After three years of going back and forth in court with a small group of neighbors, developers have been given the go-ahead to build a 255-space parking garage hidden inside an apartment building next to the Athenaeum and Rathskeller — and construction is expected to begin this summer.

The City-County Council Monday night approved the project developer's request for $7 million in tax financing.

The dual-location project, Block 20, is expected to be finished by late summer of 2020.

The six-story, 67,791-square-foot mixed-use development at 428 N. East St. is the site that has received most of the attention, but the project also includes a 57,300-square-foot redevelopment of two existing buildings in the 600 block of North Park Avenue. The North Park development would become office and retail space. Together, the projects are estimated to cost $40 million.

Project was the focus of a 3-year fight

The approval comes to the chagrin of a group of nearby neighbors, led by attorney and neighbor James Gilday, who have been fighting the project for more than three years. The group filed a lawsuit in 2017 in Marion Superior Court to overturn a decision by the Indianapolis' Historic Preservation Commission to recommend approval of financing.

In the lawsuit, eight residents from the Lockerbie Glove Co. condominiums expressed concerns the Block 20 project would increase noise and cause more traffic and the land wouldn't be used properly under the neighborhood's zoning or historic ordinances. There was also some concern, Gilday said, that the structure around the garage would be, in actuality, a hotel under the guise of "turnkey" apartments.

When the Indiana Court of Appeals sided with the Historic Preservation Commission, Gilday and his clients elevated the case to the Indiana Supreme Court, which in October declined to hear it.

In April, Gilday sent a letter to City-County Council member Maggie Lewis that called into question the character of project developer Daniel C. Jacobs and urged the city to reject Jacobs' request for financing.

Lewis declined to hear Gilday's statements that Jacobs used sexist, profane and belligerent language toward him, co-workers and one of his clients, a resident in the Lockerbie Glove Co. condominiums, in email, text messages and in person at the council's Metropolitan and Economic Development Committee in late April. He reached out in early May to request the council again reject Jacobs' request.

Project will benefit struggling Athenaeum

The land adjacent to the Athenaeum is own by the Athenaeum Foundation, which would sign a 99-year lease for the parking garage and sell the plat of land immediately surrounding the garage to Jacobs for the development.

The city would receive 20 percent of the new tax revenue, and 80 percent would go toward the tax bonds for the first 25 years. After that, the city would get 100 percent of the tax revenue from the project.

The design of the future development would complement the aesthetic of the 125-year-old Athenaeum building, which houses a YMCA, theater space and Rathskeller restaurant. A nearly 6,000-square-foot restaurant will open on the ground floor of the Block 20 development, but developers are still in negotiations with potential tenants.

The 76 apartment units will wrap around the parking garage, sitting flush with the structure. A portion of the 255 parking spots will be reserved for the apartment dwellers, but 180 would be paid public spots.

The high-end apartments range in size from a 420-square-foot studio to 980-square-foot two-bedroom units. They would come furnished and waste little space, with micro-kitchens and convertible furniture like beds that turn into home offices, floating closets and collapsible tables.

Call IndyStar reporter Amy Bartner at 317-444-6752. Follow her on Facebook, Twitter, and Instagram.