Sad saga of Uptown/49th-50th/College

Dateline: Tue 03 Aug 2010

OK, let's start with Cory Schouten's July 28 story in Indianapolis Business Journal: "Developer making final push for embattled Uptown project."

Here are the first four graphs, plus the link (bottom of page):

"Developer Leif Hinterberger has spent five years and most of his life savings trying to build a $19 million mixed-use project along College Avenue between 49th and 50th streets.

"But the project—which would have been a tough deal even for a much-larger and richer developer—could be in trouble if Hinterberger doesn't land city support, and soon.

"The owner of locally based Carreau Design Corp. has refused to give up on his vision for The Uptown despite repeated setbacks, including numerous design changes in a chase to capture government grants, a growing sense of frustration among neighbors tired of looking at vacant buildings, and a lousy economic and lending environment.

"Hinterberger has defaulted on loans he took out to buy three duplexes he needs for the project, and the lenders are negotiating a potential short sale to buyers unaffiliated with the development group. The sales haven't closed, but Hinterberger said if he loses control of the properties, there's a good chance the project will 'blow up...'"

Let it blow. In my view, it's over. And please, don't cry me a river; this developer has had multiple chances to seal his deal, and he can't deliver. As a Meridian-Kessler resident/player who has watched this project unravel observed, "With Leif, it's always someone else's fault."

The backstory is that Hinterberger's proposal twice has been turned down by the Indiana Housing and Community Development Authority, which awards tax credits to worthy subsidized housing projects around the state. (He has also downsized his project, from an orignal 72 units to what he is now hoping to build -- 46).

I became intrigued with this story last spring, after noticing the abandoned and very scruffy buildings at 49th and College, west side of the street, and the gang graffiti. Meanwhile, across the street on the east side of College, things were starting to happen: Recess the restaurant was open to rave reviews, D and Z Gifts was going strong and a little haberdashery had set up shop. Also, a new restaurant will open soon where Steck's Plumbing used to be.

Initially, I was in love with Leif Hinterberger's vision: build some really cool and inexpensive apartments, put in retail below, bridge the gap between So Bro and 49th, keep the good vibes coming, attract students, secretaries and seniors to the Uptown, which would feature limited income rents. Progressive. Smart. Timely.

But every time I met with Leif in an effort to blow his horn -- three times in person, several phone conversations -- trying to get straight answers was like trying to get Dick Nixon to grow a pony tail and smoke dope. The guy can talk ideology out the wazoo, but he was often offended by anything perceived as criticism or a question that was close to pointed.

Frustrated, I set up a meeting with J. Jacob Sipe, multi-family director of Indiana Housing and Community Development Authority, the agency that gives the tax credits. This was after Hinterberger had been turned down, for the second time in two years, by the IHCDA -- despite, as Hinterberger liked to brag, having a ton of letters of endorsement from the top dogs (Mayor Ballard, Sen. Lugar, Ed DeLaney, state representative, Carmel's mayor, Northside neighborhood groups, etc etc etc).

Sipe explained that a developer who gets a green light from the state must secure an owner in the form of a large bank or corporation, who buys up the tax credits. No public monies are involved.

Being awarded credits is a very complicated and highly competitive process. How so? Projects can be submitted for approval only once a year. Again, Hinterberger has applied and been denied twice now.

In 2010, 68 applications were received from around the state; 23 received the tax credit awards.

The highest number of points a project can receive is 150. Hinterberger's Uptown received 88.5 points. (The lowest to be accepted received 107 points). Here are the evaluator factors: Rents charged, 28 points; constiutuency served, 10 points; development characteristics, 30 points; high-performance housing, 24 points; financing and market, 30 points; other, 28 points.

Three projects were approved in Indianapolis at that March hearing -- Caravelle Commons, at 16th and College, next to Martin Luther King Park; Beechwood Gardens, which is a public housing rehab; and Wexford Park, off West Washington -- new construction for seniors on limited income.

So what you are seeing with this IBJ story is Hinterberger's absolutely final, last-ditch efforts (again) to save what has already been twice denied, although, in fairness, he can apply again in 2011. The news peg, such as it is, is that Hinterberger is hanging his hat on a petition superficially in support of him. The petiotion contains 400 signatures.

But here is what the petition actually says (it's online at the Uptown website):

"We believe that there is an environmental decay in this crucial block that has limited further development, has contributed to the erosion of the area, and has hampered further connectivity back to downtown..."

There's more verbiage, but you get the point.

The irony is that Hinterberger himself has contributed to the erosion by allowing his properties to become trashy and choked with weeds.

Schouten reports on a recent M-K land use meeting at which Hinterberger made his pitch. The upshot? Writes Scouten:

"'You talk about blight,' said neighbor Eric Iverson, who has looked out on the proposed redevelopment site for 17 years. 'Right now you own the blight.'"

"Bill Blue, an architect and land-use board member of the Meridian-Kessler neighborhood group, told Hinterberger he could have 'endeared' himself to the neighborhood by investing something in the properties while he pursued his vision. Instead, the homes have remained vacant."

Hinterberger is also asking, reports IBJ, for "the city to set up a tax-increment-finance district, or TIF, to support his and other neighborhood projects. The idea is to level the playing field, making it as economically feasible to build infill projects in neighborhoods already served by streets and sewers as it is to build in cornfields in the suburbs," writes Schouten.

Schouten also notes that Hinterberger is angling to get some of those funds from the transfer of the city's sewer and water project. That, Hinterberger says, would spur groundbreaking for The Uptown.

Bullshit, bullshit, bullshit.

Bottom line: game over, man. Time for somebody else's vision.

Here's the link to the IBJ story -- and if you've read this far, definitely read the comments:

http://www.ibj.com/article?articleId=21355

Comments

Write Man [Member] said:

Funny how stuff can go on in your neighborhood so unnoticed, though perhaps that's the problem here -- the only thing anyone noticed was more decline.

I would agree that an ambitious plan like this likely needed a bigger (and more professional) gun behind it (and I'm barely aware of Hinterberger). He may have to console himself with the idea that he paved the way for someone else (a bummer if he's in fact invested all the coin he claims).

On a related note, Ruth, what have you heard about Meridian Street homeowners pushing for medians to slow traffic? My understanding is that a Harmoni meeting focused on that last night (I couldn't make it, summer sinusitis/bronchitis).

2010-08-04 11:52:44

ruthholl [Member] said:

Write Man, I am sorry I missed that meeting, too. I need to do more with that group...they are promoting the whole Midtown concept.
Here is what is on their website re: Meridian/Westfield:
* Raised landscape medians on Meridian and on Westfield along the Alice Carter Park frontage.
* New and infill sidewalks along Meridian and along 56th Street between Washington Boulevard and Illinois
* Pedestrian crossings
* Improvements at Meridian Street canal bridge, including lamp posts, seating, and way-finding signage
* Positive speed control, including additional traffic signals at 54th Street and 43rd Street to maintain a 30 mph speed on Meridian and allow safe east-west crossing.

It is all part of their agenda. What do you think? Are you for or against a slower traffic rate?

Kathy Shorter would no doubt be happy to answer any questions...you probably know who she is, how to contact her. She's on the website for Harmoni and she does live at 49th and Meridian.

Let me know your thoughts....

2010-08-04 16:17:27

news junkie [Member] said:

Any news on what happened with the Cuban sandwich/newsstand?

2010-08-04 18:29:34

hendy [Member] said:

I read the IBJ article, and on superficial examination, it looks like a case of financial indigestion. The banks are tight as a drum, and new developments in the private sector just aren't getting funded unless the assets are golden and the investment is oversubscribed.

Hinterburger has vision, but vision is like good ideas:cheap currency unless you can pull it off with more than just the lip service. It takes funding, and as was pointed out-- a decent score on several different score cards.

As a kid, I ate at the Linders. I used Steck Plumbing as a homeowner (my experience wasn't good), and remember the interesection..... the pharmacy at 46th.... and so on from my youth. I have friends that live in the area.

Sadly, it sounds like another high rise on the MSA grounds: not gonna happen.

2010-08-04 21:17:27

ruthholl [Member] said:

News Junkie: Matt Ellis, I hope I have his last name correct, put up a sign on the News Stand cafe the weekend of Memorial Day: "Thanks to all our customers. Gone racing." Or words to that effect. I know I have "gone racing" correct.
What I heard from a friend who had a grandson who worked there: there were three or four partners originally. By the time the news stand closed, sob, there were two. They had a disagreement about how to run things, etc., and they called it quits.
Hence the sign from Matt...
I heard the gyros place wanted the space, but that has not happened, or won't happen. So perhaps another tenant, soon?
Life goes on...la te da...how the life goes on...

2010-08-04 21:28:55

ruthholl [Member] said:

Hendy, I think you are correct. Financial indigestion, indeed. When this project was first proposed, the markets were very different. It was an ambitious project. But the markets collapsed, and his timing was always off.
So it goes.
Or "the life goes on..." as said earlier...

2010-08-04 21:31:25

Write Man [Member] said:

Hey...thanks for the update. Re: for or against? I'm fine with a slower speed, but don't want to see "medians up and down Meridian" as some neighbors overcome with the vapors feared. Positive speed control sounds nice. A smiling face makes a speeding ticket a bit more palatable.

I think we have to make a bigger decision about what we want out of Meridian Street. Do we want the Meridian Street that you drive *along*, appreciate the trees and homes and scenery...or do we want an access artery to the north side that we hurry along on our way to highways that hurry us somewhere else? Both have their places I suppose, but I think we lose more than we gain if we make Meridian little more than an artery to the faceless 'burbs. We need all the "sense of place" we can muster (or retain/maintain).

Cheers...

2010-08-05 05:09:52

hendy [Member] said:

It's nice to have character, but there are deeper needs than slowing down to laud the expensive homes on Meridian. People on Meridian knew it was US 31, then a major artery. They don't have to worry about kids playing in the streets, there are lots of stone walls and gates to prevent that.

We have big traffic problems because we don't have a decent N-S freeway in Indy, and we have the White River, which we're too cheap to build bridges across. Then we have the oxymoron of CIty Planning, and the white-flight problem. Meridian? Barriers? Do we really have an aristocracy in Indy?

2010-08-05 08:09:30

Ms. Cynical [unverified] said:

Once upon a time that corner was the location of the Junior League's Next-to-New thrift shop. It was a scary place to work then, and -- even though I seem to recall that there was a police substation nearby -- it seems as though it hasn't improved!

2010-08-05 09:05:42

MK homeowner [unverified] said:

Ruth - I am so glad you covered this neighborhood issue. From the start, the project was too ambitious. And, too much was paid for the properties right from the get-go (this was BEFORE before the real estate market collapsed) Additionally IMO there are some in neighborhood leadership positions who did little if nothing to educate themselves about the project particulars - especially the financing piece and how under Leif's proposal(s) others than Leif would bear most of the risks. They drank the koolade and bought into the concept without understanding crucial details. Moreover, they encouraged Leif to continue to move forward regardless of the realities. Those who asked questions or expressed concerns were told to be quiet and ignored.

2010-08-05 09:50:25

MK homeowner [unverified] said:

looks like Leif didn't like your column. Look at that nonsensical verbage (and, is "assemblage" even a word?)

2010-08-05 20:16:19

herman [unverified] said:

If a city is going to survive and prosper in the 21st Century, it's going to have to attract highly educated recent college graduates, and, so the city was told at a recent Chamber symposium (mostly sponsored by Harmoni) to accomplish that, the city has to build its downtown, because that's where the target audience wants to live. That's no small factor in why this project isn't a high priority for the city - the others have been well discussed here and at IBJ. Projects in MK are going to have to make it on their own merits. You want a TIFF? Fine, the city would happily TIFF the block, and throw in some infrastructure, as it did for Glendale, but that's about it. When that target group ages a bit, perhaps has a family, they'll move to MK and that creates the demographics for retail to survive on its own, as we already see across the street and along the rest of College.

2010-08-07 08:23:45

Herman [unverified] said:

PS - the deal the City worked out with Harmoni on the north Meridian improvements is probably worth its own Column, because it's a great example of compromise. If you start with what Harmoni originally wanted - a multi-million dollar project with statues, spiffy lighting and planter boxes and what the City originally offered a few years back - fine you go pay for it - what recently got worked out is darned impressive and lets both come away looking good.

2010-08-07 08:42:36

Dave [unverified] said:

It's fair to criticize, but it's important to consider the contributions this visionary fellow has made within the community; including redevelopment of the two-story brick building at the SW corner of College & 49th Street, The Uptown Center.

Ambition & vision are crimes. Hinterberger's renovation of the SW corner has been nothing short of catalytic; spurning high quality, much needed, adjacent redevelopment.

Mr. Hinterberger is a passionate visionary of the "tough love" variety, perhaps owing to the inflexibility of single-mindedness; characteristic of folks who do vs. those who only talk about doing. Hinterberger did after all, put his money & irreplaceable time, where his mouth is.

This is not to say that government should be in any business other than the protection of citizens (a much smaller jean size than that which disgraces the waste-line of "modern government"). Rather, it's important to catch people doing things "right" or in this case, boldly, doing and attempting- improvement!

I'll raise a cup to Mr. Hinterberger & his future; that his vision finds free market success. I also wish to thank him, for his inspired, tireless effort. Reconsider (funding philosophy, etc.) reflect, retool, but don't give up.


2010-08-07 11:10:28

Dave [unverified] said:

Sorry folks, that 2nd graph, 1st sentence should read:

Ambition & vision are not crimes...

2010-08-07 11:13:48

Roberta X [unverified] said:

H'mm, sorrowful reading -- I have commuted past the Uptown for years and my vet's been there for the last several. I was hoping to see more than has happened.

As for Steck's, I miss them. They could handle the elderly plumbing around here. (But their parts supplier still survives!) I'll be glad to see another business start up in their old space.

Northside News: word was they got dropped by their periodicals distributor, too. It sure looked like that had hurt business.

2010-08-07 18:34:34

Tell The Truth [Member] said:

Contributions to the neighborhood? WJHAT contributions? Pipe dreams do not a contribution make

In fact, raising someone's hopes, falsely, does more long-term damage. It now serves as an anchor corner that "couldn't work" in the public's eye.

It would've worked. With a smart developer, a project that fit the area, and more common sense.

I've helped developers find financing for almost three decades, tough times and good. The economic times have never been tougher. But the trail of broken dreams and half=[promises left by this developer is a mile long. Ask area bankers. They all know him He's just one step removed from the developer who wants to revive the Penn Arts Building at 16th/Penn.

Always yapping. Rarely performing.

Step aside, Leif.

I miss the Newsstand. I love good magazines, and like to vary my weekly/ monthly intake, so annual subscriptions are, well, a waste of time for me. I spent plenty there. That whole business is undergoing massive changes nationally. Sad. Those guys were extremely friendly and helpful.



2010-08-07 22:05:47

ruthholl [Member] said:

I am so glad TTT finally weighed in, because I know you've been around this block -- figuratively, literally.
Your comments and insights are invaluable.
And to Dave: I so agree that ambition and vision are not crimes. I was solidly in Leif's corner, even before meeting him; I so wanted to see him succeed. I also urged a few naysayers to call the guy up, get the facts straight, all that.
But after sitting down with him at Carreau Design in Broad Ripple -- his office -- three times, and numerous phone conversations, and volumes of material he kindly sent my way, I began to get the idea that all he had was vision (and anger, at various officials or perceived antagonists). In the end, he was all talk and no walk. I hate to say that, because I am all about seeing someone make his dreams come true, and that was in my view a solid dream for that corner: loved the idea of mixed income, retail, altho he needed to scale down (which he has).
Also, yes, he pulled off the project across the way, altho I've heard the rents are too high there for human consumption, and there was a robbery that freaked out tenants.
Not his fault, of course.
But -- but but but -- if only he had delivered: cut the grass, (it now is, by the way), maintained the existing homes, utilized those for the time being, been more forthcoming with answers and less desirous of protecting his agenda...well, whatever.
Maybe he will rise again; we all love comebacks. I wish the guy well, and as I said, this has been a teachable moment. May we all learn.
TTT, I missed you!!!!

2010-08-08 10:37:06

Dave [unverified] said:

TTT: Hinterberger's renovation of the Uptown Center was not a pipe dream or merely yapping, it's something he did.

In ways, we're saying similar things. I'm aware of some points made by R & TTT.

Like many of you, I met with Mr. HInterberger many times & share some of your concerns. Some of you probably handled pieces of the development mosaic which I now view at some distance.

Frustrating, disappointing? Yep, I get that, but all is not lost.

Again, whatever tuning the vision needs, Mr. Hinterberger correctly identified & focused upon 49/ College as community hub or commercial epicenter.
While progress is currently stalled, it's likely further along in many respects than it otherwise might be.

Approximately 3/4 or 75% of that intersection or commercial quadrangle has been upgraded or improved & in some part due to the efforts of Mr. Hinterberger.

Agree / disagree, like him or not, it can be said that Lief Hinterberger did invest significant time & money in his vision, from which the community has already & will likely, benefit.

2010-08-08 11:40:55

hendy [Member] said:

Go down a few blocks to 49th and Penn. The neighborhood economics support what's been transformed there-- including another Linders!

I've lived near 42nd and College and 46th and Central, years ago. It's been a changing neighborhood for a long time. Getting the financing for that area takes the actual demographics to support the change. They're not there.

Worse: banks aren't lending, even to those with 800+ credit scores. They're worried, and with good cause, about their portfolios. No one's going out on a limb. Lacking private funding, which demands much higher than market usury.

Dreams, like ideas, are cheap currency-- everyone has some. Taking them through fruition takes networking, and the reality of finance. Lacking those, they don't come true. We all like to buy low and sell high. But getting high before you buy something hoping to make a buck often doesn't meet the test of reality.

2010-08-08 20:09:24

Tell The Truth [Member] said:

Banks are lending, Hendy. To folks with 660-plus scores. But they're lending 40-70% of a project's cost. Not 90-100%, as it was just a few short years ago.

And there are other components of a commercial loan these days: non-recourse loans are gone. Ask George Broadbent. Or the folks at many other retail developers. And with 18-20% vacancy rates, office developers are having to pre-lease 80-90% of a building...unheard-of five years ago. Sid Escanaski or Herb Simon can get non-recourse loans, but they're worth hundreds of millions (or more) and have four decades of experience behind them. That's borrower muscle that Leif doesn't have.

The demographics at this corner are only slightly worse than Penn. The area that pulls both areas slightly down, is roughly the same: south and east.

Something will work at this corner. Alas, I fear it is a small strip center with a few shops, as the redeveloped drug store corner on Penn or the Aristocat corner or 54th/College...the new grocery at 54th/College is successful but it had an Atlas customer base of 40-plus years to build on.

If Ik were a visionary with a decent 60-70% loan, I MIGHT advocate apartments above a small strip center, but it'd be a huge risk.

'Twas the annual family vacation, Ruthie...15 folks seaside, lots of "relative humidity," and enough material for a book....but it was a little relaxing.

2010-08-09 05:48:12

Tell The Truth [Member] said:

Damn I spelled Sid's name wrong again.. But, that's the nicest thing I can say about him, so I'll let it go.

2010-08-09 05:49:47

Wordpress Themes [unverified] said:

Nice dispatch and this enter helped me alot in my college assignement. Say thank you you for your information.

2010-08-09 21:46:09

Tell The Truth [Member] said:

(Sigh) Wordpress. Holly Arpan, Gretchen Kemp, Ms. Benedict and Strunk and White weep.

2010-08-10 06:44:52

Homer [Member] said:

Leif is his own worst enemy. Visionaries often need friendly, accessible folks to explain the ideas and respond to criticism. Leif has never understood this.

2010-08-16 15:43:26

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