A massive series of developments that have been discussed for years between Beacon Health System, the city of South Bend and Great Lakes Capital are officially moving forward.
On Thursday, South Bend’s Redevelopment Commission unanimously approved the $150 million project that the city is dubbing the "Madison Lifestyle District."
The development area will see major construction to the two blocks south of Memorial Hospital along Michigan Street. In the place of surface parking lots, the project calls for 240 housing units, a 100-bed hotel and 40,000 feet of retail space.
“This is a transformational project. It’s going to help facilitate hundreds of good-paying jobs, help facilitate a lot of investment,” said South Bend Mayor James Mueller.
Mueller likened the Madison district as a full-circle moment for South Bend following decades of urban blight following the collapse of Studebaker manufacturing.
“The downtown losing buildings and all of that occurred. Here we are moving back into urban development and the highest and best use of prime land at the center of your city," he said.
Project details
The new endeavor entails a series of interconnected construction projects that are all spurred by Beacon’s new $230 million investment into a new patient tower.
Beacon is privately funding all of that project, and Memorial Hospital President Larry Tracy said the initiative will create close to 500 new jobs and will likely bring even more people into the core of South Bend for medical treatments.
“To be able to have a hotel in very close proximity to our campus is very supportive to be near their loved ones while they're receiving care,” Tracy said.
As a way to meet the current and anticipated demand for housing that the new Beacon employees bring, South Bend partnered with Great Lakes Capital to develop the Madison district.
Great Lakes Capital is already heavily involved in the area with the Grandview Development off of Gumwood Road in Granger and company principal Audra Sieradzki said the housing is the linchpin of the developer’s investment.
“We feel the residences are the key to this Madison Lifestyle District development,” Sieradzki said.
Of the 240 housing units, at least 20% will be marked as workforce housing in terms of rental pricing.
Great Lakes Capital is buying the land from Beacon for $1 and is now required to invest at least $102 million into developing the properties. The city is contributing $24 million in council-approved bonds and state READI grants are contributing just under $12 million.
As stipulated in separate deals with the two private entities, the city is committed to building two public parking garages that will total 925 spaces, though 300 of which will be reserved for Beacon staff. Some work on the parking lot could get started this year, though the lots and the majority of construction on the new mixed-use development is targeted for 2025 and 2026.
The ripple effects of the massive deal will also change the landscape of downtown South Bend beyond the building site.
As part of the deals approved Thursday, the city is paying Beacon $4 million for the Leighton Plaza building on Main Street. The hospital will move its physical therapy operations out of that space over the next year.
South Bend will also buy the Wayne Street parking garage from Great Lakes Capital for $2.75 million, which the city’s Director of Community Investment Caleb Bauer said is meant to allow Great Lakes to focus their financial resources on the larger development project on the north of downtown.
The northern block of construction could be completed by 2026 and the whole project likely wouldn’t be finished until potentially 2029. This year, the city will demolish the South Bend Medial Foundation building off Lafayette Boulevard nearby to pave the way for more parking and do other prep work for the site.
Redevelopment board members had no questions about the deals. Commission member and city councilor Troy Warner said city staff has been in communication for months about the project.
“This is really exciting. This is historic,” Warner said. “I think really you have the chart that’s begun the dominoes falling on a return to the roaring 20s in terms of development in the city of South Bend.”
