NYC investors spend millions to modernize Pyramids

-New York-based investors are pumping in millions of dollars and luring new tenants to restore luster to an Indianapolis landmark office building, the Pyramids at College Park on the Northwestside.

Fred Wilpon, owner of the New York Mets, heads Sterling American Property Inc., which bought the three unique, 11-story, glass-and-concrete structures several months ago and has launched the renaissance of the 34-year-old complex.

Construction crews are currently renovating the dated lobbies, gutting the interiors to restore Class A office quality, reworking the heating and air-conditioning systems, renovating the 69 restrooms, repaving the 1,300 parking spaces and installing a conference center and caf.

Work begins soon to renovate the glass-and-suspension system forming the reflective southside wall of each of the buildings.

Real-estate brokers Darrin Boyd and David Moore of Colliers Turley Martin Tucker, leasing agents for the Pyramids, said the investment is paying off with new tenants in the buildings, which recently had a vacancy rate of more than 50 percent.

An announcement is expected within two months from Education Management Corp., based in Pittsburgh, about plans to open a post-secondary school of the arts, culinary trades, and hospitality at the Pyramids.

Executives of the publicly traded company disclosed plans to open a school in Indianapolis during a May 5 conference call with analysts.

While the company declined to disclose the precise location, a permit from the Indiana Commission on Post-Secondary Education shows that Education Management will open the Art Institute of Indianapolis at 3500 DePauw Blvd., the address of the Pyramids.

The art school is to be based on three floors in two buildings, making the school the largest tenant in the complex's 443,000 gross square feet of space.

Sterling bought the buildings and 45 acres for an undisclosed price from an Alaskan government employees pension fund. "The architectural significance of the Pyramids had a lot to do with our decision to buy the property," said Matt Harvey, Sterling's asset manager.

Sterling specializes in buying and renovating undervalued properties. Harvey said the Pyramids' price cut to a fraction of its replacement cost, in part because the property needed a lot of updating even though renovations were done in the 1980s and early '90s. The occupancy rate fell after the loss of anchor tenants including Resort Condominiums International that took up most of the 100,000 square feet in Pyramid 3.

Undeterred, Harvey said, "These buildings were world-renowned, and we are fans of great architecture. It is a rare opportunity to own and renovate such buildings."

Even on an unclear day, the Pyramids' silhouette is visible for miles along the north leg of I-465 near Michigan Road on the city's Northwestside.

The buildings were treated like an eighth wonder of the world when they were constructed in 1971 by Indianapolis business leader John W. Burkhart to be the headquarters for his College Life Insurance Co. of America.

Ownership changed hands several times ending in a sheriff's sale in 1990, then a $3.6 million face-lift. College Life was sold, and the headquarters moved from the Pyramids.

The Pyramids, which were frequently photographed, featured on postcards and on television shows, had already become an icon of architecture in the Midwest.

While the complex's primary architect is pleased with its resurgence, he's not happy with all of the changes -- particularly not the lighted signs that now grace two of the buildings' once blank walls and advertise anchor tenants Indiana Tech and Bluegreen.

"I think it's a shame if they have to put signs on them," Kevin Roche said.

Roche said Burkhart's master plan envisioned up to nine identical pyramids, linked by third-floor walkways and underground tunnels and totaling over 1 million square feet. "John was interested in building an expandable headquarters," Roche said.

But there was never enough demand for the additional office space and the project stopped with three.

The inspiration for the pyramid shape was as much practical as aesthetic, he said. "The idea began with the hierarchical system in business at the time, putting large numbers of people on the lower levels and moving up to the (executive) levels at the top," he said.

The Pyramids is riding a wave of development along nearby Michigan Road that forms the western boundary of College Park.

Developers acknowledged the area dotted with about a dozen hotels and countless restaurants, fell on hard times. A three-year road-construction project hurt many businesses.

Real-estate brokers say several national restaurant chains including Cheeseburger in Paradise and others are now scouting locations in the Michigan Road corridor south of I-465.

A 93-acre site southwest of the interchange is for sale, and national-level developers are quietly proposing shopping centers and hotel complexes on the site.

Big-box retailers also have discovered the Michigan Road corridor. Costco opened a large store at 9010 Michigan Road three years ago.

And Mark Pearlstein of Linder Co., real-estate leasing agents, said negotiations are under way for redevelopment of a long-vacant Kmart.

"The area has been undergoing some changes, but the road construction is finally stable," he said.

Just north of the I-465 interchange, Indianapolis-based Duke has West Carmel Marketplace under construction at 9900 Michigan Road.

Duke vice president Cindy Schembre said the plans include about 400,000 square feet of retail and restaurant space with the first shops to open before Christmas.

Employees at Pathfinders Corp., a continuing education provider in the insurance and securities industries, have enjoyed the view from the 11th floor of Pyramid 1 since 1979, making the company one of the longest-running tenants.

"Working in a landmark is wonderful," said Mac Spears, vice president of Pathfinders, while enjoying the view of the Downtown Indianapolis skyline from 10 miles away.

"Everybody told (John) Burkhart that he was nuts for building out here, because it was so far from (the other insurance company headquarters) Downtown. In fact, it was visionary."

THE PYRAMIDS AT COLLEGE PARK:

-- Location: 3500 DePauw Blvd. in the College Park area southeast of Michigan Road and I-465.

-- Owner: Sterling American Property Inc.

-- Height: Each of the three pyramid office buildings is 11 stories tall.

-- Size: The three buildings contain a total of 443,852 square feet including lobbies, halls and underground levels, passageways and loading docks.

-- Land: Building and 1,300 parking spaces on 16.99 acres; 24.9 acres of lake; 3.17 acres of woods; property totals about 45 acres.

-- History: Built in 1970-71 as the headquarters of College Life Insurance Co., the complex cost a reported $15 million.

"In the state and in Hampton Roads, the economy is still holding up pretty well," Mezger said.