Bloomington RDC loses two Showers West lease disputes in Monroe circuit court

Two tenants in the Showers West building have won summary judgment rulings against Bloomington’s redevelopment commission (RDC), with a Monroe County circuit court judge concluding the RDC could not terminate their leases after purchasing the property.

In orders issued Tuesday (March 31), judge Kara Krothe granted summary judgment to Warrant Technologies LLC and Bloomington Board of Realtors (BBOR), while denying the RDC’s cross motions for summary judgment in both cases. [Warrant] [BBOR]

The rulings mean both tenants are entitled to remain in their leased spaces unless the property is properly condemned through statutory procedures for eminent domain, or until the leases expire.

The RDC purchased the Showers building in 2023 from CFC Properties in an arm’s-length transaction for $8.75 million, and explicitly assumed leases of both tenants as part of the purchase. The RDC argued the tenants should surrender the space based on what it argued was an “inverse condemnation” of the leasehold interest.

The court rejected that argument for both tenants, concluding the RDC had not followed the statutory condemnation procedures required under Indiana law. The court’s orders for both cases point out that under Indiana law, an RDC cannot itself exercise the power of eminent domain.

Instead, an RDC has get the legislative branch of its unit, in this case, the city council, to pass a resolution determining to use the city’s power of eminent domain on behalf of the RDC. That’s something the Bloomington city council was not asked to do for the Showers West leases.

The judge’s order is blunt in its breakdown of Bloomington’s argument that the tenants were required to vacate their premises—based on the city’s claimed “inverse condemnation” of the lease. The court gave three independent reasons why the RDC’s argument fails: no court had ever ruled that a taking of the property had occurred; inverse condemnation claims can only be brought by property owners against the government, not by the government itself; and redevelopment commissions in Indiana lack eminent-domain power, meaning the RDC could not accomplish through “inverse” means what it cannot do directly.

Hovering behind the legal fight is a practical one. The Showers West purchase was financed with bonds issued for capital and public-safety purposes tied to city operations. At a Bloomington RDC meeting in June 2025 the city’s corporation counsel, Margie Rice, said the city’s bond counsel had advised that leasing the space to private tenants is not consistent with the public-use purpose of the bonds.

The late 2022 bond issuance covered the cost of the Showers West as well as other public safety projects, and came with a legal requirement that the building purchased with the money be put to a public purpose. That public purpose, as envisioned by then-mayor John Hamilton’s administration, had been to house the city’s fire department administrative offices and the city’s main police station.

The fire department was moved into Showers West. But Bloomington mayor Kerry Thomson’s administration, which took over at the start of 2024, opted not to pursue a move by the police department. Some of the space is just empty while other parts of Showers West are occupied by tenants.

The decision not to move the police department to Showers West eliminated the immediate urgency for tenants to leave, which stemmed from the practical need to make way for a specific city use. But the view of the city’s bond counsel is that it does not count as a public purpose for the government to collect rent from tenants and use the proceeds of the rent for a public purpose.

In Bloomington mayor Kerry Thomson’s State of the City speech on Tuesday (March 31), she mentioned Showers West: “We’re looking at how best to use the Showers West space, given the bond restrictions, the city’s need for space and the current state of its aging systems.” She added, “Most recently, our engineering department relocated to Showers West, affording planning and HAND [Housing and Neighborhood Development] the space they have long needed within city hall—no more working in closets.”

In her Tuesday address, Thomson also mentioned the current tenants, but not the litigation: “We are now negotiating final agreements with the remaining tenants.”

Several of the tenants were able to negotiate payments from the RDC in exchange for agreeing to terminate their leases. Most recently, CASA (Court Appointed Special Advocates) reached an agreement with the RDC to vacate its current space. The agreement with CASA includes a payment of $45,751 and two parking passes in the Fourth Street garage for one year.

The mayor’s office did not respond immediately to The B Square’s emailed question about possible plans to appeal Tuesday’s court ruling. [Added, 11:29 a.m. April 1, 2026: Shortly after publication the statement released by the mayor’s office was: “We are weighing our options and likely won't have a decision or update this week.”]

• Bloomington Board of Realtors, Inc. v. Bloomington Redevelopment Commission: 53C06-2508-PL-002258
• Warrant Technologies, LLC v. Bloomington Redevelopment Commission: 53C06-2508-PL-002257