Kite expects to secure financing for Pan Am Plaza project by end of year
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Indianapolis-based developer Kite Realty Group Trust said this week it expects to shore up financing for its proposed $550 million hotel and convention center expansion project on Pan Am Plaza by the end of this year.
The company, which largely specializes in shopping centers, said through a spokesman it remains committed to the project, which it has been involved with since 2018. The development calls for a $120 million expansion of the Indiana Convention Center, along with an upscale 40-story, 800-room hotel with the Signia by Hilton flag—both of which are expected to be completed by early 2026.
Kite and Capital Improvement Board of Marion County officials said while current market conditions for major real estate projects have been challenging, they’re on track to meet a deadline to finish all pre-construction and financing work by the end of 2022. That requirement is part of a project agreement signed in early 2021 that specified each party’s responsibilities.
There are no plans to alter the development’s scope from the current plans last updated in 2020—which include a later phase that would add a 600-room hotel adjacent to the Signia.
“The project is moving forward, and while rising construction costs have posed a challenge, the team is on course to secure financing by the end of the year,” Bryan McCarthy, Kite senior vice president of corporate marketing and communications, said in written remarks. “The plans for the Indiana Convention Center expansion and Signia by Hilton branded hotel have not deviated from the shared designs. We look forward to helping create a landmark development for the City of Indianapolis.”
Tom McGowan, chief operating officer for Kite, also previously told IBJ the pieces for the project should be in place by the end of the year.
Andy Mallon, executive director of the CIB, said the hotel and convention center addition should open in early 2026, “assuming we keep the current pace.” Multiple major conventions have committed to the city with a contingency the project is completed in time for their events. Those conventions include the American Dental Association and Gen Con.
Some underground construction work could begin as early as this autumn following the completion of the NBA 2K League’s season-long stint at Pan Am Pavilion, which will be demolished as part of the convention center expansion plan. However, a date for a ceremonial groundbreaking has not been set.
Mallon said design documents for the project are being completed in phases. The CIB and Kite did provide several new and updated renderings of the project to IBJ. Ratio Architects is the design firm on the project.
The renderings include a first look at the convention center’s main ballroom and the hotel’s guest suites, and updated designs for lounges, bars and dining areas at the hotel.
Another rendering shows the full scope of the development, including the second-phase hotel and a third tower on the northeast corner of Capitol Avenue and West Louisiana Street. Kite’s McCarthy said the tower is a “potential future development opportunity,” but declined to elaborate.
Efforts to mitigate any cost overruns for the project are also ongoing, Mallon said, particularly as inflation continues to hamper development projects in Indianapolis and beyond.
“Cost volatility is a challenge on all construction projects right now,” he said in emailed responses to questions from IBJ. “We are working in real time with the designers, contractors, Kite and the Signia by Hilton design team to address these and other challenges. Optimizing the program, design details, and constructibility of the project to mitigate cost escalation is a high priority.”
In a statement, a city spokesperson said work is continuing behind the scenes to ensure the project moves forward effectively.
“Despite all the challenges with construction costs and supply chain issues as we emerge from the pandemic, the schedule for closing, construction, and completion of the project remain on track,” said Mark Bode, director of communications for Mayor Joe Hogsett. “Over the last year, City, CIB, and Kite have been working diligently on construction and operating agreements, as well as financing matters and have made tremendous progress on the design of the hotel and ballrooms. They have also been working closely with Hilton on Signia design elements and operations.”