It’s back to the drawing board for one of Indianapolis’ most ambitious and elusive downtown redevelopment projects.
TWG Development’s $248 million plan to redevelop old City Hall is dead, Department of Metropolitan Development Director Megan Vukusich confirmed to IndyStar April 13.
The initial blueprints called for an overhaul of the former City Hall building at 202 N. Alabama St. that would have transformed the 116-year-old structure into a 21c museum hotel and art gallery. Next door, TWG planned to build a modern 29-story skyscraper with more than 200 apartments and condos, a parking garage and mixed-use office and retail space.
TWG recently asked to drop the old City Hall property and instead focus on just the residential tower, which DMD agreed to allow, Vukusich said.
Vukusich said the city laid out terms and asked TWG to sign the agreement by April 2. That deadline came and went without a signature, killing this iteration of the project. The city will now seek a new developer.
“Unfortunately, due to the timeline we were looking at and since we’ve already been at it for three years and our constraints, we thought it would be best to open it up and see what we could do,” Vukusich said.
The cancellation, first reported by the Indianapolis Business Journal, represents a stark change from the city’s public stance on the project a month ago. Asked for an update on the project’s status, a DMD spokesperson told IndyStar on March 12 that the city and TWG were “working closely” to “push the project forward.”
TWG Vice President of Market Rate Development Chase Smith said on March 11 that the Indianapolis-based developer was working with city employees daily to move the project forward. At the time, Smith said they hoped to break ground by the end of this year.
Smith declined to comment April 13 when reached by IndyStar. TWG CEO Tony Knoble did not respond to requests for comment. In previous interviews and public hearings, Smith said the developer was running behind schedule because of financial difficulties and other hurdles.
Old City Hall deal falls apart as costs balloon
Indianapolis Mayor Joe Hogsett has been touting the old City Hall project since August 2023 when he announced the city selected TWG to move ahead with the redevelopment.
An IndyStar/Mirror Indy investigation found that several Hogsett allies got paid to aid with the redevelopment of old City Hall over the years with no-bid contracts worth up to $1.5 million.
Get the backstory
When Hogsett first announced the project in August 2023, it was estimated to cost roughly $140 million. By the next year, that ballooned to $248 million as TWG ran into complications with historic preservation efforts. In March 2025, the city tried to push the project over the finish line with a $66 million bridge loan to help TWG cover the inflated cost. At the time, Smith attributed the soaring expenses to increased construction prices and higher interest rates.
The project’s failure comes after the city and state promised tens of millions of dollars in public incentives. Vukusich said the city had not distributed any of the financial incentives to TWG since the financing had not been finalized.
Asked to comment on the latest old City Hall news, Hogsett said in a statement, “I support Director Vukusich’s leadership and look forward to exciting progress to come for this historic and important site in downtown Indianapolis.”
DMD plans to put out a request for proposals by the end of May, seeking a development partner with a portfolio that shows experience with historic preservation and large projects in a downtown setting, Vukusich said.
“Due to the unique nature of the downtown building,” Vukusich said, “we want to leave the door open to creative proposals.”
Local leaders said they’re disappointed to lose a development that would have brought more tourism and housing to fill a gap between Mass Ave and Monument Circle, two of downtown’s most vibrant areas.
Meg Storrow, the Mass Ave Cultural Arts District president, said she’s particularly disheartened to lose the 21c hotel and art museum, which would have complemented the corridor’s artistic offerings.
“It’s such a shame. The City Hall’s been vacant for so long, but it’s such a wonderful building,” Storrow told IndyStar after learning the news. “It would be such a nice bridge between Mass Ave and downtown. Right now it’s such a vacant area.”
City struggles to fill gap between Mass Ave, Monument Circle
The future of old City Hall, which housed city workers until 1962 when the City-County Building opened, has been in limbo for a decade now and stumped multiple mayors.
A 2015 deal crafted during Mayor Greg Ballard‘s administration to repurpose the site into a 21c hotel fell apart two years later because the hotel could not work out the funding, officials said at the time.
Knoble told IndyStar in 2023 that this time, the hotel was more likely to come to fruition because TWG had already inked a deal with Louisville-based 21c. The hotel chain did not respond to a request for comment.
Since 2016, the four-story limestone building has sat vacant, taking up a prominent downtown block. The adjacent parking lot remains roped off from public use. The building served as a home for the Indiana State Museum from 1967 to 2002 and the Indianapolis Public Library from 2002 until 2007.
Old City Hall was envisioned as part of a $9 billion downtown development spree, including the new $650 million Signia by Hilton hotel set to open this fall, the $120 million redevelopment of the Cole Motor campus and a $175 million renovation of City Market.
Although losing the City Hall development is a blow, Visit Indy Executive Vice President Chris Gahl told IndyStar that more than 1,000 hotel rooms are set to open downtown in the coming months. Gahl said it’s inevitable that some projects won’t pan out in the area’s hot hotel market, which also features a new InterContinental and a coming Ritz-Carlton.
“While we’re disappointed 21c is not moving forward,” Gahl said, “we know that the market is constantly resetting itself for what is ultimately healthy in terms of the sheer volume of rooms that enter and open.”
Just south of old City Hall, the City Market redevelopment is also moving slower than expected after the city recently cut ties with the original developers.
The market’s vendor hall, closed since 2024, was originally supposed to reopen in 2026. Now that project won’t finish until 2028 at the earliest, after the city ditched developers Gershman Partners and Citimark in summer 2025. The city did, however, grant those developers an $18 million loan in September 2025 to help fund the conversion of the adjacent Gold Building from office spaces into more than 300 residential units.
In December, the city inched closer to revitalizing the market, signing on with The Hagerman Group to complete the Whistler Plaza renovation that will unearth the historic catacombs beneath the block. Hagerman hopes to break ground by summer, Vukusich said.
This article was written by IndyStar reporters Alysa Guffey and Jordan Smith.