Commercial Real Estate

Mayor Drives the Remaking of an Indiana City

Redevelopment of Carmel, Ind., Has a European FlairJULY 1, 2014

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The Palladium in Carmel, Ind., is intended as a 21st-century version of Carnegie Hall and is part of the city’s Center for the Performing Arts. Credit A. J. Mast for The New York Times Continue reading the main story Continue reading the main story <a href="http://bs.serving-sys.com/BurstingPipe/adServer.bs?cn=brd&FlightID=9764232&Page=&PluID=0&Pos=1157178465" target="_blank"><img src="http://bs.serving-sys.com/BurstingPipe/adServer.bs?

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Square Feet

By KEITH SCHNEIDER

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CARMEL, Ind. — In 20 years, this city has undergone a substantial overhaul, and its longtime mayor has presided over every stage of its development.

The plans began in 1994, when this prosperous suburb just north of Indianapolis invited its 31,000 residents to consider ideas to redevelop Carmel’s downtown, parts of which date to its founding in 1837.

The next year, James Brainard, a Republican, was elected to the first of his five terms in office, running on a platform that included putting the development plan for the original downtown, now known as the Arts and Design District, into effect.

Now, Carmel is a city of 85,000 transformed by a strategy unique in Indiana and the Midwest. It emphasizes:

■ Recruitment for high-wage jobs in a district of contemporary glass and steel buildings along Meridian Street on the city’s west side that houses over 40 corporate headquarters.

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■ Construction of office, residential and entertainment venues in two central city districts that invite sidewalk dining and strolling.

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James Brainard, inside the Palladium. He was first elected mayor in 1995. Credit A. J. Mast for The New York Times

■ Replacement of more than 80 intersections with roundabouts, to keep vehicles moving and reduce traffic congestion.

The Arts and Design District set the stage for much of Carmel’s development over the last decade. Since 2005, just over $70 million has been invested by the city and private developers in nearly 300 new residences and dozens of new businesses that encompass almost 900,000 square feet of renovations and new construction, according to city records.

The district is anchored by the $25 million, 156,000-square-foot Indiana Design Center developed by Pedcor Companies, a real estate development and investment firm with headquarters in Carmel. The center, which opened in 2010, features interior design stores and the offices of professional decorators. The city also approved over 200 new residential units in several luxury loft and apartment buildings, and two 16,960-square-foot retail buildings for shops and restaurants, built at a cost of $5.25 million.

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This has resulted in an active retailing and dining district reachable on foot and bicycle that swarms with visitors, especially on weekends. It has attracted attention from executives of companies that Carmel is recruiting to the Meridian corridor.

One such executive is George T. DeVries, co-founder and chief executive of American Specialty Health, a privately held health services organization with $260 million in annual sales and 1,200 employees. This year he is moving his company’s headquarters from San Diego to 73,000 square feet of leased space in a new office building in the Meridian corridor.

Mr. DeVries was born in Iowa and attended Culver Military Academy in Indiana, a college prep boarding school.

“It makes immense sense for the logic and evolution of our company,” he said about the move. “Our business costs in Carmel are lower. Our employees like the move. Carmel has done a good job with its redevelopment. It’s a good place to live. Our employees are able to afford homes close to our new office, something they can’t do now.”

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Buoyed by local support for the arts district, Carmel pursued the second central city redevelopment area, called City Center, which is being constructed in phases. The 80-acre center, like the arts district, is intended to mix residential, office, retail and entertainment spaces in close enough proximity to encourage walking. Parking is beneath, or in decks hidden by office and residential buildings.

City Center’s anchors are the two publicly financed buildings of the Center for the Performing Arts. The larger of the two is a 1,600-seat, $130 million concert hall, the Palladium, a 21st-century version of Carnegie Hall with impressive lighting, temperature controls, acoustic design and tiers of seating. The second building, constructed at a cost of $47.5 million, houses a 500-seat theater, a 150-seat studio theater, offices and a parking deck. Both buildings opened in 2010.

The newest buildings in City Center, according to city records, are Pedcor’s $10 million, 42,000-square-foot residential building with first-floor retail and commercial space, and a $7 million, 40,000-square-foot residential building that also will house the corporate offices of Anderson Birkla, a real estate investment company that is developing the project. Both are expected to be completed by the end of the year.

Almost 800,000 square feet of new construction has been done in City Center, or roughly half of what is planned for development by the end of the decade, Mayor Brainard said. Later phases, he said, will include more residences and a hotel.

In City Center, the narrow streets, wide sidewalks, enclosed walkways, five-story apartments and street-level shops — all design-coordinated in a continental European style — show that Carmel was not at all interested in duplicating the typical one-story strip mall developments of its Indiana neighbors.

On a tour of the city this spring, Mr. Brainard navigated the third element of the city’s redevelopment plan — the roundabouts that replaced intersections with traffic signals and stop signs. Carmel built over 80 roundabouts, he said. One of four Republicans on President Obama’s Task Force on Climate Preparedness and Resilience, Mr. Brainard asserted that they saved 500,000 gallons of fuel and prevent 50,000 pounds of climate-changing emissions annually.

“We want to be a destination for new business,” the mayor said. “So we needed to add some assets. The first is that people ought to be able to find a grocery store, a dry cleaners, a drugstore, a good restaurant within a mile of their home. The second is to build a city that’s easy to get around — where you don’t always need a car — and doesn’t tie you up in endless traffic jams.”

Mr. Brainard neglected to add a third ingredient to the formula for economic transition: Staying in office long enough to see the projects through.

“People in this town support what he’s been doing,” said Bruce A. Cordingley, the 67-year-old president, chief executive and co-founder of the Pedcor Companies.

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Pedcor has invested $150 million in the arts district and City Center, including its $25 million, 80,000-square-foot headquarters next door to the Palladium. “The debate about development over the years has been very active, as it should be.” Mr. Cordingley said. “The mayor’s view has prevailed.”

Still, in a county and state that adheres to principles of small government and fiscal austerity, Mr. Brainard’s approach occasionally invites criticism. Carmel’s 31 special taxing districts generate $20 million annually to service $294 million in public debt and $24 million in private debt from the arts district and City Center.

In the May 2011 primary, Mr. Brainard encountered an opponent, John Accetturo, then a city councilman, who campaigned on a platform that the city’s investment was too large and called for retrenchment.

Mr. Accetturo, though, lost command of his message after he mailed a campaign flier to 10,000 households that featured a portrait of Mayor Brainard alongside those of Muammar el-Qaddafi and Saddam Hussein. “It’s time for him to go,” the mailing suggested.

Mayor Brainard won handily. He is running for a sixth term next year.