard’s office is reviewing proposals from five commercial property managers that want a crack at running the City-County Building for the next 30 years.
One of the bidders, who did not want to be named, said most of the proposals would provide the city with a substantial upfront payment—without increasing the city's annual cost of occupying the downtown high-rise. But the official who has been in charge of the building for decades doesn't see how the city can get cash out of the deal without an increase in costs elsewhere.
“How can anybody do that?” asked Ron Reinking, general manager of Indianapolis-Marion County Building Authority. “There are so many costs that are going to be fixed. I’m not sure how you can squeeze anything else out of that.” . . . .
Ballard decided this summer to open the City-County Building to private management because he opted for the city to take title to the building Aug. 1. Previously, the building authority held the title and leased the building back to city and county agencies, which include the Marion County court system and the Marion County Sheriff, which has a jail in the building.
City Director of Enterprise Development David Rosenberg hoped the prospect of entering a long-term pact with a reliable tenant would be so attractive to commercial property managers that they’d offer upfront cash. The city would spend that money on other infrastructure improvements.According to the Ballard administration meme, a private property management company can afford to pay a big upfront payment to the city for the right to manage the building and charge rates comparable to what city-county agencies are paying the Marion County Building Authority. If it sounds to good to be true, it probably is. The city's lease payment for the entire building last year was $4.85 million, which translates to about $7.29 per square foot compared to the $19 per square foot rate being paid for Class B office space downtown according to McLaughlin. That includes all utilities and 24-hour access to the building's parking garage. So who is lining up to take the building off the city's hands?
Four national firms are in the running: CBRE Inc., which expressed an interest back in June; Jones Lange LaSalle; Cassidy Turley; and Colliers International, according to a person close to the bidding process. Gordon Hendry, first vice president at CBRE, confirmed that his firm submitted a proposal, which he said remains confidential. “We’re very excited about the [proposal]. We think it’s the right step for the city to be exploring this.”Yeah, that would be the same Gordon Hendry and CBRE Inc. to whom Ballard awarded a no-bid real estate brokerage agreement concerning a one-block stretch along Mass Avenue that currently houses a fire station that Ballard wants to see redeveloped. Hendry's firm stands to make a million-dollar plus commission for work that could have, would have, should have been performed by city workers for no additional cost, but Ballard decided just to throw away a million bucks or more for the hell of it. Ballard is demanding city-county council approval of an expansion of the downtown TIF to include all of Mass Avenue so he can divert property tax revenues from other taxing districts to pass out to private developers to redevelop in an area that is already experiencing impressive redevelopment without any government handouts. As I reported earlier today, Ballard has told councilors pushing approval of domestic partner benefits for city workers that he won't sign their proposal into law unless they give him the TIF district expansion he is demanding.