New owners plan to demolish Caribbean Cove, build new 7-story hotel

Guests enjoy Caribbean Cove Indoor Water Park in December 2004

The new owners of the former Caribbean Cove Indoor Water Park and hotel plan to demolish the abandoned structure to build a seven-story hotel in its place.

Drury Development Corporation, the privately-held development arm of the Drury family, has purchased the 10-acre property at 3850 Depauw Blvd. on the northwest side and plans to invest $13 million to knock down the building to make room for a 180-room hotel.

Drury's proposal and request for a nine-year property tax abatement from the city was approved during Wednesday's Indianapolis Department of Metropolitan Development meeting.

"The redevelopment of this key intersection will be a catalyst to help spur future development," said Emily Mack, Director of the Department of Metropolitan Development. "As Central Indiana continues to grow and evolve, attracting a diverse mix of visitors, convention-goers and corporate headquarters, this type of project is critical in order to keep Indianapolis competitive."

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After the water park and hotel closed in late 2017, Drury Development bought the property in January for $4.7 million. Drury Development has proposed demolishing the old building by the end of 2018 and opening the new hotel by 2022.

There are no plans to incorporate an indoor water park into the new hotel.

Officials said the new hotel would create 30 new jobs at an average wage of $13.22 per hour, according to the company proposal.

"In addition to the two hotel projects, Drury also intends to develop up to three retail or office outlots on the subject site," the proposal said.

The company also plans to invest $400,000 to renovate an existing Drury Inn located across the street from Caribbean Cove at 9320 N. Michigan Road. That renovated hotel would be rebranded as a Pear Tree Inn. The Pear Tree Inn would not be subject to abatement.

According to documents filed with the proposal, city planning staffers estimate the $13 million investment should result in an increase to the tax base of slightly more than $21.8 million of assessed value.

Drury would save about $2.8 million in property taxes over the life of the tax abatement period while paying an estimated $2.3 million in real property taxes. 

After the abatement period expires, the company would pay an estimated amount just under $600,000 annually in real property taxes, in addition to more than $31,000 in annual taxes currently levied on the land value of the property.

"Staff believes this project is significant for Pike Township in terms of new taxes and potential job creation and retention," the filed staff analysis said. "Furthermore, staff believes the petitioner's project will lead to continued future investment and development in Marion County."

Call IndyStar reporter Justin L. Mack at 317-444-6138. Follow him on Twitter: @justinlmack