In mid-July, Bloomington’s redevelopment commission (RDC) gave initial approval to a $9.25 million deal to purchase CFC’s portion of the Showers building—which houses city hall in the eastern part of the building, in addition to CFC offices in the western part.
But that price has now dropped by a half million dollars.
At its regular meeting on Monday, the RDC approved an amendment to the purchase agreement that knocks the price down to $8.75 million. The address of the building is 320 W. 8th St.
Bloomington was able to negotiate a price reduction, according to a memo provided in the RDC’s meeting information packet, “[b]ased on renovation cost estimates produced by the consultants assisting with due diligence.”
During the due diligence phase for the purchase agreement, the city has brought in architects and public safety construction experts, to estimate the cost to convert the space to a police and fire administrative headquarters.
The plan would consolidate in the same building as city hall two additional facilities: the police headquarters on 3rd Street; and the fire administrative headquarters at 4th and Lincoln streets.The initial purchase agreement gave the RDC until Sept. 16 to complete due diligence, but a later revision to the agreement extended that period by 60 days, that is, through Nov. 15. So the due diligence phase is over.
The initial agreement allowed CFC to stay in its current office suites for up to 60 days after closing, subject to a lease payment of $10,874.74, but prorated for the actual days. But Monday’s revised purchase agreement allows CFC to stay in its current Showers building space until June 30, 2023, rent- and cost-free.
Closing is required to be done within 14 days of completing due diligence, and getting financing in place. The agreement gave Bloomington until Jan. 30, 2023 to get the financing piece done. The RDC’s project form specifies a new tax increment finance (TIF) bond or public safety local income tax bond as the source of revenue.
One of the approvals needed by the RDC is from Bloomington’s city council. That’s because under state law, the city council has to approve a property purchase for more than $5 million.
The new purchase price of $8.75 million approved by the RDC on Monday is still more than $6.595 million, which is the average of the two fair market value appraisals obtained by the RDC—$5.5 million and $7.69 million.
For general government purposes, the purchase price of real property can’t exceed the average of the two appraisals—but Bloomington is relying on a specific provision of the RDC statute, which allows an RDC to exceed that figure.