Bloomington RDC to weigh Pure Development hotel proposal as best of 3 choices in Trades District
A letter of intent with Pure Development to build a $35-million, 150-room boutique hotel in Bloomington’s Trades District could get approval from the city’s redevelopment commission (RDC) on Monday.
The non-binding letter of intent with the Indianapolis firm appears on the agenda for Bloomington’s RDC at its regular Monday meeting, which is set for 5 p.m. at city hall.
The tract to be purchased by Pure Development for $1.02 million is one of four that were put on offer in summer 2023. The four tracts are north of Bloomington’s city hall, and make up part of the 12-acre Trades District, which is a portion of the city’s larger 65-acre certified technology park.
The land to be purchased by Pure is Tract 3, which is just west of the new technology center, which is currently under construction and now branded as The Forge.
The marketing of the parcels is being handled through The Mill, specifically, John Fernandez, who is vice president of innovation and strategic partnerships for the coworking space.
The proposal from Pure Development was not the first one received, after the offerings for sale were made public last year. First to propose, and the only one before the July 17, 2023 deadline, was Alluinn IU Trades District Hotel.
But according to the Bloomington RDC’s meeting information packet, even though Alluinn’s proposal looked “very promising,” the two sides were not able to reach an agreement during negotiations in the second half of 2023. Starting in fall of 2023, Fernandez started marketing a potential boutique hotel to other potential developers.
According to the meeting information packet, Bloomington’s five-member RDC met in executive session two weeks ago, on March 4, to review a total of three proposals—those from Alluinn and Pure Development, along with a third one from MHG Hotels.
After receiving input from the RDC, the recommended choice was the one from Pure Development.
Under terms in the letter of intent, Pure Development would pay $1.02 million for the property—that’s the amount for which the tract was appraised. The cost to build the 150-room hotel is pegged at around $35 million. The hotel would include a full-service restaurant and at least one full-service bar, as well as meeting rooms for small- to medium-size corporate gatherings. Parking permits would be purchased at the Trades District garage at market rate.
Here’s a rundown of the four tracts up for sale in the Trades District: Tract 1 (west of Rogers) $2,550,000; Tract 2 (east of Rogers just south of 11th Street) $2,050,000; Tract 3 (east of Rogers, north of 10th) $1,020,000; Tract 4 (east of Rogers, north of 10th) $560,000.
Based on H-T reporting from a decade ago, in 2011 Bloomington’s redevelopment commission paid Indiana University $9.3 million for the 12 acres that make up the Trades District, part of the larger 65-acre certified technology park.
| Alluinn IU Trades District Hotel | MHG Hotels | Pure Development | |
| Purchase Price | $1,200,000 | $990,000 | $1,020,000 |
| Terms | $50k non-refundable deposit @ execution of binding purchase agreement; balance due on 1 year anniversary date of hotel opening. Purchase includes Tracts 3 & 4. | To be determined |
$100k non-refundable deposit @ closing; balance to be due when hotel is “substantially completed”
|
| Project Scope | ~$35m investment; 150 key upscale hotel | ~$35m investment; 150 key upscale hotel |
~$35m investment; 150 key upscale hotel
|
| Equity Capital | Alluinn + committed capital partners | MHG |
Pure to bring equity to the project w/ identified capital partners — to be disclosed prior to executing Project Agreement
|
| “Green Building” | Minimum LEED Silver or its equivalence | Minimum LEED Silver or its equivalence | Minimum LEED Silver or its equivalence |
| Project Financing | Commercial financing; 25 years, 70% LTV; 24 months I/O | Commercial financing | Commercial financing |
| Project Agreement | W/I 60 days post-LOI execution | W/I 60 days post-LOI execution |
W/I 60 days post-LOI execution, w/ right to extend
|
| Project Timeline | 24 months post-closing | 24 months post-closing – dependent upon city permitting |
Commercially reasonable efforts to complete 24 months post-closing
|
| Hotel Management | RFP for 3rd party operator | MHG self-management | RFP for 3rd party operator |
| Hotel Franchise | Alluinn to apply for ’soft brand’ franchise i.e. Tribute by Marriott or Hotel Indigo by IHG. | High end Hilton or Marriott brand franchise, subject to Mill approval. |
Pure to apply for ‘soft brand’ franchise i.e. Tribute by Marriott or Canopy by Hilton.
|
| Hotel Amenities | Full-service restaurant + at least one full-service bar; meeting rooms for small to medium size corporate gatherings; explore roof-top bar. | Full-service restaurant + at least one full-service bar; meeting rooms for small to medium size corporate gatherings; explore roof-top bar. |
Full-service restaurant + at least one full-service bar; meeting rooms for small to medium size corporate gatherings; explore roof-top bar.
|
| Parking | 1:1 permits to be purchased for Trades District garage @ market rate | 1:1 permits to be purchased for Trades District garage @ market rate |
1:1 permits to be purchased for Trades District garage @ market rate
|
| Brokerage Fees | n/a | 3% to Buyer’s agent | n/a |
