INDIANAPOLIS — Downtown Indy is bouncing back from the twin 2020 disasters of the COVID-19 pandemic and civil unrest that left behind millions of dollars in property damage, according to the 2023 State of Downtown report issued by Downtown Indy, Inc.
The study predicts a slow steady rebound for Downtown even though thousands of workers have never returned to their former offices and those spaces remain empty.
The DII report lists an office vacancy rate of 9.4%.
Downtown office visits have been pegged at 14 million since the first of the year, a 25% increase over last year but still down significantly from 2019 figures.
A cell phone usage survey from last spring that measured activity north of Washington Street found downtown experienced 40% activity compared to before the pandemic.
To compensate for the downtown workers and office space that may never reach pre-2020 levels, the Hogsett administration and DII, along with developers, have shifted their focus to attract more Hoosiers to call the Mile Square their home.
29,000 residents live in the downtown area while 3,000 apartments have come online in the last 5 years and hundreds of new apartments are in the planning or construction phase.
20 projects are under construction this year, 24 are proposed and $9 billion in development, including the Pan Am Plaza Hotel and Convention Center expansion and the renovation of Old City Hall and construction of a neighboring boutique hotel, are in the pipeline.
Tourism and visitors continue to lead the revival of Downtown’s economy, a development that comic store owner Doug Stephenson has witnessed from his shop just off Monument Circle on Market Street.
”We’re actually a little bit above where we were pre-pandemic in sales in this store specifically,” he said. ”Our business has shifted completely. It used to be everybody who worked in the towers would come down here on Wednesday and pick up their new comics. I have a subscription service. That all went away obviously. So we’re not getting any business from the business district, or I wasn’t, but for the business in all of the out of town traffic, my business shifted from Wednesday to Thursday through Sunday with all of the conventions and conferences.”
Stephenson said he was originally skeptical about the wisdom of shutting down the southwest quadrant of the Circle for the Spark pedestrian mall but has since seen the value of a plaza free from vehicular traffic in the heart of the city.
”It seems like they’re trying to gear the west half of the Circle to that of a European-type plaza,” he said. “In downtown, I would say there’s definitely a lot of upward movement in everybody’s thoughts on where we’re headed.”
The south side of downtown is finally receiving some long overdue investment with the construction of an apartment complex on South Meridian Street, new restaurants coming to the Bar District and development of the Indy 11 soccer stadium, retail, entertainment and residential park at the former Diamond Chain plant at West Street and Kentucky Avenue.
”Clearly the foot traffic is being moved more to the south side of downtown rather than the business district up here or the northern half of the Mile Square,” said Stephenson. ”The challenge is getting the business district back up to a semblance of what it once was. You see we just don’t have the foot traffic back up here in the business district unless it’s spillover from the Wholesale District and tourism.”
The future of Downtown, and of DII, may hinge on the introduction and passage of a proposed Economic Enhancement District to tax Mile Square property owners to support DII and its projects and maintenance duties, other enhancements and ongoing funding of the anticipated Housing Hub to provide services and shelter to Indianapolis’ homeless community.
”If we can get the low barrier shelter working and running and get some of the street people that have obviously some of the mental and addiction issues going on, get that working and running so we can take care of that problem, I think that’s a huge step in the right direction,” said Stephenson.
City-County Council President Vop Osili is currently reaching out to downtown residents and property owners to seek feedback on the anticipated introduction of the EED following the November elections.
The Council may face an end-of-year deadline to approve the District lest the General Assembly revoke its enabling legislation in the coming session.
Saturday afternoon DII will host its inaugural DNA event at Spark to welcome and network with downtown residents.