Old City Hall hotel developers ask Indianapolis for $66 million bond

INDIANAPOLIS — The renovation of Old City Hall and the addition of a 29-story hotel tower was announced with fanfare by Indianapolis city leaders in August 2023. The site has remained untouched 18 months later and the developers are hoping to borrow money before they break ground.

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Developers TWG asked Indianapolis for a $66 million bond due to rising construction costs. The company would have to repay the bond over a decade if is approved by the City-County Council.

The bond proposal moved through the Metropolitan Development Commission on Wednesday and will come before the City-County Council next month.

The budget for the Old City Hall rehabilitation was originally $140 million when it was unveiled. It rose to $264 million by last summer.

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"It is a large residential tower, which is pretty costly in and of itself, but then you on top of you that you have a historic structure," said Indianapolis Department of Metropolitan Development director Megan Vukusich. "We are also seeing additional cost increases in the construction market and high interest rates."

Vukusich said TWG could break ground on the project this summer if the $66 million bond is approved. She said it is now estimated to open in the summer 2028.

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The development is across the street from Commissary Barber & Barista. Employees of the coffee shop said it could benefit when the hotel and residences finally open.

"There might be a lot more foot traffic and a lot more people stumbling in because they're having food or going to a restaurant," said Tyler Niehaus of Commissary Barber & Barista.

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Old City Hall is located at the corner of Ohio and Alabama Streets. The building was constructed in 1910 and has been vacant since the Indianapolis Public Library moved out in 2007.

The hotel, apartment, and condominium tower would rise on an adjacent parking lot on the corner of New York and Alabama Streets.