Mechanism

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Community & Connection in Manufacturing

From Vacant Warehouses to Thriving Makerspace: The Transformation of Circle City Industrial Complex

The Circle City Industrial Complex (CCIC) is a strip of manufacturing buildings that was once the home of a major automotive parts manufacturer. It’s housed along Massachusetts Avenue, an up-and-coming neighborhood just northeast of downtown Indianapolis.

Over the past three decades it has been a constellation of mostly vacant and underutilized buildings. Today it is a 21st century industrial cluster where urban manufacturing space blends with offices, breweries, distilleries, a meadery, and an artists’ colony.

The $10.5-million redevelopment project came to life at the confluence of local political will and a few outside perspectives. The city had a cache of Community Development Block Grant (CDBG) funds it wanted to spend on Eastside Indianapolis after the Obama administration designated the neighborhood as a “Promise Zone.”

Local Initiatives Support Corporation (LISC) has played a major role in developing the space. The Indianapolis office provided over $870,000 in loans and grants for façade development, environmental assessment planning, community engagement planning, predevelopment support, and construction support along the corridor. In 2015, LISC also awarded the project a $4.1 million loan to makeover a portion of the building.

Teagan Development and LISC were the driving forces behind the project, while Riley Area Development Corporation (RADC), a local community development group, helped designate CDBG funds during the initial development phase. RADC also manages RUCKUS, a successful makerspace that started out at CCIC but has since moved into its own building nearby.

National players like the Urban Land Institute and Recast City came in to help the city figure out what it should do with all that century-old industrial space on Massachusetts Avenue In the past, the city would have just spent CDBG funds on redeveloping it into housing, or tearing the building down. “This urban manufacturing site was right on that tipping point,” said Eric Strickland, the previous executive director of RADC, which was one of the grantors involved in CCIC.

Teagan Development, LISC, RADC, and the city envisioned a new hub for Indianapolis’s burgeoning startup and small-scale manufacturing culture. “We had the capacity to be confident that if we launch something for startups or entrepreneurs we would have connections in the community with small business owners,” said Strickland. “We had a culture of small businesses making things even before the maker movement.”

The Urban Manufacturing Alliance first came to CCIC through the Equitable Innovation Economies program, in which UMA, PolicyLink, and the Pratt Center for Community Development helped stakeholders lay out a game plan for connecting workers of color with manufacturing jobs throughout Indiana. Shortly after, UMA brought its 2016 Gathering to the space, which connected Strickland and other CCIC stakeholders with industrial developers from around the country.

“I do want to give a lot of credit to UMA because they showed up the weeks before we opened our doors and brought more of the cultural discussion,” said Strickland. UMA raised “issues such as equity and inclusion, and what manufacturing can do in terms of job creation and how it plays a role in urban economics on the equity side.”

Strickland said that, after some hiccups due to the complexity of the building and redevelopment of its space over the years, the 800,000-square-foot project is starting to break even. There are 114 tenants in the space, 109 of which are for-profit businesses. Almost all of the 51 jobs supported by CCIC tenants are manufacturing or artist-related.

The mammoth project has not been without its challenges, however. As hinted at earlier, RUCKUS has since moved out of the building because their space was complicated by a lack of temperature control, different ventilation needs, and leaky roofs. Chelsea Humble, the North Mass Corridor project manager at RADC, said RUCKUS is still located along the North Mass Corridor near the CCIC complex. RADC would collaborate on a project within the CCIC development again if the right opportunity arose, she added.

One thing Strickland said he would have liked to have seen with CCIC is a greater density of jobs in some spaces. Take the brewery tenant, for example. “We could show you a large space but a lot of it is a high volume of ingredients, like yeast, water, big kettles—not necessarily a lot of people,” said Strickland. “So that 10,000-square foot space employs 12 people. Well that would be great if it was 40.”

Q&A

Why does manufacturing matter to the developers?

Because of the sector’s ability to create well-paying jobs for diverse communities.

Did any of the developers on this project have a history of manufacturing development?

This was RADC’s first manufacturing development and makerspace.

How did developers develop capacity for a manufacturing real estate project?

Through UMA, RADC was connected with spaces like NextFAB in Philadelphia and TXRX Labs in Houston, which provided them and LISC Indianapolis leaders an understanding for how a makerspace, industrial development, and an industrial district could all work together. Other outside organizations, like the Urban Land Institute and Recast City assisted RADC with zeroing in on Indianapolis’s maker community as an area of the economy poised for growth. In the second half of 2019, RADC has been working on developing a new protocol that includes separating financial oversight from management to assist with the RUCKUS’s self-sustaining capacity. This is helping RUCKUS to know where to pivot its resources and its programs. In addition, RADC hired an experienced community development program manager with real estate experience to restructure the operations at RUCKUS so that it can move toward more robust programming. Currently it is working on boosting its maker memberships by 150 percent to improve its connections with the community, and its ability to maintain, repair, and replace equipment in the future.

Does the neighborhood around CCIC have a history of manufacturing?

Yes. The entire CCIC structure used to be a manufacturing hub. In addition, the entire North Mass Industrial Corridor was always zoned and used for industrial purposes. The 2015 North Mass Industrial Corridor Plan put together by RADC and partners revealed there are over 66 active businesses in the area (not including those in CCIC) that are projected to continue growing.

For RADC, how was developing the RUCKUS makerspace different from other types of developments in their portfolio?

RADC was typically doing multi-family housing projects using local HUD funds and tax credits. Through previous partnerships, RADC was able to participate in the development of commercial space in mixed use rental housing projects. LISC funded research on job creation via manufacturing near these mixed-use partnerships.

How important is it to maintain fabrication activity in CCIC?

The project was created to support fabrication activity, primarily because of the skilled job creation component. It is meeting community needs and is best suited for fabrication, alongside some entertainment spaces as well.

What role did RADC’s board play in helping develop this project?

Prior to involvement by outside consultants, RADC’s board was actively looking to expand its impact regionally. They worked on this by providing space for entrepreneurs, with the hope of being able to connect with more entrepreneurs that they could then service towards economic impact. By the time the Urban Land Institute and other outside groups came in to promote manufacturing, RADC was already positioned to embrace these ideas. One former board member later went on to lease a space in RADC’s own manufacturing development at 1417 Commerce Avenue. RADC’s board continues to play an active role in directing resources to make RUCKUS a more community-oriented space. Towards the end of 2019 RADC allocated over $5,000 towards replacing and repairing equipment and continuing to build out space. In addition, they have invested funds towards more research into what makes a makerspace successful, and how RADC can work to improve what RUCKUS offers.

Has there been any focus on inclusion and equity when selecting tenants?

There is a focus on inclusion and equity in RUCKUS. Seventy-five percent of RUCKUS members are low to moderate income, sixty percent are women, and forty percent are minorities. To achieve this, RUCKUS decided to elect a woman of color to lead the space. Diverse leadership and intentional planning helped connect them to workshops or meetups for several diverse groups like the Women in Manufacturing Indiana Chapter, and local manufacturer RecycleForce which trains reentry citizens. RUCKUS’ leader eventually went on to establish the Latinas Welding Guild which deepened the facility’s relationships with people of color from the entrepreneurship community. RADC recently hired a woman of color to lead its organization, and continues to be intentional about working with minority and women-owned businesses. The two anchor tenants at the new RUCKUS building are women-owned businesses.

Is the RUCKUS makerspace breaking even?

RUCKUS has faced its share of challenges around developing a sustainable revenue model and with infrastructure issues at the original CCIC building. As RUCKUS settles into its new space, RADC is working to ensure that the makerspace remains financially sustainable. CCIC continues to bring in more tenants, and secured two additional loans totaling $9 million in the last year to complete renovations on the south end of the building.

Did revenue from other real estate projects in RADC’s portfolio support the organization’s capacity to manage the RUCKUS makerspace?

RADC was able to lean on the revenue it received from its various housing projects to balance out the investment it made to launch RUCKUS in CCIC in 2016. RADC has leveraged some of its organizational funding to set up new equipment and repair broken equipment at RUCKUS, and to finish its new space at 1417 Commerce Avenue. RADC is aiming for RUCKUS to be self-sustaining in 2020.

Are there opportunities for non-tenants to interact with CCIC and the manufacturers inside?

Several tenants have tap rooms and retail showrooms. To support placemaking efforts around CCIC, the city is funding and constructing a new multi-use trail along the front portion of CCIC that connects with the Indianapolis Cultural Trail. Once finished, this path, called the “Maker’s Trail”, will run inside the building and offer pedestrians a direct connection to makers and artisans. The city has also added CCIC to the monthly city-wide “First Friday” artists open house list. CCIC also hosts beer and wine festivals and music events.

RUCKUS has begun focusing heavily on creating community partnerships and bringing in non-tenant members as part of its programming in the future. RUCKUS is also beginning a new SBA-funded workforce development program in 2020 that will allow more people to access what it has to offer.

Have market pressures made it more difficult to achieve any of the original mission goals of CCIC? Yes. While rents are low, there are still less expensive light industrial locations outside of the city center. But most of CCIC’s tenant manufacturers chose the building because of their smaller space demands—either because they’re startups or a smaller space satisfies most of CCIC’s tenant their production needs—and the desire to have a retail component so close to Indianapolis’s city center. In addition, CCIC hosts a community environment with sharing and collaboration opportunities unlike many industrial spaces.

New member and equipment fees will be added to RUCKUS in 2020. These fees will help with maintenance of the space and equipment. In addition, RUCKUS is actively looking for ways for the space to give newer small business owners pricing breaks at the beginning of their memberships.

What type of entity is the developer?

The renovation of CCIC was led by a partnership between LISC, a CDFI, and local for-profit developer Teagen Development. RADC, a non-profit, is the governing entity and financial steward of RUCKUS, which is a for-profit space that started in CCIC but has since moved into a separate building nearby.

Did the developers receive assistance from local government for this project?

CIC received significant support from the city. Since 2016, Indianapolis has invested in new roads for truck access, stormwater improvements, and the elimination of abandoned homes next to CCIC. The city also provided approximately $1.5 million in public funds to help the facility with job creation, and secured $500,000 from the EPA to do a site assessment for properties surrounding CCIC along the Northern Massachusetts corridor to help the facility with environmental cleanup and covenants. They also supported the rezoning of CCIC. The city-sponsored “Maker’s Trail” will support placemaking efforts around CCIC.

What is the zoning designation of the parcel on which the project is located?

Mixed-use.

Were any zoning variances needed to develop this project?

Yes, variance to add loading docks, brewing, a distillery, and on-site bars and restaurants.

Was there protective industrial zoning?

No.

How many tenants are in the space?

114.

What types of tenants are present?

Makers, artists, non-profits, small businesses, galleries, and a brewery.

How many tenants are businesses?

109

How many of the 109 small businesses in CCIC are production businesses?

Approximately 40.

How many jobs are supported by this project?

51 and counting.

How many jobs are supported by manufacturing?

94 percent of jobs are art- or manufacturing- based.

How are tenants selected?

There is a preference for small local businesses and manufacturing businesses.

Did you receive any tax credits?

No.

Size of the real estate deal?

$10.5 million.

What square footage options do tenants have?

From 100 sq. ft. to 80,000 sq. ft.

What is the rent per square foot?

$6.50 for the largest spaces. Smaller spaces for makers are $12.

How long are the lease terms?

Monthly to ten years.

How do you approach subdividing large spaces for multiple tenants?

It is set up as a mix of micro-sized maker spaces, slightly larger 1,000-square-foot and 5,000-square-foot manufacturing spaces, plus a few larger spaces.

Is there an opportunity for tenants to take an ownership stake?

No.

Who were key stakeholders helping with community outreach?

For RUCKUS, RADC tapped into its existing networks that were established with communities through affordable housing development.

Total square feet?

800,000.

This case study was originally published by Urban Manufacturing Alliance in 2019 as part of “All About the Jobs: Eight Mission-driven Industrial Developers on How Their Spaces Anchor Manufacturers and Support Local Economies,” a project developed in partnership with Local Initiatives Support Corporation (LISC) and students at the Albany Law School Community Development Clinic.

The Circle City Industrial Complex (CCIC) is a strip of manufacturing buildings that was once the home of a major automotive parts manufacturer. It’s housed along Massachusetts Avenue, an up-and-coming neighborhood just northeast of downtown Indianapolis.

Over the past three decades it has been a constellation of mostly vacant and underutilized buildings. Today it is a 21st century industrial cluster where urban manufacturing space blends with offices, breweries, distilleries, a meadery, and an artists’ colony.

The $10.5-million redevelopment project came to life at the confluence of local political will and a few outside perspectives. The city had a cache of Community Development Block Grant (CDBG) funds it wanted to spend on Eastside Indianapolis after the Obama administration designated the neighborhood as a “Promise Zone.”

Local Initiatives Support Corporation (LISC) has played a major role in developing the space. The Indianapolis office provided over $870,000 in loans and grants for façade development, environmental assessment planning, community engagement planning, predevelopment support, and construction support along the corridor. In 2015, LISC also awarded the project a $4.1 million loan to makeover a portion of the building.

Teagan Development and LISC were the driving forces behind the project, while Riley Area Development Corporation (RADC), a local community development group, helped designate CDBG funds during the initial development phase. RADC also manages RUCKUS, a successful makerspace that started out at CCIC but has since moved into its own building nearby.

National players like the Urban Land Institute and Recast City came in to help the city figure out what it should do with all that century-old industrial space on Massachusetts Avenue In the past, the city would have just spent CDBG funds on redeveloping it into housing, or tearing the building down. “This urban manufacturing site was right on that tipping point,” said Eric Strickland, the previous executive director of RADC, which was one of the grantors involved in CCIC.

Teagan Development, LISC, RADC, and the city envisioned a new hub for Indianapolis’s burgeoning startup and small-scale manufacturing culture. “We had the capacity to be confident that if we launch something for startups or entrepreneurs we would have connections in the community with small business owners,” said Strickland. “We had a culture of small businesses making things even before the maker movement.”

The Urban Manufacturing Alliance first came to CCIC through the Equitable Innovation Economies program, in which UMA, PolicyLink, and the Pratt Center for Community Development helped stakeholders lay out a game plan for connecting workers of color with manufacturing jobs throughout Indiana. Shortly after, UMA brought its 2016 Gathering to the space, which connected Strickland and other CCIC stakeholders with industrial developers from around the country.

“I do want to give a lot of credit to UMA because they showed up the weeks before we opened our doors and brought more of the cultural discussion,” said Strickland. UMA raised “issues such as equity and inclusion, and what manufacturing can do in terms of job creation and how it plays a role in urban economics on the equity side.”

Strickland said that, after some hiccups due to the complexity of the building and redevelopment of its space over the years, the 800,000-square-foot project is starting to break even. There are 114 tenants in the space, 109 of which are for-profit businesses. Almost all of the 51 jobs supported by CCIC tenants are manufacturing or artist-related.

The mammoth project has not been without its challenges, however. As hinted at earlier, RUCKUS has since moved out of the building because their space was complicated by a lack of temperature control, different ventilation needs, and leaky roofs. Chelsea Humble, the North Mass Corridor project manager at RADC, said RUCKUS is still located along the North Mass Corridor near the CCIC complex. RADC would collaborate on a project within the CCIC development again if the right opportunity arose, she added.

One thing Strickland said he would have liked to have seen with CCIC is a greater density of jobs in some spaces. Take the brewery tenant, for example. “We could show you a large space but a lot of it is a high volume of ingredients, like yeast, water, big kettles—not necessarily a lot of people,” said Strickland. “So that 10,000-square foot space employs 12 people. Well that would be great if it was 40.”

Q&A

Why does manufacturing matter to the developers?

Because of the sector’s ability to create well-paying jobs for diverse communities.

Did any of the developers on this project have a history of manufacturing development?

This was RADC’s first manufacturing development and makerspace.

How did developers develop capacity for a manufacturing real estate project?

Through UMA, RADC was connected with spaces like NextFAB in Philadelphia and TXRX Labs in Houston, which provided them and LISC Indianapolis leaders an understanding for how a makerspace, industrial development, and an industrial district could all work together. Other outside organizations, like the Urban Land Institute and Recast City assisted RADC with zeroing in on Indianapolis’s maker community as an area of the economy poised for growth. In the second half of 2019, RADC has been working on developing a new protocol that includes separating financial oversight from management to assist with the RUCKUS’s self-sustaining capacity. This is helping RUCKUS to know where to pivot its resources and its programs. In addition, RADC hired an experienced community development program manager with real estate experience to restructure the operations at RUCKUS so that it can move toward more robust programming. Currently it is working on boosting its maker memberships by 150 percent to improve its connections with the community, and its ability to maintain, repair, and replace equipment in the future.

Does the neighborhood around CCIC have a history of manufacturing?

Yes. The entire CCIC structure used to be a manufacturing hub. In addition, the entire North Mass Industrial Corridor was always zoned and used for industrial purposes. The 2015 North Mass Industrial Corridor Plan put together by RADC and partners revealed there are over 66 active businesses in the area (not including those in CCIC) that are projected to continue growing.

For RADC, how was developing the RUCKUS makerspace different from other types of developments in their portfolio?

RADC was typically doing multi-family housing projects using local HUD funds and tax credits. Through previous partnerships, RADC was able to participate in the development of commercial space in mixed use rental housing projects. LISC funded research on job creation via manufacturing near these mixed-use partnerships.

How important is it to maintain fabrication activity in CCIC?

The project was created to support fabrication activity, primarily because of the skilled job creation component. It is meeting community needs and is best suited for fabrication, alongside some entertainment spaces as well.

What role did RADC’s board play in helping develop this project?

Prior to involvement by outside consultants, RADC’s board was actively looking to expand its impact regionally. They worked on this by providing space for entrepreneurs, with the hope of being able to connect with more entrepreneurs that they could then service towards economic impact. By the time the Urban Land Institute and other outside groups came in to promote manufacturing, RADC was already positioned to embrace these ideas. One former board member later went on to lease a space in RADC’s own manufacturing development at 1417 Commerce Avenue. RADC’s board continues to play an active role in directing resources to make RUCKUS a more community-oriented space. Towards the end of 2019 RADC allocated over $5,000 towards replacing and repairing equipment and continuing to build out space. In addition, they have invested funds towards more research into what makes a makerspace successful, and how RADC can work to improve what RUCKUS offers.

Has there been any focus on inclusion and equity when selecting tenants?

There is a focus on inclusion and equity in RUCKUS. Seventy-five percent of RUCKUS members are low to moderate income, sixty percent are women, and forty percent are minorities. To achieve this, RUCKUS decided to elect a woman of color to lead the space. Diverse leadership and intentional planning helped connect them to workshops or meetups for several diverse groups like the Women in Manufacturing Indiana Chapter, and local manufacturer RecycleForce which trains reentry citizens. RUCKUS’ leader eventually went on to establish the Latinas Welding Guild which deepened the facility’s relationships with people of color from the entrepreneurship community. RADC recently hired a woman of color to lead its organization, and continues to be intentional about working with minority and women-owned businesses. The two anchor tenants at the new RUCKUS building are women-owned businesses.

Is the RUCKUS makerspace breaking even?

RUCKUS has faced its share of challenges around developing a sustainable revenue model and with infrastructure issues at the original CCIC building. As RUCKUS settles into its new space, RADC is working to ensure that the makerspace remains financially sustainable. CCIC continues to bring in more tenants, and secured two additional loans totaling $9 million in the last year to complete renovations on the south end of the building.

Did revenue from other real estate projects in RADC’s portfolio support the organization’s capacity to manage the RUCKUS makerspace?

RADC was able to lean on the revenue it received from its various housing projects to balance out the investment it made to launch RUCKUS in CCIC in 2016. RADC has leveraged some of its organizational funding to set up new equipment and repair broken equipment at RUCKUS, and to finish its new space at 1417 Commerce Avenue. RADC is aiming for RUCKUS to be self-sustaining in 2020.

Are there opportunities for non-tenants to interact with CCIC and the manufacturers inside?

Several tenants have tap rooms and retail showrooms. To support placemaking efforts around CCIC, the city is funding and constructing a new multi-use trail along the front portion of CCIC that connects with the Indianapolis Cultural Trail. Once finished, this path, called the “Maker’s Trail”, will run inside the building and offer pedestrians a direct connection to makers and artisans. The city has also added CCIC to the monthly city-wide “First Friday” artists open house list. CCIC also hosts beer and wine festivals and music events.

RUCKUS has begun focusing heavily on creating community partnerships and bringing in non-tenant members as part of its programming in the future. RUCKUS is also beginning a new SBA-funded workforce development program in 2020 that will allow more people to access what it has to offer.

Have market pressures made it more difficult to achieve any of the original mission goals of CCIC? Yes. While rents are low, there are still less expensive light industrial locations outside of the city center. But most of CCIC’s tenant manufacturers chose the building because of their smaller space demands—either because they’re startups or a smaller space satisfies most of CCIC’s tenant their production needs—and the desire to have a retail component so close to Indianapolis’s city center. In addition, CCIC hosts a community environment with sharing and collaboration opportunities unlike many industrial spaces.

New member and equipment fees will be added to RUCKUS in 2020. These fees will help with maintenance of the space and equipment. In addition, RUCKUS is actively looking for ways for the space to give newer small business owners pricing breaks at the beginning of their memberships.

What type of entity is the developer?

The renovation of CCIC was led by a partnership between LISC, a CDFI, and local for-profit developer Teagen Development. RADC, a non-profit, is the governing entity and financial steward of RUCKUS, which is a for-profit space that started in CCIC but has since moved into a separate building nearby.

Did the developers receive assistance from local government for this project?

CIC received significant support from the city. Since 2016, Indianapolis has invested in new roads for truck access, stormwater improvements, and the elimination of abandoned homes next to CCIC. The city also provided approximately $1.5 million in public funds to help the facility with job creation, and secured $500,000 from the EPA to do a site assessment for properties surrounding CCIC along the Northern Massachusetts corridor to help the facility with environmental cleanup and covenants. They also supported the rezoning of CCIC. The city-sponsored “Maker’s Trail” will support placemaking efforts around CCIC.

What is the zoning designation of the parcel on which the project is located?

Mixed-use.

Were any zoning variances needed to develop this project?

Yes, variance to add loading docks, brewing, a distillery, and on-site bars and restaurants.

Was there protective industrial zoning?

No.

How many tenants are in the space?

114.

What types of tenants are present?

Makers, artists, non-profits, small businesses, galleries, and a brewery.

How many tenants are businesses?

109

How many of the 109 small businesses in CCIC are production businesses?

Approximately 40.

How many jobs are supported by this project?

51 and counting.

How many jobs are supported by manufacturing?

94 percent of jobs are art- or manufacturing- based.

How are tenants selected?

There is a preference for small local businesses and manufacturing businesses.

Did you receive any tax credits?

No.

Size of the real estate deal?

$10.5 million.

What square footage options do tenants have?

From 100 sq. ft. to 80,000 sq. ft.

What is the rent per square foot?

$6.50 for the largest spaces. Smaller spaces for makers are $12.

How long are the lease terms?

Monthly to ten years.

How do you approach subdividing large spaces for multiple tenants?

It is set up as a mix of micro-sized maker spaces, slightly larger 1,000-square-foot and 5,000-square-foot manufacturing spaces, plus a few larger spaces.

Is there an opportunity for tenants to take an ownership stake?

No.

Who were key stakeholders helping with community outreach?

For RUCKUS, RADC tapped into its existing networks that were established with communities through affordable housing development.

Total square feet?

800,000.

This case study was originally published by Urban Manufacturing Alliance in 2019 as part of “All About the Jobs: Eight Mission-driven Industrial Developers on How Their Spaces Anchor Manufacturers and Support Local Economies,” a project developed in partnership with Local Initiatives Support Corporation (LISC) and students at the Albany Law School Community Development Clinic.