Bloomington RDC to hear details of competing hotel, housing proposals for College Square

At its regular meeting on Monday (Aug. 3), Bloomington’s redevelopment commission (RDC) will hear presentations from the two development teams seeking to buy and redevelop College Square. That’s the roughly two-acre former Bunger & Robertson property at 4th Street and College Avenue, north of the Bloomington Convention Center.

Both proposals combine a hotel with housing, but they differ substantially in where those elements would be built and how the developers propose to pay for the land.

In practical terms, the Concord Hospitality proposal would make College Square the site of the convention center’s host hotel. It calls for a 160-room, full-service convention hotel on College Square and about 200 apartments on property south of the convention center.

The competing Dora Hospitality proposal would put a 135-room boutique hotel and roughly 100 market-rate apartments together on the College Square block. That’s in addition to the separate host hotel that Dora has been selected to develop south of the convention center.

The proposals came in response to a public offering made by the RDC on April 21.

On their face, both proposals put a total value of $4 million on the land transaction. That’s well below the RDC’s advertised minimum price of $7.59 million.

The Concord Hospitality team would buy the CIB-controlled property south of the existing convention center, which includes Seminary Pointe, for $4 million. The CIB would then transfer the $4 million to the Bloomington RDC as the purchase price for College Square. Dora Hospitality proposes to pay $1 million for College Square at closing and the remaining $3 million through a share of future hotel revenue.

The RDC acquired College Square starting in 2019 in two transactions totaling about $7 million. The RDC’s April public offering sought a “transformative, mixed-use” development and prohibited proposals centered on undergraduate student housing. The $7.59 million minimum was the average of two recent appraisals obtained by the RDC.

The two digital submissions were opened during the RDC’s July 20 meeting. At that point, RDC executive director Anna Killion-Hanson read only brief summaries. No prices were announced during the meeting.

Monday’s (Aug. 3) presentation comes during the 30-day period after the offers were opened when state law prevents the RDC from selling College Square for less than the advertised price. After that period, the commission can revise the price, if it determines that doing so would advance the city’s redevelopment plan. The RDC can also reject both offers or select the proposal it considers the “highest and best,” based on factors beyond price.

Concord, TWG: Host hotel north, housing south

The proposal from Concord Hospitality, TWG Development, RATIO Design and Shiel Sexton would place a 160-room, full-service convention hotel at College Square. Although the submission calls it a “convention hotel,” it looks like it would serve the function envisioned for a host hotel supporting the existing and expanded convention center.

That means the proposal would need to win approval from the Monroe County CIB. But that seems unlikely, given that the CIB has already selected a proposal for the host hotel from Dora Hospitality, for the real estate south of the convention center. Concord also made a submission for the host hotel in response to the request for proposals issued by the CIB. But the CIB did not include Concord’s proposal among the finalists.

The Concord hotel at College Square would include food and beverage service, meeting space, street-level retail, rooftop gathering areas and about 100 new surface parking spaces.

The housing component would be built on CIB-controlled property south of the convention center. TWG proposes about 200 mixed-income apartments, including 27 units reserved for households earning no more than 50% of the area median income.

The team would pay the CIB $4 million for the southern property. The CIB would then transfer that money to the RDC as the “full acquisition price” for College Square, under Concord’s proposal. The proposal also calls for the demolition of the five buildings on the southern parcels and for the CIB to preserve and improve about 450 existing surface parking spaces near the convention center.

Concord’s hotel is projected to cost $48 million. Its proposed financing package includes $28.8 million in debt, $7.2 million in developer equity and a $12 million “city incentive bridge” that does not appear to be further described. The proposal also anticipates using tax increment financing (TIF) generated by the hotel and housing developments, but does not specify the governmental source or exact terms of the $12-million city component. No total development cost is given for the housing.

Dora, Louderback: Two projects on one block

Dora Hospitality and The Louderback Group submitted a proposal focused just on College Square. They propose a 135-room boutique upscale hotel along Third Street and an about 100-unit market-rate apartment building along 4th Street. A landscaped promenade would cross the interior of the block between College Avenue and the B-Line Trail.

The hotel would include underground parking and a 75-seat bar and lounge. The apartment building would include secured parking and about 20,000 square feet of retail and amenity space, anchored by a proposed 200-seat restaurant.

Dora would pay $1 million at closing, followed by annual payments equal to 2% of gross hotel-room revenue until the RDC had received a total of $4 million. The proposal estimates that the revenue payments would take about 15 years after the hotel opens. Dora is also requesting $5 million in project-based TIF support.

The hotel is projected to cost $48 million to $52 million, while the residential development is estimated at $22 million to $26 million. Including the initial land payment, Dora puts the combined private investment at $71 million to $79 million. The hotel would take about 24 months to build after groundbreaking, with residential construction following as market conditions allow.

Two sites, two public agencies

The RDC’s decision is intertwined with the CIB’s separate effort to secure a host hotel for the convention center expansion.

On July 15, the CIB unanimously selected Dora and The Louderback Group to negotiate an agreement for a separate, approximately 200-room full-service hotel on the property south of the convention center. That proposal includes a restaurant and bar, meeting space and about 200 parking spaces.

Dora’s College Square submission assumes that both hotels would be built. The company describes them as sister properties under common ownership and management. The southern hotel would serve convention and group business, while the smaller College Square hotel would target travelers seeking an upscale boutique property.

The Concord proposal revives, in significantly altered form, the basic geography of a land swap that housing advocates and public officials spent months urging the RDC and CIB to negotiate.

Under that earlier concept, the CIB would have traded the Seminary Pointe property south of the convention center for RDC-owned College Square.

The host hotel would have been built on College Square, while Seminary Pointe would have been transferred to the RDC and then to a community land trust for preservation as affordable housing and commercial space. That possibility foundered after the RDC proceeded with its public offering, and the CIB selected Dora on July 15 to develop a host hotel on the southern property.

Concord would reach a similar geographic result through a different transaction, and without preserving the existing buildings. TWG would pay the CIB $4 million for the southern property, have the existing structures demolished, and build about 200 mixed-income apartments, including 27 units for households earning no more than 50% of the area median income (AMI). The CIB would then transfer the $4 million in sale proceeds to the RDC as the full purchase price for College Square, where Concord would build its hotel.

That means the RDC is not just comparing two development proposals for one block. Concord’s proposal would effectively revive the basic land-use arrangement of the failed land swap—host hotel to the north, and housing to the south. But that would require substantial cooperation from the CIB, which at this point would require the CIB to alter its course with Dora.

Dora’s proposal for College Square would advance its two-hotel strategy totaling about 335 rooms across two locations, in addition to the market-rate apartments, which are proposed for College Square.