Bloomington fills in Madison Street gap parcel for hospital redevelopment site

A roughly tenth-of-an-acre lot at 605 S. Madison St. was approved for purchase by Bloomington’s redevelopment commission (RDC) at its regular Monday meeting.

On the lot stands a concrete block building constructed in 1960, that is currently leased for document storage by Centerstone, a nonprofit that offers mental health and substance use disorder treatments.

The offer accepted by the landowner was $265,000.

The RDC was keen to acquire the property, because it’s an island in a sea of parcels that are a part of the planned redevelopment of the IU Health hospital at 2nd and Rogers streets. The health care provider plans to vacate and mostly demolish it later this year. Operations will be moved to IU’s new facility on SR-46.

IU Health is turning over the hospital property to Bloomington as part of a $6.5 million real estate deal.

Monday’s deal is one of the transactions for additional property in the vicinity that the RDC has pursued, in order to have more flexibility in developing the area.

Assistant city attorney Larry Allen told RDC members that the acquisition of the Madison Street property would save some cost in connection with the city’s planned redevelopment, because of where the property is situated. It sits a little lower, Allen said, which means retaining walls would have been needed all the way around it, if the RDC had not been able to obtain the property from its owner.

The property is owned by Stephanie Kane, according to Monroe County’s online property lookup system. Its assessed value in 2021 was $58,900, according to Monroe County.

The Madison Street site is part of the redevelopment project’s Phase 1 East.  That’s a phase that could start in 2022, according to the project master plan.

Phase 1 East is described in the master plan as including: a realignment of Madison Street from 2nd Street to 1st Street; Morton Street improvements from 2nd Street to 1st Street; construction of an initial phase of greenway from Morton Street to Rogers Street; a “road diet” and dedicated protected bikeway for 2nd Street; and demolition of existing buildings.

Allen told the board that, as a part of the deal,  the RDC would be assuming the lease of the building to Centerstone for its duration, which runs through May 2022.

About the RDC’s approval of the land purchase on Monday, Bloomington director of economic and sustainable development Alex Crowley said at the meeting: “We’re pleased this has happened—it’s been a bit of a long time coming.” Crowley continued, “Phase 1, being east of Rogers, is going to be the first thing out of the gate. So anything that was going to be standing in the way of that was going to be a challenge.”

Crowley added, “We hope to get it over the finish line, and to get going with this project.”

Start on the redevelopment project will depend in part on a smooth transition by IU Health to its new facility on SR-46.

In early September, an IU Health spokesperson described the timing of the move like this: “The new IU Health Bloomington at the Indiana University Regional Academic Health Center is still on track to open later this year. Once the new facility is open to patients and the last patient has been moved to the new facility, the current facility will be closed quickly.”

The IU Health spokesperson continued, “All hospital services will transition on the same day. As we get closer to the move date we will share more information with the public and media.”

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