Hi, I'm Jeff Rea, your host for Economic Outlook.

Welcome to our program.

We hope you enjoy the show.

Please make plans each week to join us as we discuss the region's most important economic development initiatives with a panel of experts.

Construction could start soon on the Madison Lifestyle District in downtown South Bend.

The $334 million project is the largest mixed use development in downtown history.

We'll sit down with the developer and the city for a deep dive into all you need to know about that project.

Coming up on economic outlook.

Final approvals have been given and construction could begin soon on the new $334 million Madison Lifestyle District in downtown South Bend.

This mixed use development, which could include a hotel, more housing, commercial space and parking structures, will be a nice complement to the major additions and renovation currently happening north of the site at Memorial Hospital.

Today we're diving deeper into those projects and talking about how they will impact South Bend in the decades to come.

Joining me for that conversation and format a little bit different.

First, I have Brad Toothaker.

He's the managing partner at Great Lakes Capital.

And later in the show, Caleb Bauer, the executive director of the department Community Investment.

in the City of South Bend will be joining us.

First.

We'll start with Brad.

Brad, welcome.

Thanks, Jeff.

Glad to be here.

Yeah.

Thank you.

We're really excited to have you back.

It's been a little bit at a time, but we've got a terrific project to talk about today.

We're really excited about Madison Lifestyle District though.

Just quick.

First though, just for a frame of reference, Great Lakes Capital.

If folks don't know who that is, what that does, tell us about Great Lakes Capital.

Sure, sure.

We're locally based and have grown beyond locally based on our projects throughout the Midwest, but we're basically a midwest mid-cap, developer, mostly in the mixed use, residential space.

we also do speculative industrial space, around the Midwest, mostly, Indiana and Michigan for the industrial and but we're as far as Des Moines and and Saint Louis and places like that with, the mixed use projects.

Great.

We're we're thrilled with the many projects you've had involved here, the Madison lifestyle districts, the one that caught our attention.

We want to talk a little bit about today for first is you've had you have a long history of real estate in this area.

Give us more of a high level.

What is it about developed in in downtown South Bend that's attractive to a developer like you or someone else?

Well, density is really what you want to develop in a development area.

And downtown South Bend is one of the more dense markets in the region, obviously.

And and little Incrementals have happened over the last decade or two.

And certainly add into that even the work that Notre Dame's done at Eddy Street Commons, adding to the density, the human density.

And that's where that creates value.

And it creates opportunity to do next projects, new projects as challenging as they are.

You and I were talking about that earlier, and we can talk a little bit more about the economic construct behind New projects and new developments in in urban environments, especially secondary, tertiary, Midwest urban environments.

But really, developers are attracted to people, right?

And you want to build your ecosystem within the context of people that are already there and people that you can attract to create more density and more activity in that space.

Joe Public sometimes says, wait, why do you invest everything downtown and not more out in the neighborhoods?

Speak for a second just to the to the street.

The importance of downtown being strong.

Why is that so essential to a community?

Well, it's a core of the community.

And you'll see that in Elkhart.

You'll see that Mishawaka.

And that's where a lot of the focus was, as you know, going way back in your role.

and that's the it's the heart of the community.

You want the heart of the community to be strong.

And downtowns are expected to be an urban environment in a dense environment.

And so it's a natural affinity, but it also works that way.

Neighborhood development is totally different.

It's a different expertise and a different thing that occurs as the downtowns become stronger and and the geographies between the downtowns fill in.

Great.

So as we talk about the north side of downtown, which we're the landscape is going to change significantly in the coming years.

Beacon has obviously announced a major patient tower and some improvements to the hospital.

And then more recently, the discussion on Madison.

So give us the kind of high level what's what's happening in and around Madison lifestyle district and the hospital area.

Sure, sure.

Yeah.

We've been poking around downtown for quite some time with different users and different anchors, and it really came to this site.

that seemed to make so much sense.

In partnership with the City of South Bend, with the READI Grant, and Beacon, putting their making available this land to develop on and, and partnering in that way with, with this project so that we have a large enough development area to create the concentration that we are really it'll be a two parking garages or one large one that will span the course of two blocks central to those two blocks, wrapping units, residential units, hotel units around that.

But much like the Eddy Street Commons complex, where you don't really even see the parking garage, you just sneak in from the sides and but but the exterior is really residential and and creates that fit and feel and a better, more hospital, you know, live and work type environment for downtown.

You know, it's it's pretty exciting.

You mentioned timing.

So projects like this take a while to put the details together.

Give us that perspective.

From a developer's perspective.

You've got to pull a lot of things together.

How long how long are you dreaming about this before the first shovel gets put in the ground?

Yeah, sure.

a project like this without even a public private, partnership complexity which exists here can take 2 to 3 years.

And the planning before you turn in dirt, before you turn the shovel and start going vertical.

and I would say at this point, that's about how long we're into it, hoping to start this late summer fall on the parking garages.

And then it would be late summer fall next year before we would start wrapping the parking garages with, with the vertical structures, the residential and, and the other products that I mentioned.

So let's talk economics for for a second, you mentioned the importance of public private partnership.

But talk talk a little bit, maybe more high level.

First, you know, we've heard a lot about, construction prices and where they are today.

We hear a lot about, interest rates and what's going on with those.

Just talk about the economics of doing deals like that and how that might be different today than it was even a few years ago.

Yeah.

Well, you know, it's always been challenging in, in smaller Midwest markets, secondary tertiary markets, like I mentioned earlier before, I mean, there's always been a gap between what the project costs and then what that translates to rents.

You know, what if someone have to pay for an apartment and will that work in a market like South Bend or Mishawaka.

And, and so you have to size the costs down through incentives that come through the state and the city and, and other research, sometimes national programs like, the, the new market tax credit, I'm sure you've heard of and we've used before and it gets complicated.

and so really, you know, in the past, it was it was probably a 20% downsizing.

It's closer to 30% where you need to really seek the credits or the cost, the site efficiency.

And, and with some of the work that the city's doing and the READI grants and the city's financial participation, it makes it possible.

Otherwise it would it'd be totally impossible economically to be able to afford new product in a in a small town, small market like ours, a secondary tertiary market.

Yeah.

So so downtowns got some some nice momentum or names announced an investment there, the former hospital properties being renovated.

There's a couple of residential projects.

The stadium is getting rebuilt.

Morris so, so there's a lot of residential units.

Talk about just the market in particular.

Obviously, if you've looked at this, you see there's a market for, for the type of uses you're putting there.

speak to that a little bit.

Sure, sure.

Well, and, you know, we're going to deliver two different types of product.

And we know that, you know, pretty much everywhere there's a there's a dearth of residential housing.

And so people are renting or buying whatever really exists as close to what they want as possible, but not necessarily exactly what they want.

But but with Notre Dame's action downtown and what they're doing with what's going on on the west side of town in New Carlisle, would there be more people in and around town with with housing needs and so delivering housing, what will really be close to three years from now?

We think timing will be good.

There'll be businesses in place and and businesses that are ancillary to those businesses.

And so we're really looking to deliver a market rate type housing and then also workforce type housing, which is a little bit more affordable, for your average worker downtown and around the community.

And so it's it's a split offering.

It's it's a differentiation.

And it's and into it's a convenience when, when we have the density with what, what memorial's doing and, and the businesses that are rebuilding in and around downtown.

And again, Notre Dame, to be able to walk across the street and go to work is is a real big deal.

And so where you might be paying a little bit more for rent if you're saving in your commute, commute and, the gas in the car and everything else, speak to, in our last couple of minutes here, speak to Memorial a little bit.

So, you know, I think of just the anchor it's been for 100 plus years.

The fact that they're making a major investment.

Talk about how that influences not only your development, but other development happening in the downtown area.

Well, you know, hospitals are core to communities and draw all sorts of ancillary businesses and not just the hospital in of itself, but the suppliers and, and and certainly their needs, in and around hospitals that, that require housing and, and require other, office space use and, and flex space use and industrial in the periphery.

And so, as a hospital grows and it really is a, part in the primary beacon of, of the region, in terms of hospital services being at the top end, for a 90 mile radius.

so, many more opportunities to create jobs and to create, again, the radius effect of jobs in and around, the downtown hospital.

And let's go back to parking real quick.

In our last minute or so.

Talk about just the really that influence that that's really a major cost driver for projects.

It's hard to make money.

Talk about where that is, why parking is such a key catalyst to really make the whole project work.

Sure.

Well, parking is is not affordable.

and to build structured parking into a project, for, for a developer again in a market the size.

And so for the city city's supply that's critical or this project could not happen.

It absolutely cannot happen.

And so, and, and people have to have parking where we're trying to size the parking into a way that this, this will not serve just, just beacon this or this parking will serve the hospital at Memorial.

It'll serve this project and and potentially no train project and some other, everything around it's currently utilizing and growing around around the hospital and this project in particular.

And and again, the spin off that will come with Notre Dame.

So you have to have the parking, but you just can't build it into a project cost.

Right.

So let's go back to timing real quick.

In our last 30 seconds you hit on it at a high level, but but remind us of the timing when we might see some activities.

Yeah, sure.

hopefully this, spring summer, we'll be able to start the parking at this meeting.

25.

I'm already in 25.

Unfortunately.

we'll start the parking garage construction.

That'll take a little over a year.

It's probably fall of 26 before we're able to start, quote unquote, wrapping the parking garage and building right next to and integrating with the parking garage, the residential units and the hotel units and and some of the commercial space that we plan for this.

He's Brad two degrees, a managing partner at Great Lakes, half of Brad, thanks for joining us.

Appreciate you bringing a great project to our community.

We're going to go out to the field now.

George Lepeniotis is out to talk a little bit more about this project.

George, let me toss it to you.

Thanks, Jeff.

I'm downtown, South Bend, and I'm joined today by Bethany Hartley, president of the South Bend Elkhart Regional Partnership.

I got it right that time.

Bethany, thank you for being with us today.

Thank you for having me.

Tell me, first off, a little bit about your organization.

What is it that the partnership is doing for our region?

Yeah.

So the South and Elkhart Regional Partnership, we cover five counties in two states.

So Elkhart Marshall and Saint Joe in Indiana and Berrien and Cass in Michigan On the Indiana side, we do a lot of catalyzing.

And so part of what we're talking about today is a catalytic fund through ready through the state of Indiana.

We have to do a lot of convening and collaborating.

So we really look at how do we attract more people to this region, how do we keep them here?

How do we grow businesses that are here, and how do we attract new businesses?

And that's interesting to say, because when you think about local economies and the growth and the competitive nature of one community versus another for what they see as an economic development, thinking regionally is important, isn't it?

It sure is, yes.

Especially when we're going out and selling this region to others and to the companies.

And so they are thinking regionally.

And so we need to be thinking about that.

When we look at the size of the region, it's about 723,000 people collectively in Indiana.

So about 520,000.

That impact is huge.

And the impact that folks can have on this region is pretty significant.

Whereas each and every separate community in and of itself would not necessarily even make the map, so to speak.

Right?

Right, exactly.

That's awesome.

Well, we're here, downtown, South Bend.

We're talking a little bit about the Madison Lifestyle district, which is hopefully going to be right where we stand.

Yes.

Right.

Yes.

it is sandwiched between Memorial Hospital on the south and the north.

I'm sorry, in downtown, South Bend on the south.

Tell us a little bit about the project, how it came to be and maybe some of the misnomers that surround it.

Sure.

So this Madison Lifestyle District project is being spearheaded by Great Lakes Capital, which is a private firm.

and this project will bring transformation, catalytic transformation, which is what we're looking for.

So the skyline is going to change once this project is complete.

And so this is going to bring online 240 housing units.

It's going to bring on 40,000ft² of commercial use and retail use.

And it's going to bring a new parking structure to the site to this area.

So we're standing on a surface level parking structure.

What we're looking forward to are parking garages, which will put about 900 plus, spots into downtown South Bend, which is awesome for all the activations we're trying to make happen here in the South Bend area.

So yes, these two blocks bookended by beacon, the Memorial Hospital, and then nicely located north of what Notre Dame just acquired, the Tribune Building and City Church.

So we believe the vibrancy and the density is just going to upswell in the next couple years.

Yeah.

And you know, this project, while it is a privately developed project, is, as you said, it's a catalyst.

The skyline changes, the feel of the neighborhood changes.

It brings residential to an area that has largely hasn't had those options for a while.

is that the catalyst that you're looking for?

Do you think that will have, kind of the ability to anchor some more development?

Absolutely.

Yeah.

So this is being spearheaded by GLC, but the partners involved are the Regional Development Authority of Northern Indiana, the Redevelopment Commission of South Bend, and the City of South Bend.

So this is a complex, massive project over a quarter billion dollar project.

And so we know when we looked at projects like for regional cities, there was Howard Park.

That happened in South Bend.

Howard Park was somewhat of a smaller project.

But when you look around, what has happened around Howard Park, the private development of new housing, new apartments, new amenities coming online, we anticipate more than that happening with this project.

Yeah, yeah, I could see that.

All right.

And this is not your only project that you guys are working on and trying to help spearhead.

tell us about some of the other exciting developments you got coming down the pipe.

Sure.

So this is a part of the READI One program we were just awarded in on April 11th, READI Two program funds of $45 million to the South and Elkhart region, which was one of six of the highest awards given out this round.

And so we anticipate doing another public call for projects, and we're excited to see what comes online.

There's further, funding through the Lilly Endowment Incorporated that added another 250 million statewide to the $500 million READI Two bucket.

So we are actively pursuing that.

And those are around arts and culture and blighted, developments.

And for those of our viewers that may not be quite so familiar with it READI is a state level economic development fund.

That's correct.

And it's administered through the Indiana Economic Development Corporation.

In total between READI one READI two and LEI funds, you're looking at about 1.25 billion in catalytic funding that technically only makes them about 20% of what their full portfolio can be.

Well, that's awesome for our region.

Let's start here in South Bend.

I know there's this project, which is extremely exciting and very large, but there are a couple of other projects that may come online.

You talked about the University of Notre Dame making an investment in downtown South Bend, seeing the value in a vibrant downtown South Bend.

We've seen the transformative change that readI dollars have had in downtown Mishawaka.

what's next?

Yeah.

So we're excited about the private development coming on year.

four wins field.

There's going to be two new apartment complexes coming online there with mixed income housing, bringing in hundreds of units to the region.

We funded help fund, part of the Morris Performing Arts expansion and development.

When you look over in Elkhart, you got the Tolson project that's in the Benham neighborhood.

We anticipate a lot of growth happening in the Benham neighborhood.

we've helped fund some of the river districts, which in Elkhart, ten years ago, there wasn't a river district.

Today, there's a beautiful river district that is thriving and continuing to grow.

So those are some of the projects we're focused on.

That's awesome.

Well, anyway, thank you for being with us here today.

Thanks for kind of giving us a bird's eye view of what's coming next.

Our viewers have probably as we've been talking, they've been seeing graphics of what this is going to be.

And, you know, it's it's very exciting.

So thanks a lot for the work.

And thanks for being with us.

Thank you, Jeff, back to you in the studio.

I'm sure you have more to talk about.

On how state, local and private companies are doing their part to help our region become a stronger and better place to attract more business.

George, thank you.

Appreciate the inside.

Look out there.

And thank you, Bethany, for talking about READI and all the things that are going on there.

Caleb Bauer is with me now.

Caleb, thank you for joining us.

Caleb is the executive director of the Department Community Investment at the City South Bend, and will round out our interview today with Caleb.

Caleb, just for somebody unfamiliar with different community investment, does what for the city something.

Yeah, we do a few different things for the city.

we handle some regulatory functions.

Includes building department zoning.

But primarily we're the economic development and community development department for the city of South Bend.

Great.

And so, Caleb, on our show today, we had Brad Toothaker from Great Lakes Capital, talking a little bit about, Madison lifestyle district is really our focus today.

And then Bethany Hartley from the South Bend Elkhart Regional Partnership talking about, the funding and READI and sort of how all that will go together.

But from your perspective, Madison Lifestyle District is a transformational project for downtown.

Give us a feel for why this is such an important project for the city.

Yeah, it's really a project that fills in two missing blocks of our downtown.

south of Memorial Hospital.

These two blocks have been surface parking lots for a number of decades now, and really historically were part of the downtown core.

And so really, it shifted the focus of our downtown south of LaSalle.

and, and we're hoping to see those spots filled in and really see the downtown extend all the way to our premier, hospital, Memorial Hospital, which, they are currently adding a new ten story patient tower, a $230 million investment.

And so this lifestyle district not only connects the hospital into the downtown, but can serve as a space for, individuals who live, want to live or, and work at the hospital.

they can live right next to their workplace.

This is, as we've talked.

It's complicated.

It's, it requires a lot of partners to get it this way.

Public private partnership.

The city's investing dollars.

Developers state.

Speak to us a little bit about the public private partnership and why that's so necessary to make a project like this go.

Yeah.

I think, you know, parking is, a challenge for a lot of cities.

surface parking is cheap, but it takes up valuable real estate in your downtown.

And constructing parking garages can be cost prohibitive.

It can really, make it so that a deal can't pencil.

And so a lot of cities in Indiana, around the country, are actively involved in helping support from an economic development standpoint, the construction of those structured parking garages that support an overall lifestyle district like this.

And that's really where the city of South Bend comes in in this project as well.

Great.

And so we touched with, with Bethany a little bit on, readi and readi funds being a part of this, the city's benefited from readi not only on this project, but some previous projects from the state.

just talk a little bit about the the state, maybe in that investment that the RTA and the state are making here.

Yeah, I think it's been, you know, we've seen so many successful projects in our region through the regional cities and then readi 1.0 process and, a really visionary program from Governor Holcomb and from the state legislature, to make those big bets in our cities on, quality of place, quality of life improvements that really, make our urban cores attractive places for people to live and work.

And we've seen that play out throughout South Bend with, improvements we've seen at Howard Park with the improvements will be making at the Morris Performing Arts Center and then the lifestyle district.

Really, making a bet that we believe that people do want to live in downtown.

And if we build a lifestyle district, that provides those housing units, we, are excited to see more individuals moving into our downtown.

So let's leave Madison for a second.

But but all this is really interrelated.

So you mentioned the urban core and how important that is.

And so speak a little bit of just kind of maybe the state of it.

Right.

When I look around downtown, there's a lot of projects going to remind our viewers a little bit of the things they should be excited about seeing in the downtown area.

Yeah, absolutely.

From south to north, there is activity throughout downtown South Bend, new construction, renovations, on the south end at Four Winds Field.

We've got a $45 million expansion that will add a second deck, a new clubhouse, outfield activation to the field.

Really, leveling that experience up for attendees at baseball games and making that, a better usable space for non-baseball events as well.

then we've got new development going on around the field as well.

Real America is building, a mixed, income, multi building apartment development just east of Four Winds Field.

Devereaux Peters is building a new building, on Michigan in Monroe, the corner of Michigan and Monroe.

And then I mentioned the Morris Performing Arts Center.

We're adding, a new expansion to the center there that will really, activate the the space and hopefully improve, our ability to attract big name shows that are so exciting to see at the Morris.

And as well, we're in the middle of our downtown planning process tonight, we're presenting some initial findings.

but that process is really taking a look at what can our downtown look like in 20 years from now.

And, and, you know, being realistic about the size of our city, what is achievable in the 20 year time frame.

And we think what we've shown is very exciting, but also realistic that these are things that we can get done in the next 20 years.

it's going to take a lot of partners.

It's going to take members of our community stepping up and and taking some risks, and it's going to take our state government continuing with the transformative programs that they have, put into place that have supported these exciting projects.

But, we think there's a bright future ahead in downtown South Bend.

Yeah.

So let's stand here in court for a second, and I'll play devil's advocate for a second.

Some people say, wait, why do you invest everything downtown?

Shouldn't it be spread equally amongst the whole community?

But cities, strategically pick downtown is an important investment.

Talk about just why it's important to have a strong urban core.

We call downtown the living room of South Bend in that, you know, when you have someone over to your house, you're going to invite them into your living room, whether they're a guest, but also you're going to spend a lot of time in your living room.

And that's what we view downtown as.

It's it's everyone's neighborhood.

everyone who lives in the city of South Bend, we want them to feel welcome in downtown and come downtown for those experiences that downtowns can provide.

But also, we want downtown to be a welcoming place for people coming and visiting our community for the first time.

That's point one, but as well, downtown towns play an important role operationally for city governments on the revenue side.

So in downtown, on value per acre, which is one metric we look at, we see more than ten times the value, per acre in downtown property than we do anywhere else in the city of South Bend, aside from any street commons, which is an urban style development near Notre Dame.

And so that value per acre is really the engine by which we can fund all of the quality of life improvements, all of the infrastructure improvements, all of the things that people want to see in their neighborhoods, they're driven by us growing the value of our downtown and really capturing that, growth in the tax base, in the downtown.

You know, it's exciting to see.

And there's so many seeds get planted over a long period of time.

I think of, you know, some of that 10, 20, 30, 40 years ago that now are helping to, spur development activity is pretty exciting to see.

As we get closer to the end of our show.

Let's go back to Madison for a second.

So people have long wondered what was going to happen in that area.

Now they're anxious to see it happen.

Talk to us a little bit about maybe a general timeframe of when they might start to see some activity happening down there.

Sure.

Yeah.

These are big projects.

And big projects do have, multi-year timelines.

And so I think we've gotten to the deal and we've, executed the development agreement that will unlock this project, really, when people will see a lot of construction activity is is the beginning of the construction season in 2025.

That's when the public parking garage on the northern block of the Madison Lifestyle District will start going up.

And then they'll see, all the private development wrapping that garage around it.

and then the southern block of the development would be coming, in the ensuing years.

So probably, you would see most of the footprint of this in place in 2027 with occupancy by 2028.

You know, it's interesting you start thinking of those years because, again, some of this spreads out over many construction cycles and stuff.

But it's important that that planning happens over, over that long period.

So Caleb, our less, you know, 30 seconds just a quick again, high level reminder why people should be so excited about what's going on in downtown South Bend.

We have, had really good progress in the last few years, and we've rebounded from, the challenges of the Covid pandemic, and we've seen new construction coming into downtown in a way that we have not seen in 40 or 50 years.

And and our goal within city government is to keep our foot on the gas, make sure that we have a pro-business, supportive environment for development and, really build the downtown that benefits our whole community and that everyone feels welcome and awesome.

Thank you.

Caleb Bauer, executive director of Investment City of South Bend Thanks for being here today.

That's it for our show today.

On behalf of the entire team here at PBS Michiana Wnit, we want to thank you for watching on Wnit or listening to our podcast to watch this episode again or any of our past episodes.

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I'm Jeff Rea I'll see you next time.

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