2 weeks Ago By DREW ZIMMERMAN [email protected]
BLOOMINGTON — The City Council approved a package of incentives to spur a $68 million redevelopment of the former State Farm headquarters in what promises to be one of the most transformative projects downtown Bloomington has seen in decades. The package includes a $1.4 million loan, annual payments of $128,000 for about 20 years and refunds on an array of taxes.
The request comes from United Equity Properties, who own the century-old, 13-story downtown building and wish to convert it into a mixed-use development comprising 183 apartment units, an upscale restaurant on the 13th floor and retail space on the ground floor. When UEP acquired the building in 2019, the intent was to add luxury apartments but after a lease agreement was signed with Keplr Vision for a portion of the building, it became too much of a challenge to renovate the space while there was a tenant. But after Keplr Vision vacated the building a few months ago, the stage was set to move forward with development.
Company CEO Justin Fern said there are a lot of moving parts to this project and he thinks everyone finally came together and reached an agreement. “It took some time but good things take time and I think this is a monumental night for the city of Bloomington,” Fern said. Construction is expected to begin Aug.
1 and run into 2027. Once work is complete, there will be 159 one-bedroom apartments, 13 two-bedroom apartments and 11 studio apartments. Monthly rents were not disclosed, but the developer promised that they would not increase more than 2.
5% per year for 10 years for all residents who renew their leases. “This is a commitment to mitigating the upward pressure of rent in a low-supply environment,” said Kelly Pfeifer, director of development services for the City of Bloomington. The project does come with several incentives for the developer, one of which could see UEP making another investment into downtown Bloomington.
Should the City of Bloomington not enter into an agreement with another developer for the former Coachman Motel property at 408 E. Washington St. within a year of the execution of this agreement, the site would be sold to UEP for $1.
The Coachman property, a now-vacant lot that has been targeted for multiple developments in the last few years, was last appraised at $490,000 in 2024. All administrative, permitting and plan review fees tied to the State Farm project would be waived. The city would agree to annually reimburse the developer for 60% of its 2.
5% home rule sales tax, 60% of its 1% retailers occupation tax and 60% of the food and beverage tax collected from any commercial businesses on the first or 13th floors. The city agrees to lend $1.4 million from its general fund.
However, this is contingent on the receipt of a $1.4 million state grant, which was meant to reimburse general fund expenditures related to the acquisition of the city’s new public works campus . The city also would pay about $128,000, which is equal to the base amount of Bloomington’s downtown tax increment financing district, to the developer annually until 2047.
The developer would also execute a mortgage equal to five of these annual payouts to be placed as lien. Bloomington Deputy City Manager Billy Tyus said this is to ensure the city is protected in the event that there is a problem with the project. The city also would provide 30 parking passes to the developer for downtown parking locations.
These passes are valued at $50 per month for 20 years. This amounts to $360,000 through the life of the passes. Should the developer fail to pay any fees, taxes or other amounts due, the city shall withhold all incentives, payments and reimbursements due under this agreement until past-due amounts are paid in full.
Several members of the public spoke favorably about the agreement during Monday’s council meeting. Former Alderman Jamie Mathy, owner of Red Raccoon Games, urged the council not to stop its momentum of downtown development. He added that many developers want to see requests for proposals including such factors as walkability, income levels and other details about a target area.
“We’ve got to keep providing all those things to them, let them respond to those things and we can get the results that we want long term,” Mathy said. Mayor-elect Dan Brady said after the meeting that he was encouraged by what he had seen about the project. He also anticipated that negotiations were very labor intensive.
“I think the city compromised, I think that the developers and investors compromised, and that’s when you end up with a better product: when you compromise and work together,” Brady said..
