Johnson’s Creamery developer pitches swap of alley location, city council puts off decision

Just this week, a plot twist has emerged in connection with the potential future development of the northern part of the 7th Street parcel where the Johnson’s Creamery building sits.

The twist: Peerless Development has added a corresponding offer to its request for an alley vacation

Now, Peerless says it is willing to dedicate a new public alley on the property, just south of the existing alley. The vacation, combined with the new dedication, would amount to moving the existing alley a bit to the south.

Peerless wants the existing alley to be vacated, in order to build a 51-unit apartment complex north of the old creamery building, right next to the B-Line Trail, off 7th Street. Bloomington’s plan commission approved the site plan for the new development in October 2021. But that approval was contingent on getting a greenlight from the city council for the vacation of the east-west alley—because part of the proposed new building would sit in the right-of-way.

The creamery’s historic smokestack stands in the existing alley. It is subject to a partial demolition order  from the city, based on an engineering study.

At its Wednesday meeting, Bloomington’s city council responded to the offer to move the alley, instead of just vacating the existing public right-of-way, by putting off a decision on the alley vacation.

What the council did procedurally was to table the question. The vote on tabling was 6–2, with Dave Rollo and Jim Sims dissenting. Kate Rosenbarger was absent.

That’s now the third time a decision on the alley vacation has been put off.

Since discovering late in the approval process for its residential development that a public alley is still platted on the parcel, Peerless has wanted the city council to vacate that public right-of-way.

The position taken all along by Bloomington mayor John Hamilton’s administration has been that the council’s approval of the alley vacation should be contingent on Peerless paying the city about $250,000, so that the city can create an art installation commemorating the smokestack. The art would be installed at the site of the 60-foot “stub” that will remain after the partial demolition of the 140-foot structure.

Peerless has taken the position that it cannot afford that much of a contribution, especially now that it faces the additional cost of partially demolishing the smokestack, which is estimated at around $350,000. Because the alley was missed on the review of the property in connection with the purchase, Peerless has indicated it will try to recover some damages from its title insurance—because that might allow for a contribution towards art. But at Wednesday’s city council meeting, Peerless founder Michael Cordaro said their claim had been denied.

In the meantime, Peerless has also successfully pursued $20,500 worth of grants from the city.

At Wednesday’s city council meeting, Bloomington corporation counsel Beth Cate gave an update on the status of the negotiations. Cate told the council that the city’s most recent position had been to ask Peerless to pay $200,000 over two years. The counter from Peerless was $75,000—after operating for six months at 85-percent occupancy in the new building.

Cate told the council: “We think that the asset is worth more than that.”

A point made by councilmember Matt Flaherty during Wednesday’s meeting concerned the parties to the negotiation—the administration and Peerless. All the administration can negotiate is the administration’s support for the council to vacate the alley—the decision itself rests with the council. So Flaherty wondered why it was not councilmembers who were involved in the negotiations.

In connection with the proposal from Peerless to dedicate a new alley just south of the existing alley, there would be no significant financial contribution towards art.

At Wednesday’s meeting, Cordaro said the city’s request for a contribution towards artwork was based on the idea that by vacating the alley, the city is giving up a public asset. The vacation of the existing alley followed by the dedication of a new alley would preserve the city’s asset, Cordaro indicated. Also a part of the thinking is that the re-location of the alley farther to the south would make more sense for the parking spaces to the north of the existing creamery building.

Cordaro put it like this: “What we’re proposing is that the city’s giving up nothing—it’s simply relocating an alley that’s currently not in use, and putting it in a place where it can be put to use.” He added, “So we feel like that is a one-for-one exchange of value, and that the ask for additional contribution is no longer valid.”

During deliberations, councilmember Sue Sgambelluri reacted to Cardaro’s assertion that on a scenario where the alley is effectively moved, the city is “giving up nothing.” She focused just on the value of the existing alley: “One assertion that was not compelling to me, is the notion that the city is giving up nothing.” She added, “If this plot had no value, we wouldn’t be in our fourth meeting discussing it. So I think clearly it does have some value.”

For councilmember Dave Rollo, the value of the alley is that it prevents monolithic buildings. Rollo compared the size of the proposed building by Peerless to The Avenue on College (formerly Smallwood). The length of the east facade is “equivalent to Smallwood,” Rollo said. Rollo said he would vote against the vacation of the existing alley.

Flaherty countered by saying that the size of the building that could be built without using the space in the existing alley would be only slightly smaller. Flaherty also pointed out that the building Peerless wants to construct will not be nearly as large as The Avenue on College—based on the measurement he had just done using Google Maps.

For the Peerless building, The B Square measured the parcel boundary from 8th Street down to just north of the smokestack at about 140 feet. For The Avenue on College, the portion facing the College Avenue measures 280 feet.

On Wednesday, Flaherty gave a clear indication of where he stands on the question. He thinks that the inclusion of a public art contribution into the deliberations is inappropriate. Flaherty would support vacating the existing alley, subject to the condition that a “substitute” alley would be dedicated.

Like Flaherty, councilmember Isabel Piedmont-Smith could not reconcile the idea of connecting a public art requirement to the alley vacation, citing the 1987 city council resolution that is supposed to guide decisions on vacating public right-of-way. “I fail to see the connection,” she said.  Piedmont-Smith could envision supporting a vacation of the existing alley, if the dedication of a new alley goes through all the regular approval processes.

Councilmember Ron Smith also indicated that the public art is not appropriate as a condition. “ I have a hard time with this connection with the public art,” Smith said.

Councilmember Steve Volan indicated that he thinks the proposal to move the alley to the south is “not unreasonable.” On that scenario, Cordaro had mentioned that Peerless might be willing to contribute $10,000 towards a commemorative plaque. Volan described the $10,000 as “not enough.”

The housing project that Peerless is planning to build does not include any income-restricted housing. Councilmember Jim Sims said it doesn’t sit well with him to help make a project possible when the rent for a two-bedroom apartment is going to be higher than a mortgage on a three-bedroom house out on the west side of town where he lives.

Council president Susan Sandberg found “a little bit compelling” the idea that a newly dedicated alley to the south might actually put an alley in place where it might get more use. She supported tabling the question so that the planning department could take a closer look at the configuration of a new alley.

2 thoughts on “Johnson’s Creamery developer pitches swap of alley location, city council puts off decision

  1. Peerless should offer income restricted housing on exchange for an alley vacation

  2. Does the current alley house any infrastructure underneath as many alleys do?

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