Bottleworks’ Pivot: Indianapolis’ Downtown Development Dilemma

The Bottleworks District was initially envisioned as a vibrant “live, work, play” hub, promising hundreds of new apartments alongside boutique offices and ground-floor retail. However, recent developments for Phase III reveal a significant departure from this original vision, raising concerns about the future of downtown Indianapolis’s urban planning.

The Fading “Live, Work, Play” Dream

The Bottleworks District was pitched as a model for a self-sustaining 18-hour corridor, fostering a dynamic urban environment with a balance of residential, commercial, and recreational spaces. This ambitious plan aimed to revitalize downtown Indianapolis and set a new standard for mixed-use development.

Why the Shift? Developers Face Challenges

The promised residential component for Phase III has been abandoned. Instead, the project will now feature an office tower for Ice Miller law firm, built atop a multi-floor parking podium. This revised plan eliminates both housing and retail from this phase, making it shorter than originally proposed and featuring more parking floors than leased office space.

Developers cite several factors for this pivot. The COVID-19 pandemic significantly reshaped demand for urban living, and construction costs soared from an estimated $200-$250 per square foot to nearly $400. Furthermore, an attempt by Hendricks Commercial Properties, the Bottleworks developer, to add more apartments in Phase II by increasing building height was rejected by the city’s preservation commission. Faced with these obstacles, a move towards boutique office space appeared to be the more financially viable short-term option.

Short-Term Gains, Long-Term Liabilities

While the decision might make financial sense in the immediate term for developers, urban planner Jeffery Tompkins warns that office-heavy projects can create long-term liabilities for the city. Such developments typically generate activity only during working hours, leaving them empty at night and on weekends. They are vulnerable to market shifts and competition from new suburban office spaces, risking becoming “stranded assets.”

Indianapolis is already grappling with this issue, as seen with the Gold Building, a former downtown landmark. This office tower is currently being converted into apartments, a project that required up to $18 million in public loans to stay afloat. This trend of subsidizing the repurposing of outdated office spaces is becoming a costly pattern for cities across the country.

A Pattern of Poor Planning

The Bottleworks pivot highlights a concerning pattern of poor land use in Indianapolis, especially on prime city parcels. Allowing inflexible office space can lead to future taxpayer-funded conversions. Denying density in housing or failing to encourage true mixed-use development undermines downtown’s resilience, forcing the city to write “multimillion-dollar checks to bail out yesterday’s office projects.” Both developers and the city are held responsible, with developers often pursuing the easiest financial path and the city reinforcing these decisions through rigid zoning and burdensome codes.

Building for Flexibility, Not Fragility

To avoid repeating past mistakes, Indianapolis needs a forward-thinking land-use strategy focused on flexibility and resilience. This involves approving projects that offer greater diversity, density, and adaptability, especially those that support housing. New buildings should be designed with the possibility of future conversion in mind, allowing offices to become homes, or vice versa, without requiring massive public subsidies. This also means streamlining codes to make such conversions easier.

By embracing these models, Indianapolis can create dynamic neighborhoods that genuinely embody the “live, work, play” ethos, rather than constructing fragile developments that risk undermining the city’s future vibrancy.

Bottleworks Phase III: Vision vs. Reality

Frequently Asked Questions

• What was the original vision for Bottleworks Phase III?
  The original vision for Phase III included hundreds of new apartments above boutique office space and ground-floor retail, creating a dynamic “live, work, play” environment.
• Why did the plan for Bottleworks Phase III change?
  The change was attributed to the pandemic’s impact on urban living demand, soaring construction costs (nearly doubling), and the city’s preservation commission rejecting increased building height for more housing in an earlier phase.
• What are the risks associated with this office-heavy development?
  Office-heavy projects are considered fragile; they become empty outside of business hours and are susceptible to market shifts. They risk becoming “stranded assets” that may require public subsidies for future conversion, as exemplified by the Gold Building.
• What could Indianapolis do to prevent similar issues in the future?
  The city should prioritize flexible land-use policies, encourage diversity and density, approve resilient projects, and mandate that new buildings be designed for potential future conversion (e.g., offices to homes) without requiring large subsidies.
• What is the “Gold Building” example, and how does it relate?
  The Gold Building, a former downtown office landmark, is currently being converted into apartments. This project requires up to $18 million in public loans, serving as an example of the costly burden cities face when repurposing outdated, inflexible office towers.

As Indianapolis navigates its growth, embracing a land-use strategy that anticipates change and prioritizes flexibility over fragility is crucial for building a truly resilient and vibrant downtown that serves all its citizens.

Indianapolis Bottleworks drops housing for law office