A stretch of South Capitol Avenue just below downtown Indianapolis is about to get busier. On Oct. 6, The Annex Group held a ceremonial groundbreaking for Central at Old Southside, a $71 million affordable apartment community at 1406 S. Capitol Ave.
The Fishers-based developer is putting up two four-story buildings with elevators on a little more than six acres. Together they'll hold 227 one-, two- and three-bedroom apartments for households earning between 50% and 60% of the area median income. According to the company's announcement, the buildings will eventually carry the addresses 150 and 160 Southside Place.
"As an Indiana-based company, it's always deeply rewarding to develop in our own backyard," said Ryan Clark, senior vice president of development for The Annex Group. "With Central at Old Southside, we are transforming an underutilized infill site into an amenity-rich community."
This will be Annex's third community in Indianapolis.
What's going up
Annex CEO Kyle Bach described the plan as "two four-story buildings with elevators and plenty of outdoor and indoor amenities like modern, functional kitchens and in-unit washers and dryers."
Every apartment gets a full kitchen and its own washer and dryer. The company's list of shared amenities includes a community center, fitness center, business center, dog park, garden area, playground and picnic area. Merchants Capital, the project's permanent lender, describes the buildings as garden-style and adds computer, community and library/reading rooms, plus a courtyard with picnic tables and grills.
The rents are set unit by unit. Merchants Capital says 10 apartments will be restricted to families at 50% of AMI and the other 217 at 60%.
BVH Architecture is the architect and CEC is the civil engineer. Impact Housing Indiana Corp., a group that supports residents in Annex communities, is also on the team. Neither Annex's announcement nor the lender's release names a general contractor, so anyone hoping to bid on this one will need to start with the developer.
How it's paid for
This is a textbook 4% tax credit deal, and the capital stack is worth walking through.
- Bonds and credits. The Indiana Housing and Community Development Authority provided $33.5 million in tax-exempt bonds, which come paired with 4% low-income housing tax credits.
- Soft money. IHCDA added $500,000 in soft funding.
- Construction money. Bank of America is both investor and construction lender, with about $30 million in total equity and $53 million in construction financing.
- Permanent debt. In its Oct. 13 release, Merchants Capital said it secured a $30.7 million cash-backed Freddie Mac Forward TEL loan. Annex's announcement put the permanent debt at "more than $30.75 million," so call it roughly $31 million.
- Tax relief. The City of Indianapolis awarded a 15-year PILOT, or payment in lieu of taxes, agreement.
Merchants Capital says construction begins this year and is expected to wrap up in 2028.
"The addition of more than 200 affordable homes will make a meaningful and lasting impact in the Old Southside neighborhood, where the need for quality, affordable housing remains significant," said Nick Miller, assistant vice president of originations at Merchants Capital.
There's also a workforce piece. Annex is partnering with the McKenzie Center for Innovation and Technology through Annex University, a program the company launched earlier this year to offer hands-on training and career development. "As development progresses, we're proud to engage with and offer opportunities for career advancement to people living in surrounding neighborhoods as well," Bach said.
Why it matters for Contractors
Two four-story elevator buildings with 227 apartments is a big, steady job on the near south side, and with completion targeted for 2028, it should keep crews busy for the better part of two years. That means work for site and utility contractors, concrete, framing, roofing and exterior crews, and every MEP trade, plus elevator installers. Inside, 227 full kitchens and 227 washer-dryer hookups add up to a lot of cabinets, countertops, plumbing and electrical. The amenity list, from the dog park and playground to the courtyard and garden, means landscape and hardscape work, too. No general contractor has been named publicly, so subs who want in should reach out to The Annex Group and keep an eye out for bid packages. Annex's training push with the McKenzie Center also suggests local hiring will be part of the conversation.