By John Fritze
The Indianapolis Star

Indianapolis officials approved a deal Wednesday to bring a 23-story luxury hotel to Downtown's Circle Block -- advancing one of the city's most prestigious and, at times, troubled redevelopment efforts.

The $100 million project, which will include a 243-room hotel, 18 condominiums -- some priced at more than $1 million -- and 30 apartments on the corner of Washington and Illinois streets, comes after nearly a year of negotiation with two local developers.

"This puts the city on the map as far as having a five-star hotel," said Bob Clifford, executive director of the Indianapolis Bond Bank, which will help finance the project. "We've had a lot of interest in the business community for an upscale hotel like this."

The development is expected to be one of the largest in Indianapolis since the $183 million Conseco Fieldhouse opened in 1999.

Construction of the Conrad hotel, part of the Hilton chain, could begin as early as March. The hotel, where rooms would cost in the $175-to $200-a-night range, could be open by 2006, the developers said.

The city's Metropolitan Development Commission approved the deal Wednesday, but the city's involvement -- which includes $24 million in financial support -- still must be approved by the Democrat-controlled City-County Council.

Part of the city's financing package, which will be paid for with parking lot revenue, includes a $3.75 million equity investment that will return 8 percent of the project's profits to the city.

The proposal likely will be introduced at the council's next meeting, on Monday.

Democratic City-County Councilman Steve Talley, chairman of the Metropolitan Development Committee, said the project will change both the look and the finances of the city.

"It's going to have a dramatic impact on the skyline of the city, but, even more important, it's going to mean $7 million in property tax revenue over the next 10 years," Talley said.

Currently, the lot is being used as a park and generates no property tax, city officials said.

Steve Campbell, a spokesman for Mayor Bart Peterson, said the administration supports the project.

The city has struggled for years to develop the site, which formerly housed the Roosevelt Building.

An earlier plan by developer Barrett & Stokely for a 25-story apartment building fell through two years ago because of financing problems.

Executives with the current developers -- Kite Companies and Mansur Real Estate Services -- said they did not believe financing will be a problem this time.

"We've got a preliminary financing commitment that is very solid," said Chuck Cagann, Mansur's president. "We've come an awful long way with this."

Operations will be handled by Conrad Hotels, which operates the Waldorf Towers Hotel in New York and is currently building a second hotel in Miami.

The tower will include retail space on the first floor facing Illinois Street, but developers could not say which businesses will locate there.

The development will include a renovation of two buildings just east of the planned hotel to create 30 one- and two-bedroom apartments ranging from 700 to 1,200 square feet each.

The rent, developers said, will be approximately $1 per square foot.

The other residential component, the condominiums, will occupy the top six floors of the Conrad tower and will come packaged with the amenities offered by the hotel -- including maid and concierge service.

Thomas McGowan, executive vice president at Kite, would not say what the average price for the condominiums would be but said that some will cost more than $1 million.