Potential affordable housing encore for Kohr hospital building takes another step

The aerial photo of the Kohr Administration Center is from the Pictometry module of Monroe County’s online property lookup system.

At its regular Monday meeting, Bloomington’s redevelopment commission voted to greenlight the formalization of a deal with a potential affordable housing developer for the Kohr Administration Center building, which is a part of the IU Health hospital on 2nd Street.

The potential developer is a group represented by Brinshore Development, Bloomington Housing Authority, and Springpoint Architects, Bloomington’s director of economic and sustainable development Alex Crowley told RDC members on Monday. [Added April 22, 2021 at 9:23 a.m. Rottman Collier Architects is the co-architect in the project group.]

The city of Bloomington will be getting control of the Kohr building in the context of a $6.5 million real estate deal, which calls for Bloomington to take over the whole hospital property on 1st and 2nd streets in 2022. That will come after IU Health moves operations in late 2021 to its new facility, which is currently under construction on the SR-46 bypass.

The question of formalizing a Kohr building deal was put to the RDC, because it’s the public entity responsible for approving tax increment financing (TIF) district funds, which are being used to purchase the hospital site from IU Health.

The RDC’s approval to go ahead and draw up a formal arrangement, will put the group in a position to meet this year’s July 26 deadline for an application to the federal low-income housing tax credit (LIHTC) program, to help finance the project. Awards through the program are due later in 2021, Crowley said.

The LIHTC applications process is very competitive, Crowley told the RDC on Monday, so it’s not “preordained” that the tax credits will be awarded. But Crowley said that the selected group—out of six respondents to the city’s request for information (RFI)—is “well positioned to take advantage of the scoring of that process.”

Once the formal arrangement is drawn up, Crowley said, the details of the project will get dialed in.

One of those details includes supportive housing. Crowley said, “One of the aspects [of the selected group’s proposal] that we liked is that there is a set-aside of units for permanently supportive housing for the unhoused.” He added that the proposal includes baked-in supportive services for those units.

As far as the number of units, Crowley said, there is a unit count, around 40 to 45 units, above which it becomes inefficient to go higher, given the amount of funding that’s available.

Crowley described the income range for tenants of proposed Kohr housing units as towards the lower end of the typical HUD area median income (AMI) range. In HUD terms, a low-income family does not exceed 80 percent of AMI.

The redevelopment of the Kohr building as affordable housing will include the construction of an addition, making the total footprint bigger.

The Kohr building dates to the early 1900s. In early February, Bloomington’s city council voted unanimously for the historic designation of the Kohr building.

The thumbs-up from the city council on the Kohr building meant that it joins the parking garage as one of the buildings on the hospital site that IU Health will not demolish, before it hands over the facility to the city of Bloomington in the $6.5 million real estate deal.

Responding to a question at Monday’s RDC meeting, about the possibility of funding based on the building’s historic status, Crowley described the federal historic preservation funding that might be available as possibly a “double-edged sword.” It’s not clear if that would make sense in a case like this, Crowley said, but every rock would be turned over, looking for available funding.

At Monday’s RDC meeting, Crowley described the process used to select the potential developer of the site. An RFI was issued on March 1, to seek development partners for the adaptive reuse of the Kohr building. Responses to the RFI were due on April 5, Crowley said. Crowley called the six responses received by the city “a good, robust response.”

Crowley described the range of the six responses as “all over the spectrum.” He added, “Some were focused on workforce housing, some on senior housing, some on a kind of generic, affordable housing approach. Some had more market rate.”

At an April 13 meeting of a steering committee, Crowley said, the six responses were winnowed down to three finalists. Crowley said the steering committee included members of city staff—from the economic sustainable development department, the housing and neighborhood development department (HAND), historic preservation, and planning and transportation.

The steering committee also included a handful of external non-staff representatives, Crowley said. Non-staff included: city councilmember Sue Sgambelluri; John West (who represented the hospital reuse steering committee); redevelopment commissioner David Walter; and Josh Scism with Core Planning Strategies, the project manager for the hospital site redevelopment.

The three finalists were invited for interviews, Crowley said, which took place at the end of last week. From the interviews emerged the preferred group’s proposal, which was the one that included Brinshore Development.

On Monday, RDC president Nick Kappas clarified with Crowely that the next step will be for an actual resolution and a document to be put in front of the RDC for approval at a meeting in the near future.

The election of Kappas as president of the RDC came as Monday’s first order of business. Former president Don Griffin resigned from the RDC so that he could serve as deputy mayor, replacing Mick Renneisen.

Griffin’s spot on the RDC was filled by the mayoral appointment of Deborah Hutton, who previously served on the historic preservation commission (HPC)—when the Kohr building was recommended by the HPC to the city council for historic designation.

Friday marks the last day of Renneisen’s more than four decades of service to the city.