Dolphin House revisited: they’re turning it into apartments!

Two articles in a row that resuscitate topics from less than a year ago…am I losing my edge?  Maybe.  But when you’ve been hacking away at this for twelve years while using little more than social media to promote yourself (but swearing off Twitter and Patreon and Youtube), it’s hard to say what constitutes an “edge”.  If a topic draws above average interest and breaking news emerges, why shouldn’t I report it?  That’s precisely the case with the infamous Kessler Mansion (the Dolphin House) on Indianapolis’s far north side, which I featured just back in August.  I’m coming back to it because, after much deliberation and even more controversy, the City has decided to preserve it and convert it.

The Dolphin House has been a source of notoriety in Indianapolis for decades: back in the 1960s, a pimp-turned-construction-magnate purchased a humble three-bedroom ranch on the north side of Indy, in what at the time were the unincorporated outskirts, along Kessler Boulevard.  As he amassed a dubious fortune, Jerry “Mr. Big” Hostetler expanded upon this home, then purchased a neighboring lot, absorbed the home into his own burgeoning mansion, and continued to grow.  By the 1980s his estate expanded onto nearly four separate lots, and his opulent, garish tastes stretched across 26,000 square feet.  Size notwithstanding, the appearance was exactly what one might expect from someone who began his career managing prostitutes: bedrooms concatenate along seemingly arbitrarily placed stairwells, bizarrely shaped windows abound, and virtually all of the edges are rounded. Hostetler threw massive parties, where vehicles clustered in his elaborate driveway, festooned with fountains and sculptures of dolphins.  Only briefly married and having just one child who predeceased him, Hostetler lived his final years alone, increasingly struggling to pay debts or to maintain his absurd palace.  When he died in 2006, he bequeathed the Kessler mansion to his secretary, who was at a loss on what to do with the albatross.  She sold off many of Hostetler’s elaborate sculptures to keep creditors at bay (retaining most of the signature dolphins), but only allotted enough money for basic groundskeeping and preventative maintenance.

The house continued to deteriorate while changing hands multiple times,  One buyer, Chad Folkening, invested heavily on repairs in the early 2010s in an attempt to rebrand it as an AirBnB property, but didn’t find much success.  Folkening put it back on the market for $2.2 million in 2012.  The articles from that time period feature some of the best photos of the interior, captured shortly after Folkening’s considerable investments.  But it didn’t matter; Folkening had no choice but to slash the price multiple times.  Nobody wanted a home at odds with the exurban character of the area; despite having 11 bedrooms and 7 baths, it remained on a septic system the entire time.  People with the money wanted something with better taste and in a fancier area, like North Meridian Street or up in the suburb of Carmel.  Back on the market in early 2022, the asking price for the Dolphin House was $690,000, barely half its value according to Indianapolis tax assessments, and a meager $23 a square foot.  Then someone finally took the bait and bought this Midwest Xanadu, as I reported last summer.

But why should I bring up the Kessler Mansion again?  It’s pretty simple: the Metropolitan Development Commission just approved a rezoning that will allow a conversion to apartments—against all odds, and to the opposition of many neighbors.  The exact details on this highly contested municipal judgment are scant, but if it reflects the initial efforts from the new owners (Spann Alexander Reig LLC), the previous D-2 (dwelling) is gone.  D-2 supported single-family detached housing at a fairly low density, which characterizes all the other homes nearby, mostly built in the late 1940s and early 1950s.   By contrast, the new zoning is a significantly less restrictive D-P (planned development), basically akin to a Small Planned Unit Development (SPUD), a specialized and highly limited zoning classification that enables the owner/developer considerable latitude in improving the land, customizing a mix of uses, densities, and legal tenancy.  The SPUD or its larger PUD typically only achieve approval in greenfield sites, where a developer proposes a mixed-use residential/commercial/retail or some sort of office park with unusual amenities.  Residential is nearly always a primary component, which is why many in the real estate industry consider a PUD synonymous with a “master planned community”.

Rezoning for D-P in an area dominated by single-family detached homes—and, as a result, enabling a multiunit apartment complex—has generated tremendous opposition among the Dolphin House’s neighbors, most of whom would be happy to see Hostetler’s folly razed.  The intention is to transform the sprawling physicality of home into ten high-end apartments: six with three bedrooms and four with four bedrooms.  Yes, that means a single home could support 34 bedrooms.  While I suspect some expansion and reconfiguration will come into play, it’s essential to remember that the Dolphin House stretches over what looks to me like 2.5 parcels based on the standard size for development at that time.  With ten units coming in, its density will be approximately four times that of anything else in the area.

The urban planner in me wants to support this concept.  Fundamentally, it is typically wiser to introduce greater density to urbanized areas, and the abutting four-lane road, Kessler Boulevard East Drive, can easily support a bit more traffic.  Indianapolis is by and large a low-density city, so any attempt to infuse density where it won’t prompt a road widening to accommodate traffic is probably a proposal that the City should at least consider.

But principles applied en masse don’t necessarily converge well with specific vignettes, and the Dolphin House is an example where applying the maxim “cities thrive on density” isn’t necessarily astute.  And it’s not just the matter of the septic system, though that’s certainly a launchpad for the argument.  (I’m confident that the conversion to a 10-unit apartment will force the developer to place the property onto the city’s wastewater system, at the very least.)  The reality is that Mr. Big found a way to devise his ill-fated white elephant by incrementally skirting planning and development laws: the merging of adjacent lots, the upgrades, the expansions all occurred gradually over many years.  Even if his business practices were dubious at the best times, it’s quite likely he never violated any zoning or land development laws, as long as he didn’t encroach on any lot lines or setbacks, or surpass the maximum impervious coverage.  (Hostetler’s attitude toward building codes is another story; most of his stairwells lack railings.)

Essentially, the Dolphin House came into existence through deliberation and by deliberately avoiding ruffling feathers.  It’s likely that, had he pursued a more aggressive expansion path, Hostetler would have prompted an investigation of the business practices that allowed him to afford such opulence.  But he built slowly, irritating his neighborhood without generating enough cataclysmic extravagance to prompt them to organize and mobilize against him.  He was just that kooky rich guy. Even while defending Hostetler’s incrementalism, it would have been little difference if he had proposed his estate outright by buying several properties simultaneously, razing them, merging the parcels, and constructing his huge home anew.  Equally legal from what he did; just far more likely to get neighbors to organize in opposition.  However, without homeowners associations—something the aging area is unlikely to have—the capacity for neighbors to coalesce remained scant as the Dolphin House swelled.

But there’s little evidence that Hostetler had a vision for his estate after his death, other than finding another owner-occupant.  That didn’t happen. As a result, it’s easy to conclude—as many neighbors no doubt do—that not only are apartments in contradiction with Hostetler’s intent, the means of getting there only opens the door for others to try the same.  If it weren’t for the fact that the Dolphin House sits on about three old parcels rather than one, this City approval and switch to D-P (planned development) would constitute the definition of spot zoning, granting an absolute, legally binding exception in use and intensity to a single parcel within a district, thereby undermining the reasoning for having districts in the first place.  Technically, it’s still spot zoning, since it’s basically just one lot after the mergers took place.  And it would have happened if Hostetler hadn’t gamed the system.

The City’s rezoning to allow the approval of apartments sends a signal: if anyone who does something weird and anomalous enough to their property that they can’t find a seller, an appeal to the Metropolitan Development Commission is all it takes to get it rezoned to something completely incompatible with the zoning district’s original intent.  Add enough fishbowl windows, stairwells to nowhere, and make it ugly enough, then either the original owner or the subsequent buyer can just kneel before the City and, with a stroke of a pen, the City will change the land use to make it more profitable.  Neighbors be danged.  It’s possible that Spann Alexander Heig will transform the Dolphin Mansion into a lovely series of apartments, but it’s still a multifamily outlier surrounded by single-family homes.  And the method by which it became apartments is ethically dubious if legally defensible.

I supposed it’s kind of neat in theory that a developer is preserving the Dolphin House, though time will only tell how much the redevelopment retains its meretricious façade.  That said, is the Dolphin House really that special?  As commenters indicated to me last time, Mr. Big may have been a larger-than-life figure in an unassuming Midwest city, but his type was a dime a dozen in other go-getter parts of the country. The New Jersey shore hosts at least a dozen Dolphin Mansions on a single 10-mile stretch of highway.  Plenty of other Americans engage in the sort of American ostentation that Indy’s northsiders have grudgingly contended with over the years.  To put it snobbishly, it’s a typical palace for the nouveau riche.  Frankly, the lack of distinction to the Dolphin House is only further reason to demolish it, with one simple caveat to the neighbors: it might have remained an oversized vacant lot for many years, and the next property owner almost certainly would construct something that doesn’t remotely look like a modest middle-class 1950s ranch.  At least with this conversion, nobody has to worry about Hostetler’s old home hosting a Midwest version of Celebrity Big Brother (which really was a proposal at one time).  I hope these apartments are everything the tenants imagine, as they get to live in Indy’s most notorious house.  Careful with those stairwells though. 

Thanks again to Mary Hasser for contributing the photographs.