Indianapolis – The Board of the City Market indicated Friday morning that it may need a bailout not to exceed $100,000 to balance its books for 2021.
Board Treasurer and City Controller Ken Clark said the City of Indianapolis was likely to approve such a loan request from the Board after already writing off $410,000 from an overdue loan dating back to 2007 of which the City of Indianapolis and the City Market apparently lost track.
The request, should it be forthcoming, would be significantly less than the potential quarter-million dollars in red ink that was predicted by the Board’s Finance Committee Chairman Greg Henneke in May.
During a Friday morning meeting, Henneke said that while City Market loses an average of $35,000 to $40,000 a month, he attributed the smaller than expected deficit to improved management of expenses by Executive Director Keisha Gray and an uptick in foot traffic.
While appearing before the City-County Council’s Metropolitan and Economic Development Committee earlier this month, Gray made no mention of the anticipated deficit and bailout request, which had been known for three months.
“A lot of the media has predicted that we would have been insolvent by now but we’re still open and running and business as usual,” Gray told the councilors who, for the most part, did not press her on the lack of a strategic plan for the Market going into 2022 or the particulars of the Market’s budget request.
City Market proposed a spending plan next year of $894,000, 79% of which is personnel, utilities, insurance and rentals.
The Market’s anticipated revenues are $849,000, almost one-third of which are provided by a city subsidy and another 62% by tenant rent payments.
The City of Indianapolis also spends $115,000 annually on City Market maintenance.
More than a third of the 28 vendor spaces on the Market’s main floor are vacant with another tenant rumored to be leaving within the month while three tenants left early this year after paying their full obligations.
Gray told the Board that 12 vendors are current on their rent, two have accepted an offer to defer 50% of their monthly lease costs while five have agreed to cap their rents at ten percent of their gross sales.
John Mavrikis, owner of Grecian Garden, a 19-year mainstay of the Market, told the Board he was mystified by its members’ claims that foot traffic is picking back up at the downtown marketplace.
“One business after another is falling,” he said, citing the deteriorating condition of the Market’s exterior and plazas in the wake of the construction shutdown of East Market Street in front of the City County Building. “It looks like crap. “I wouldn’t come there to eat.”
Despite discussions that have taken place since last spring, the Board admitted it was in no position to articulate a strategic vision for the Market for either next year or the years to come as it was still in the early stages of contemplating raising funds to pay for a yet-to-be-named consultant to guide its Strategic Planning Committee.
The Board and Gray have said their attempts to identify a vision for the City Market are stalled while awaiting a different consultant’s report on the structural and operational status of the Market.
“The Market is not like any other market in the city,” said Clark who noted that such a strategic plan was not required but, “essential.”
Board Member and Marion County Recorder Kate Sweeney Bell said that any previous strategic plan was “not viable” due to the impact of the COVID-19 pandemic.
The Market also finds itself approaching a crossroads as several municipal government functions and offices, along with public and private employees and other potential customers, are set to relocate from downtown Indianapolis to the new Community Justice Center in the Twin Aire neighborhood over the course of the next year.
Henneke said the goal of the strategic study was to make the Market successful and reduce its need for an annual City subsidy, as well as yearly budget bailouts, and position the City Market as the, “lynchpin of the East Market District.”
The Market Board would need to seek out private or foundation donations to pay for such a study though it promised an update with a potential consultant at its October meeting.
Bell said the commitment to development of a strategic plan indicates “actual movement” by the Board and she anticipates that such a study will be, “monumental to the success of the City Market.”
Mavrikis disagreed. “While you’re figuring it out, we’re losing our businesses,” he told the Board, impatient for a potential long-range solution that may not be identified until well into 2022 without a discernible plan for the remainder of this year. “I don’t understand why there’s not a plan.” “I’ve listened to this for years and years and years. It’s a lot of rhetoric.”
Mavrikis said he signed his first five-year lease with five-year options in 2002, but has been unsuccessful in negotiating another five-year lease after his current term expires in 2022 while he is attempting to borrow $70,000 to update his location.
“You’re not working willing to work with us,” he said, claiming the Board and the Market management have refused to consider his offer to sign another long-term engagement. “How can a business make decisions on a two-year lease?”
Board Chairman Michael Solari countered, “everything’s on the table,” though Board members indicated that the lack of a strategic plan has tied their hands on predicting the future viability of the Market’s current predominantly food court configuration.
Board Member and former City Controller Jason Dudich said that for the strategic plan to address the Market’s future for a “twenty-to-fifty year vision of success,” it will take the Board six-to-twelve months to develop that plan and that was why it was not appropriate for the Board to consider long term leases for vendors.
“You don’t have a strategic plan,” said Mavrikis, noting the lack of an identifiable list of priorities and action items beyond the likely budget bailout request.
Executive Director Gray did not repeat for the Board comments she made to city-county councilors on August 16th that longer vendor hours and the potential addition of more special events were among changes she was instituting or anticipated in the coming months, though she said she expects two new vendors to locate in the Market in the months to come.
Staff indicated to the Board that the Market’s age and food preparation model are challenges to its physical and operational success and solutions and, “are still being figured out.”
Clark said that the should an engineer’s assessment, due next month, recommend renovation of the 145-year-old Market, the City would be, “open to discussion.”
The date of the Board’s next meeting in October when some of these issues could presumably be resolved was not announced.