High bids: Bloomington adds $3.8M to tech center before construction start, budget now $12.8M

At a special meeting on Wednesday, Bloomington’s five-member redevelopment commission (RDC) approved an additional $3.8 million in funding to construct a technology center.

The 3-story 22,000-square-foot building—which will stand in the southeast corner of the Trades District, just south of The Mill coworking space—is supposed to provide office space for technology companies that are beyond the startup phase.

The additional $3.8 million in TIF (tax increment finance) money adds to $2.1 million of TIF money the RDC had approved two years ago.

When it’s added to the $5.9 million in TIF money, and to the $3 million in former CRED (community revitalization enhancement district) funds, and $310,000 from the city of Bloomington utilities green infrastructure fund, the extra money brings the total local contribution to about $9.2 million.

That’s about 75 percent of the project budget, which now stands at about $12.8 million. The remaining $3.5 million is being covered by a grant from the federal Economic Development Administration (EDA).

Technology Center Approved Funding
Source Amount
TIF $2,100,000
US EDA $3,500,000
CRED $3,061,391
CBU Green Infra $310,000
Pre-Bid Total $8,971,391
TIF $3,797,557
Total $12,768,948

The extra $3.8 million was needed to cover construction bids, which came in higher than estimated. The bids were opened the day before the RDC’s special meeting, which had already been scheduled, in case the bids came in high.

The city is working under a timeline that is made tighter by the federal EDA grant funding, plus a potential federal government shutdown on Saturday (Sept. 30).

Former Bloomington mayor and vice president for innovation and strategic partnerships at The Mill, John Fernandez, told RDC members on Wednesday that under the terms of the EDA grant, ground has to be broken by Oct. 12. The Mill is leading the construction of the technology center and the development of the Trades District.

But before the project can break around, Fernandez said, construction contracts have to be signed. Before the EDA will release the funds so that construction contracts can be signed, Bloomington has to demonstrate to the EDA that all the local funding is in place. “That’s what today’s meeting is all about,” Fernandez said.

The ceremonial groundbreaking for the technology center is set for Oct. 5.

Bloomington’s RDC is made up of five members: Randy Cassady, Deborah Myerson, Deborah Hutton, Sarah Bauerle Danzman, and Cindy Kinnarney.

Kinnarney abstained from the vote. She told The B Square after the meeting that she wanted to avoid any possible appearance of a conflict of interest, given that she serves on the board of The Mill.

Even though they grumbled about the cost, and the timing, RDC members supported the additional funding. Cassady put it this way: “I’m not happy with the cost. I’m not happy with being put in a corner. I don’t like the deadlines.”

About the construction cost estimates that had been made six months earlier, Cassady said there had been “numbers thrown out there, that frankly, were just not right.” Cassady added that while buildings are important, it’s the people in the buildings that are pursuing the mission that he thinks about.

In her turn from the public mic, Bloomington Economic Development Corporation (BEDC) president Jennifer Pearl ticked through some of the intended benefits of the technology center. They include diversifying the local employment base, and fostering what she described as “a burgeoning tech industry.”

The technology center is supposed to help spur local private sector hourly wages, which lag behind statewide averages, Pearl said. With an aging population, Pearl said, it’s important to grow the local labor force.

Cassady put the choice like this: “We are basically at the point where we either approve it, or we stay status quo.” Cassady said that Bloomington, as a community, wants higher wages and growth. About his position on increasing the funding amount by $3.8 million, Cassady said, “I don’t like all the details. But I also know that if we don’t do something, nothing will ever happen.”

BEDC members got confirmation from Cheryl Gilliland, who is Bloomington’s director of auditing and financial systems, that there is enough TIF money available to cover the additional $3.8 million commitment. They did not ask for a breakdown of fund balances, projected TIF revenues, and what other existing obligations exist for that revenue.

In 2022, the Bloomington’s consolidated TIF district generated about $17 million in revenue.

About the much higher-than-anticipated cost of the building, Fernandez said, “I’m not going to apologize for the costs, because they are what they are.” He added, “You know, this is the market we’re in.”

Fernandez said the technology center needs to be a high-quality building. He said, “ I think that we deserve to have a really nice building in the Trades District—as a catalyst that will set a bar for what we want to see, and the kinds of development we want in the city of Bloomington.”

Fernandez added, “It is an expensive building, no question.” But he said it’s comparable in cost to similar buildings. One example given by Fernandez was the Ferguson International Center on Eagleson Avenue, which was constructed by Indiana University, and bid out before the COVID-19 pandemic. Fernandez said the cost of the Ferguson building was a little over $500 per square foot.

Fernandez also gave as example the High Alpha building in the Indianapolis Bottleworks District as a point of comparison.  The second phase of the High Alpha building is looking like it will be closer to $600 per square foot, Fernandez said. “So that’s just the nature of what high-end nice buildings cost,” he said.

The RDC’s action on Wednesday means the new $12.8-million price tag for the technology center works out to about $580 per square foot.

One thought on “High bids: Bloomington adds $3.8M to tech center before construction start, budget now $12.8M

  1. “I don’t like all the details. But I also know that if we don’t do something, nothing will ever happen.”

    I hope that something does happen, but we should be prepared for the possibility that, as in other places where “build it and they will come” come has been tried, it doesn’t.

    Cassady’s concern for “people in the building” is spot on. Human capital is far more important in this context, as we have seen when local start ups move to Indy when they can’t find staff with the necessary skills locally.

    IU turns out graduates for entry level positions at an impressive clip. Unfortunately, this is not adequate when staffing a firm.

    Remote work seemed a promising development but is generally evolving to a few days in the office and a few days from home every week, which still requires proximity.

    Its a chicken and egg sort of problem. We can’t attract the human capital because we don’t have the firms with jobs. We can’t attract the firms because we don’t have the human capital.

    Bloomington has been building rather a lot of stuff, especially if you count amenities like Switchyard Park intended to attract the “creative class”. We don’t have much to show for it beyond higher taxes. If we don’t have some success soon we need to address the human capital issue.

    Otherwise we’re just making work for architects, engineers and construction companies (and campaign contributions from said architects and engineers for those politicians who choose to accept them).

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