“A lot of universities have replicated the structure we created with Notre Dame, which was really the first major university joint venture project of its kind,” McGowan says. “It’s been a model throughout the country. We agreed to a long-term ground lease with the university, which was priced off a percentage of revenue. That way, if the hotels, retail, and office space did poorly, the university received less of a percentage for the land. If they did well, the university got a higher percentage of revenue. Luckily, we’ve been incredibly successful and economically it’s worked well for both the university and us.”
After the first phase was completed, Notre Dame opted to lease most of the office space. The condos at Eddy Street Commons have appreciated in value and are in high demand, McGowan says.
“We were ready to push the second phase of the project and develop two more city blocks with the full support of the university when Pete Buttigieg was mayor of South Bend,” McGowan says. “He wanted us to generate jobs before another TIF would be considered, so we built a 164-room Embassy Suites hotel, which created the desired, well-paying jobs.”
In addition to the hotel, which has a rooftop view of the Notre Dame football field and campus, Kite built another 452 apartments and 10,000 additional square feet of retail space.
During the third phase, 28 townhouses were added to Eddy Street Commons, along with a Trader Joe’s grocery store and 4,000 square feet of additional retail space.
“The Trader Joe’s is monumental for our community and South Bend,” Sexton says. “The neighborhood and the students are thrilled to have it here and it was a missing piece for the development.”
Numerous restaurants and retail stores are part of the mix, but Sexton says students pushed hard for an Urban Outfitters store, which became one of the first retailers at Eddy Street Commons.
Community Partnerships
While Sexton didn’t work for the university in the earliest planning stages for Eddy Street Commons, he says that Kite has always embraced the model of working collaboratively with neighbors, the university, and city leaders—including three different mayors.
“Representatives from Kite, including Tom McGowan, have been at countless meetings over the years, listening to everyone’s concerns, getting feedback and modifying plans as needed,” Sexton says. “Kite understood how important it was to partner with residents in the Northeast neighborhood, and the city, to get a win-win for everyone.”
During the planning stages of Eddy Street Commons, Kite worked to address community member concerns, such as parking and building heights.
“That’s one reason we designed the big garage, to avoid cars spilling out into residential streets,” McGowan says. “Then we wrapped the garage in condos, so no one was looking directly at it.”
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