Rising 38 stories over Pan Am Plaza, the Signia by Hilton Indianapolis is about to become the tallest hotel in the city — and one of its most valuable buildings that will never appear on a property tax bill. The 800-room convention headquarters hotel is owned by the City of Indianapolis, and government-owned property is exempt from Indiana property tax. Next door, the Indiana Convention Center's 143,500-square-foot expansion, anchored by the state's largest ballroom, is likewise publicly owned and untaxed.
None of this is a scandal. It is a deliberate public-finance strategy with real logic behind it. But for the private owners who do pay downtown property taxes — and, inside the Mile Square, the Economic Enhancement District fee on top — it is worth understanding how much marquee downtown real estate sits off the taxable rolls, and what that means for everyone still on them.
The Project, in Verified Numbers
The Signia began as a private development: Kite Realty Group was slated to build the hotel as part of the Pan Am Plaza redevelopment, but had difficulty securing financing in the private market. In 2023 the city stepped in to own and finance the hotel itself. The City-County Council approved the financing package by a 20-5 vote — all 19 Democrats plus independent Ethan Evans in favor, the council's five Republicans against — authorizing up to $625 million in municipal bonds for the $510 million project.
Critically, those are revenue bonds, leveraged against the money the hotel itself generates, not against existing or new tax revenue. Hilton will manage the property; the city owns it.
The convention center expansion is a separate but connected piece. In October 2020, the city approved a bond package of more than $150 million — covering roughly $125 million in construction costs plus financing costs and capitalized interest — to be repaid with downtown tax increment financing (TIF) funds. The city later allocated another $25 million from the downtown TIF district to acquire the expansion's basement level from Kite, and the Capital Improvement Board (CIB) approved up to $50 million from its own balance sheet to cover inflation-driven cost growth. At groundbreaking, the combined hotel-plus-expansion project was described as an $800 million undertaking.
As of late June 2026, the hotel has topped out at 38 stories and is anticipated to open in fall 2026, with reservations already available for stays beginning February 1, 2027. The expansion — including the 50,000-square-foot Grand Ballroom, the largest in Indiana — is targeted for completion on a similar timeline. Once connected, downtown will offer 12 skywalk-linked hotels and more than 5,200 connected rooms.
Why None of It Pays Property Tax
Indiana law (IC 6-1.1-10) exempts property owned by the state and its political subdivisions from property taxation. A city-owned hotel, a convention center owned by a municipal corporation, a stadium owned by a county board — all of it is off the rolls, regardless of how commercial the activity inside looks.
The Signia joins a substantial portfolio of exempt public real estate already concentrated downtown. The Capital Improvement Board of Marion County alone owns or operates:
| Facility | Use |
|---|---|
| Indiana Convention Center | Conventions and trade shows |
| Lucas Oil Stadium | NFL stadium, major events |
| Gainbridge Fieldhouse | NBA/WNBA arena, concerts |
| Victory Field | Minor league ballpark |
| Virginia Avenue Parking Garage | Parking |
| Hudnut Commons | Public space |
Add the City-County Building, the Statehouse complex, federal courthouses, state office buildings, university property, and hospital campuses, and a meaningful share of downtown Indianapolis's most prominent square footage generates zero property tax. The Signia — a brand-new, high-rise, revenue-producing hotel — is simply the newest and most commercially flavored addition to that list.
Note
Exempt does not mean revenue-free. The Signia's guests will pay Marion County innkeeper's tax, food and beverage tax, and state sales tax, and the hotel's revenues service the bonds. The exemption is specifically from the property tax levy that funds schools, libraries, and city services through assessed value.
What About PILOTs?
A payment in lieu of taxes (PILOT) is a negotiated payment an exempt owner makes to approximate some portion of the property tax it would otherwise owe. Indiana law (IC 36-3-2-10) authorizes the consolidated city and county to impose PILOTs on certain public entities, so the tool exists in the statute.
In practice, the city's active, publicly documented PILOT program is aimed at affordable-housing multifamily developments, which trade a property tax exemption for negotiated payments. We found no announced PILOT arrangement covering the Signia hotel or the convention center expansion. The financial commitment the city made instead was structural: revenue bonds repaid by hotel operations rather than by taxpayers.
The Tax-Base Math for Everyone Else
Here is the analytical core. Property tax in Indiana is a levy-based system: taxing units set budgets, and rates are calculated by dividing the levy across the taxable assessed value. When a half-billion-dollar asset is built exempt, it adds nothing to the denominator. The levy gets spread across the taxable AV that remains — which downtown means the privately owned office towers, hotels, garages, and retail buildings that are already under pressure.
That pressure is not hypothetical:
- Office values are still soft. Mile Square office assessed values have fallen roughly 30% from their 2021 peak, as we documented in our Mile Square commercial recovery report. The taxable base downtown has been shrinking while the exempt base grows.
- The EED fee adds a second layer. Commercial owners inside the Mile Square pay the Economic Enhancement District fee of 0.168% of gross assessed value on top of property tax — and government and exempt parcels are not assessed the fee. A city-owned hotel competing for the same downtown visitors contributes to neither line.
- TIF captures much of what's left. The convention-portion bonds are repaid from the downtown TIF district, meaning increment generated downtown flows to project debt rather than to the general distribution. How TIF capture works — and when districts finally release value back to the base — is covered in our TIF explainer and our look at Marion County TIF district expirations.
Warning
Privately owned downtown hotels raised exactly this concern when the city took over the Signia: a publicly owned competitor pays no property tax and no EED fee, while they pay both. Whatever the convention-business case — and retaining events like Gen Con and FFA carries genuinely large economic stakes — the burden-sharing asymmetry is real and measurable.
The counterargument deserves a fair hearing: the hotel stalled as a private development when Kite could not secure financing, the bonds put no direct claim on property taxpayers, and a fuller convention calendar supports the restaurants, garages, and hotels that are taxable. Both things can be true. The project may grow downtown's economy while simultaneously narrowing the share of downtown real estate that funds local government through assessed value.
What Downtown Owners Should Do About It
You cannot appeal the existence of the Signia. You can make sure your own parcel isn't overpaying into a shrinking taxable base:
- Check your assessment against the market. If exempt competition and soft demand are weighing on your income, your assessed value should reflect it. Pull your parcel in our Marion County explorer and compare against similar properties.
- Remember the EED multiplier. Inside the Mile Square, every $1 million of AV reduction saves roughly $1,680 a year in EED fees on top of the tax savings at the 3% cap.
- Watch the fall installment. The second half of 2026 bills — tax and EED fee alike — comes due November 10, 2026.
Our property lookup tool surfaces assessed values, classifications, and comparables in one place, and our tax appeal service builds the evidence package if your value is out of line. In a downtown where more of the skyline pays nothing, the parcels that do pay should at least pay on accurate numbers.