Indianapolis signs off on hotel financing

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The Indianapolis City-County Council unanimously approved plans to issue $16.7 million in bond anticipation notes to help finance a $141 million plan to redevelop two historic downtown Indianapolis buildings.

The city anticipates issuing about $17.5 million in developer-backed bonds to help finance the project. Keystone Realty Group is the developer.


Keystone is seeking the money and the city’s partnership as part of a $141 million redevelopment plan for the Illinois Building at 17 West Market Street and the former AT&T building at 220 North Meridian Street. Keystone plans a 180-room Intercontinental Hotel in the Illinois Building and a mixed-use high rise office and residential building at the former AT&T office building.

The developer would use 80% of the tax revenue generated by the projects to pay off the bonds, which last for a period of 25 years. The projects are both in the consolidated downtown tax-increment financing district.

In return for its financing help, the city is getting a 5% equity stake in the Intercontinental Hotel, a similar arrangement to what it has at both the Conrad Hotel and the JW Marriott.

Cost of the Intercontinental project is estimated at $61 million and at $80 million for the redevelopment of the former AT&T building.

The Illinois Building currently generates about $420,000 per year in tax revenue, largely from ground floor restaurants.

The former AT&T building generates about $120,000 per year for the city in tax revenue. The city anticipates receiving an additional $341,000 in annual taxes from the buildings once the projects are completed.

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Tax increment financing district City of Indianapolis, IN Indiana
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