Don’t sleep on Naptown.
Indianapolis was once known for its quiet evenings and small-town aura in a big city, hence the city’s nickname—Naptown. While it was once considered an insult, today the nickname “Naptown” has reclaimed some of it’s original flare (the name originated from the 1920’s jazz “Naptown sound”), as the city has transformed from what critics called a sleepy city into a lively cultural center.
Some of these transformations are happening in the oddest of places: Indianapolis is currently developing Central State, a mixed-use village on the lands of the decommissioned Central State Hospital for psychiatric treatment.
Central State presented massive challenges for developers. There was little access to roads, water and sewage. The land was covered in old and ominous patient dormitories, gymnasiums and treatment facilities. And, under the surface, there were tunnels connecting these buildings. Some citizens even feared the area to be haunted.
Yet, Indianapolis saw an opportunity. Central State was nearly 150-acres of unused land minutes away from downtown. So the city bought the property from the state of Indiana, resold it to a private joint venture and tasked the Department of Metropolitan Development (DMD) with assembling a public-private partnership to create a masterplan for Central State’s development.
Indianapolis continues to employ a mixture of local, state and federal financial tools to develop and incentivize investment in Central State.
The city is empowering investment here by increasing the public infrastructure—like roads and other amenities—presence through Section 108 loans from the City-County Council that will be paid back through the tax-increment financing (TIF) district around Central State. The TIF—when combined with other tools—has resulted in a diverse set of housing options, ranging from single-family homes to senior and mixed-income apartments. The Steeples is a 144-unit, mixed-income apartment complex in the south-east corner of Center State. The $20 million project was funded through a state low-income housing tax credit (LIHTC), while the Retreat—a 62-unit senior apartment complex—was funded by city HOME funds along side an LIHTC. However, the examples are only a sign of what is to come to Central State, especially since it is accompanied by recreational, public services and commercial development.
The masterplan lays out plenty of greenspace for Central State and surrounding neighborhood residents. There is already a track and field—financed through a combination of CDBG, Indianapolis’s parks department and the National Football League grants—in the south-west and a park in the north-east corner. And, in the center of Central State, developers plan to turn the 6-acre wooded area into the Grove, a recreational hub to connect trails throughout the neighborhood.
To accompany these public greenspaces with more amenities, Indianapolis donated land to the Christel House Academy, a non-profit public charter school, to support the $14 million campus’s creation at Central State. DMD has dedicated land in the north-west corner to the Indianapolis Metropolitan Police Department’s (IMPD) Mounted Patrol Unit. This unit needed a location with roughly 30-acres and quick access to downtown, and Central State fit the bill, ensuring a public safety presence in the area.
Together, these assets at Central State have resulted in an increased investment from the commercial sector, with several businesses moving onto the property. However, development has not come completely at the expense of the historical remnants of the old hospital: several of the buildings are being preserved and repurposed for modern use. From businesses like Central State Brewing, Ignition Arts and United States of Indiana to local venues like Indiana’s Medical History Museum and the 1899 community center as well as student housing in the Mansion, Central State’s old hospital buildings are benefitting from the development of this area.
The buildings that now host the Mansion, 1899, Ignition Arts, United States of Indiana and People for Urban progress were once part of the hospital, but they were preserved by state historic tax credits and property tax abatement. Central State Brewery, however, will refurbish an old building through a CDBG award from the city.
Nonetheless, Central State remains a work in progress, and Indianapolis is only getting started. Now that the area is in an Opportunity Zone, new investment is right around the corner. In the coming years, they hope to repurpose the old powerplant and bring even more housing and business onto the property. For now, Indianapolis is wide awake, leading the way on combining financial tools to promote develop in the most interesting of places.
The opportunity zone program was created under the 2017 Tax Cuts and Jobs Act to provide local and national investors with a tax incentive for investments in economically distressed areas of the country. More than 8,700 opportunity zones have been designated across all 50 states for the next 10 years. For more information on Opportunity Zones, visit the National League of Cities resource page here.
About the Author: Zachary Gossett is the Federal Advocacy Intern at the National League of Cities and Butler University student in Indianapolis, Indiana.