INDIANAPOLIS — When last we spoke to Lafayette Square Mall developer Fabio de la Cruz of Sojos Capital, he was confident the price tag for his plan to renovate the fifty-year-old building, construct a boutique hotel and entertainment venue and build hundreds of residential units would be $200 million.
Now, according to our newsgathering partners at the IBJ, the budget for the developers has exploded.
“Certainly the interest rates and the rise in construction costs are going to be a hurdle for this project no matter where they end up with total investment costs,” said the IBJ’s Mickey Shuey who only recently landed an interview with de la Cruz. “They’re saying it could be up to a billion dollars now of investment on this site.”
Shuey said de la Cruz has even bigger plans in sight for the all-but-abandoned corner of W. 38th Street and Lafayette Road.
“They want to build bigger, better, and really bring in more development partners for this project,” said Shuey. “They’re seeing these plans come together and they’re like, ‘We think we can do this better than what we have planned right now, so, we’re gonna go back to the drawing board and figure out exactly what that looks like, how much its gonna cost and what its gonna take to get this over the finish line in a bigger and better way than what we had’.”
The developer told the IBJ that interior HVAC and electrical work has been completed even though his timetable to have displaced merchants move back in four months ago has passed.
“He actually confirmed to me that work inside the building is all but stopped at this point while they go through these design processes,” said Shuey. “They plan on finalizing the master plan by the end of this year, he said, and making that public and at that point they’re gonna start reaching out to tenants and prospective tenants anyway to try and entice them to come to the property. He said it would at least be six months from the time those plans are finalized and revealed for when they can reopen the mall, so it’s going to be at least mid-2024 before they get the mall back open.”
In February of 2022, de la Cruz told FOX59/CBS4 that he planned to be welcoming tenants and building the hotel and apartments by now, but he was also open to imagining a grander vision for the site.
“Every time that I talk about this project I circle it three times. The big project will be the whole neighborhood. The second will be the land where the mall is because it is 20 acres and the mall itself that is around 20 acres,” he said. “This is gonna be open. This is not gonna be in the next 10 years. This is gonna be in the next year, year-and-a-half, you gonna see a lot of changes in this neighborhood.”
Change is coming slowly to the mall property, though, de la Cruz issued a statement today that promised, “The development of our neighborhood project has grown immensely. As such, we are adjusting to carefully develop the new vision. We have creatively and strategically rethought the use of the area to develop a neighborhood that retains its authenticity while attracting others to live, work, play and stay. As soon as the new master plan is finished, we will share details with the public.”
Construction demands, supply pipeline delays and increased lending costs may all be playing a role in the developer’s slowed timetable though de la Cruz said in the winter of 2022 when his budget was $200 million that, “We don’t have financing. It’s all cash.”
Sojos Capital has not yet sought financial support from the City or tax breaks for the development, though those requests may come once the final plans are revealed.
“I know they’ve signed on with a couple of partners already,” said Shuey. “They won’t disclose who those partners are but right now construction inside the mall itself is stalled because they’re going back to the drawing board on design plans.”