Indianapolis City Market to close for renovations next year, reopen with private management

Corrections & Clarifications: A previous version of the story misstated the new location of the Marion County courts. The courts moved to the southeast side.

Indianapolis’ troubled historic City Market, once a thriving lunch destination for downtown office workers, will close next year for renovations as the city attempts to revive a food hall that merchants say has fallen on tough times.

The city will also turn over management of the market from the nonprofit City Market Corporation, created in 1988 to run the market, to a private operator.

But City Market leadership has yet to share these plans with merchants who have become increasingly concerned about the market's future.

Half of the market’s 28 vendor stores sit empty. Merchants who built a livelihood selling cookies, falafel, juices and more there said they feel abandoned by market leadership and scared that it's only a matter of time before their businesses have to close.

“You need to help us,” Zakaria Alzyoud, the owner of Ameer Middle Eastern Cuisine, said in an appeal to market management. “We struggle. We don’t have answers.”The Jordan native said his sales have dropped by about 50% since before the pandemic to $600 on a good day.

When exactly the market will close and for how long is still yet to be determined, Deputy Mayor Scarlett Andrews told IndyStar.

City Market’s new food hall will be fully integrated into the city’s reimagined, mixed-use Market East district. Plans call for transforming the market from a struggling relic into a high-quality amenity that will serve the community, including hundreds of new residents in the 350-unit apartments coming to the Gold Building and the new 11-story tower with 60 apartment units, 8,000 square feet of office space and 22,000 square feet of retail that will sit atop the market's current east wing.

Related: $175M redevelopment project of apartments, retail chosen for area near City Market

Gershman Partners, the developer behind the City Market East redevelopment announced last year, was selected by the city this summer to redevelop the market food hall and contract a private operator to run it eventually in a public-private partnership. Citimark is a co-developer on the City Market campus project. Eric Gershman, principal of Gershman Partners, said the market food hall project could be completed before or by early 2026, although the exact timeline is still being worked out.

The city has set aside $12 million in Circle City Forward funds and $5 million from the downtown tax increment financing district for the City Market campus, with the potential for private funding as well.

Change is needed, city officials say

As downtown became emptied of workers post-pandemic, City Market's business model as a breakfast and lunchtime spot proved unsustainable. The move of the Marion County courts from the City-County Building across the street to the southeast side and the construction on Market street that stifled foot traffic for 15 months in 2020 to 2021 also hurt business.

But even before that the market had its struggles. Since at least 2012, the city has subsidized the market with approximately $300,000 to $400,000 annually, according to city data requested by IndyStar.

“If you're only able to serve kind of a daytime breakfast, lunch crowd, and even not consistently with hours in that way and still hobble along, not able to keep up with your operating expenses, and still rely on the city for 100% of capital maintenance expenses, I don't know that that's really successful,” Andrews said.

The market has a $1 million budget and cannot sustain itself on rent payments from merchants alone, market manager Keisha Harrison told IndyStar.

The pandemic challenged city officials to rethink how the market could succeed in an age of remote work.

“No more is it just about City Market operating in a vacuum and making sure that it can support the operations and the maintenance,” Rusty Carr, director of the Department of Metropolitan Development, said. “It's about providing a very high-quality amenity to downtown residents and Marion County residents, a place for people that want to come down here and enjoy these things.”

The City Market Corporation's core duties will shift to focusing on supporting food entrepreneurs and running the Original Farmers Market, which takes place outside on Market Street on Wednesdays May through October.

Uncertainty, fear, loom over market merchants

But for the market’s many family-run small businesses, a cloud of uncertainty now looms over their future, compounding the economic struggles they’ve endured since the pandemic.

None of the 11 vendors IndyStar interviewed was aware of the plan to redevelop the market hall. All but two vendors in the market have been moved to month-to-month leases starting in 2022, causing rumors to swirl about whether the market was closing.

“I’m afraid I will come tomorrow and they will say okay, it’s your last day,” Atif Selwanes, who took over Cath’s Coffee Inc from his brother-in-law earlier this year, told IndyStar. Like the other many family-run businesses in the market, he and his wife depend on the coffee shop for their livelihood.

But when vendors asked Harrison and the market’s board about why or whether the market was going to close, they said they were given no answers, frustrating many vendors.

“I just wish they were a little more forthcoming toward us and tell us this is going to happen around this time because we need to figure out what we’re going to do,” Lily Stockton, who has owned Just Cookies with her husband, Dave, for 35 years, said.

The board only met once this year, in March, instead of the usual quarterly meetings.

Harrison and board president Greg Henneke told IndyStar they couldn’t give vendors all the answers so far because the details were still being worked out and the plan is just now starting to gel. The board itself only learned about Gershman Partners being selected to redevelop the plan in the last month.

“I don’t think anybody has been kept in the dark about anything,” Henneke said. “In general, we’ve been able to tell our vendors what we know.”

The vendors now face a difficult decision of what to do before the market closes and uncertainty over whether they will be able to return when it reopens.

Stockton said she doesn’t know if they will return, but her husband said they hope to. She’s 58, too young to retire but too old, she said, to start over.

Harrison said she hopes many of the current vendors will come back after the market’s transformation and closure next year.

“We do acknowledge that it’s a pretty uncertain time for merchants and it’s somewhat uncertain for us too as a corporation because we don’t yet know what our future is,” Harrison said.

Market has been crippled by lack of customers

As the market sits on the brink of transformation, it has been bleeding merchants, losing them one by one.

In the first nine months this year, the market has gone from having 21 of 28 spaces leased to just 14 as of September 5, according to Harrison.

Vendors said they think City Market’s managers can do more to revitalize the market and attract customers back — draws like pop-up shops, more marketing, game nights or special events with live music.

When Stockton looks around the half-empty City Market today, empty chairs, empty tables, empty stores, she is concerned about how much longer her Just Cookies can stay open.

“People come and they look around and turn around and leave because it’s so empty. Business is terrible,” she said. “Now it is nothing what it used to be.”

The month-to-month leases make it hard to plan long-term, vendors said, or even know whether to invest in new equipment for their stores. Harrison told IndyStar she could not give merchants longer leases as it would put merchants and the market in a dire financial position, given the market is expected to close at some point.The vendors themselves are losing hope.

“For City Market, I believe there is no future. We live day by day," Alzyoud said.

The situation has gotten so bad that Alzyoud has taken a second job as a car salesman at a dealership to pay the bills for him and his elderly parents, who live with him, while keeping two employees to run the restaurant. After an eight-hour shift at the dealership, he drives at night for Uber or Doordash. He is scared he will lose his business.

Like other vendors, Alzyoud said he felt a lack of help from the market's leadership. The city did work with the market to offer a rent deferral program in 2021, but that aid has long ended and merchants said their businesses have continued to struggle since.

“She doesn’t work for us," Alzyoud said, referring to Harrison. "She don’t care. She don’t care."

What keeps him going is the dream of having a thriving business, making good money.

Like many other vendors who choose to remain at City Market despite the struggles, he believes it could one day make a comeback.

“I will fight to last second,” he said. “Because this is my business.”

One vendor is done trying, frustrated by mounting problems and the market’s leadership. Ross Hanna's Twenty Two Juice got its start in City Market in 2013.

Last month, Hanna decided to leave and concentrate on his second location in the newer Garage Food Hall. He called the market an “inhospitable and inconsiderate” place to do business.

“(The market’s managers have) got to start doing things to attract tenants, maybe dress the place up a little bit, or clean out the filth, the dirtiness of it all,” he said.

His shop’s tip jar and iPads have been stolen on numerous occasions, he said. A cooking smell lingers in the market, even at the start of the day. Grime on tabletops and door handles further detract from the market's appeal.

Harrison said the market has tried to bring customers back after the pandemic, from hosting events to extending the market’s catacombs tour hours during special times of the year like the NCAA finals to inviting merchants to cater food for private events.

She added that the market has a full-time housekeeping supervisor and employs security staff and housekeeping staff who keep the place clean.

“We operate at a very high professional level,” she said.

What happens now?

As the market looks to move to private management, both the city and Gershman Partners, the developer, do not want to lose the market’s distinctive character of being home to local food entrepreneurs rather than big-box chains.

Gershman said he anticipates that whoever takes over operations of the market will be required to ensure that a certain percentage of merchants remain local.

Another question is whether rents will remain below market rate under a private operator. Harrison said the current rents, ranging from $650 to $2,200, are kept low through the city subsidy, helping to ensure a low barrier of entry for new businesses.

“It is not a bad thing for the city to subsidize or support the City Market, again, you look at markets worldwide and there is that support and that is expected," she said. "I don’t feel we need to be any different in that regard. We do represent the city, so the city should have a stake in us.”

City Market’s remaining merchants still have loyal customers, but even they are worried.

Elizabeth Lamm-Krapf is one of them. She was a 23-year-old paralegal in the Marion County Prosecutor’s Office when she first tried Stockton’s cookies. Now, she is a 43-year-old mom. The long lunchtime lines and live music that once animated City Market are gone.

But Stockton's Snickerdoodle cookies and sweet tea still taste the same. Although Lamm-Krapf moved to Germany a decade ago, it’s tradition for her family to stop by Just Cookies every summer and winter when she returns to Indianapolis to see her dad.

“You come here and it’s like home,” Lamm-Krapf said.

A moment later, after considering the empty state of the market, she added, “It’s a really sad home."

Contact IndyStar reporter Ko Lyn Cheang at kcheang@indystar.com or 317-903-7071. Follow her on Twitter: @kolyn_cheang.

This article originally appeared on Indianapolis Star: Indianapolis City Market will close for renovations, change management