At its regular meeting on Monday, Bloomington’s five-member redevelopment commission approved a $403,082 contract with Axis Architecture for engineering services and design of the planned new technology in the Trades District.
The technology center is a joint project of the city’s economic and sustainable development (ESD) department and the Bloomington Economic Development Corporation. The site is now a vacant lot, north of the old Showers Company building that houses the Monroe County government center, as well as city hall.
It is just south of The Mill, which is a co-working space that has been developed as an adaptive reuse of another old Showers building. The tenants of the planned new technology center could be drawn from companies at The Mill that progress beyond the start-up phase.
An “information session” about the technology center is being hosted at The Mill on March 31.
BEDC president Jen Pearl has previously described the role of her organization as establishing the nonprofit that will operate the building to provide services to the companies that are its tenants.
Axis Architecture was in line to do the next phase of design and engineering work for the technology center, because the company provided the preliminary schematics that the city and the BEDC used in their application for a grant from the federal Economic Development Administration.
The application was successful in that the EDA awarded a $3.5 million grant. But that figure fell $2.3 million short of the $5.83 million the city had requested in its grant application.
The dollar figure for the contract with Axis Architecture is based on an estimated $5 million in construction costs minus the amount already paid for the EDA grant application design work, and a $60,000 LEED surcharge.
$5,081,100 *.7.5% – $38,000 + $60,000 LEED design = $403,082
At Monday’s meeting, ESD director Alex Crowley made two points, both related to the estimated cost of construction.
The estimated cost of construction is expected to increase as the project moves ahead, Crowley said. That’s due to various supply chain issues connected to the pandemic. For that reason, it is important now to lock in the amount to be paid to Axis Architecture, he said.
Typically, the amount to be paid for design is some fraction of the construction cost. In this case, Crowley said, that should be based on current estimates. “In our opinion, the design fees shouldn’t increase, if construction costs increase—there’s no material change in the effort necessary. It’s just the underlying cost structure.”
The second point Crowley made: The expected increase in estimated construction cost will require additional sources of funding to be identified. Crowley pointed out that the building had already been downsized from its initial concept, when the EDA grant award came back smaller than the amount requested.
Further downsizing of the building is not really feasible, Crowley told the RDC on Monday. “There will be a gap between the original estimate of costs and what actual costs will likely come in at,” Crowley said. He added, “We feel like really the only option would be to fill that gap with additional funding.”
The RDC has approved $2 million in tax increment finance (TIF) revenue for use on the project. Crowley said, “We certainly believe that we have put ample local funding on the table.” Crowley said he’s looking for sources beyond local public funding to cover the expected gaps.
Crowley summed up his remarks on the possible funding gap by saying, “So that’s a very real challenge ahead of us.”
The site plan for the technology center was approved by Bloomington’s plan commission a week ago on Monday.
At the end of Monday’s meeting, RDC member David Walter delivered the news that he would be stepping down from his service on the commission. “I want to announce that after some 30, almost 40 years on the redevelopment commission, my health issues will require me to resign,” he said.
Walter said his resignation is not effective immediately—he thinks he might attend the next RDC meeting. He’ll work with assistant city attorney Larry Allen on the legalities of the resignation, Walter said.