I just returned from a tour of 16 Tech near downtown Indianapolis, and I can tell you that this is a project that all of us should start paying a lot more attention to.
Tracing its roots all the way back to 2011, the development is nestled into the corner of where Fall Creek meets the White River, northwest of downtown and to the north of the IU Health, Riley, Eskenazi and VA hospital complex at IUPUI. It’s bordered on the north by West 16th Street, from which it gets its name, and the main gateway today is Indiana Avenue as it crosses over the canal towards the Northwest, though one of the project’s signature features is a new bridge over Fall Creek which will extend Wilson Street north from the Riley hospital entrance to the heart of the district.
The project got a significant boost in 2015 when the City of Indianapolis agreed to provide $75 million in tax increment financing to improve roads and reroute underground sewers and water supplies, a significant challenge as much of the southwest corner of the project was formerly the headquarters of Citizen’s Water. The beautiful neoclassical Riverside Pumping Station still stands as an above ground reminder of the complex works below.
The second major boost came in 2018 with a $38 million grant from the Lilly Endowment to fund the initial phase of development. That was key to developer Browning investing $120 million to construct three new buildings and renovate the old Citizens Water headquarters into a “maker space” for startups and more.
Those projects are well underway right now, and the results are already amazing. The most obvious development is “Building One” which topped out on July 11 of last year and was the focus of the “dusty boots” tour I took led by the energetic and delightful Bob Coy. He excitedly described to us the impending move of the units of the Central Indiana Corporate Partnership to the facility, including TechPoint, which serves my industry, as well as the relocation of the Indiana Biosciences Research Institute, the first organization to take root at the site back in 2012.
Speaking of other things we should all be paying more attention to, Bob was recruited from Cincinnati where he led the creation of CincyTech. Way back in 2001, civic leaders in Southwest Ohio realized that their future would be dependent on economic growth through technology, and in 2005, through engagement with entrepreneurs, venture capitalists, business and civic leaders and angel investors, determined that their startups were having trouble raising more than $750,000 in seed stage funding, knowing full well that $2 million is the more likely amount needed for success. One of the problems they also noted was the lack of availability of serial entrepreneurs.
What Bob and his team did was aggregate a fund-service model. They started with a grant from the Ohio Third Frontier, an organization not very dissimilar to our own Next Level Fund here in Indiana, which they used for operating expenses to form the team. Next, they aggregated investors from the private sector, first into CincyTech Fund I in 2007 at $10.4 million, which consisted of fairly small initial investments matched by the State of Ohio. They reopened the fund for investment in 2011 and gathered an additional $4.4 million, and then launched a 3rd effort in 2013 netting an additional $11.2 million. Boosted by a fantastic investment in one of their companies by Sequoia, a large, well-known VC marking their first-ever investment in Ohio, they were able to close a $30 million fund in March 2016, creating over $50 million in aggregate capital as a base for building a tech ecosystem.
Cleverly, they employed a co-invest model where the Fund would generally supply $500k into a deal, and work to bring other co-investors off the sidelines and into the project to build up to the $2M needed for a successful “A-round”. That made the fund a force-multiplier in bringing high net worth individuals off the sidelines and into the tech economy. Indiana desperately needs the same system.
Cincinnati’s loss is our gain, as Bob’s knowledge and experience is exactly what is needed right now. With his leadership and the support of multiple civic visionaries, 16 Tech has fought through countless “brownfield” challenges, and is about to prove the naysayers wrong by moving into a gleaming building which represents more than another technology project – it represents the spirit of Indiana entrepreneurialism leading the way into the future.
Read more at Inside Indiana Business.