Bloomington to pay $381K to settle Showers West disputes after court losses

A legal strategy that Bloomington deployed in order to pressure two private tenants out of the Showers West building produced two losses in Monroe circuit court.

The price of ending the resulting litigation will be $381,650 in cash payments, plus a year of free rent for one of the tenants. On Monday (Aug. 17), the Bloomington redevelopment commission (RDC) is set to ratify the agreements.

Monday’s RDC meeting is set for 5 p.m. Monday (Aug. 17) in the McCloskey Conference Room at city hall.

Showers West is part of the same 1910 Showers Brothers brick factory building on Morton Street that also houses city hall and, on its north end, Monroe County offices.

As described in the resolution on Monday’s agenda, Warrant Technologies LLC will receive $275,000, and its Showers West lease ended July 31. Bloomington Board of Realtors Inc., now known as Indiana Uplands Realtor Association, will receive $106,650, and its lease will end June 30, 2027.

Under the terms of the BBOR settlement agreement, for the final 12 months of its tenancy, from July 2026 through June 2027, the rent for BBOR is reduced to zero, although it remains responsible for utilities, maintenance and common-area charges.

The $381,650 is the gross amount of the two cash payments, not the net financial cost to the city. Under the Warrant Technologies agreement, rental money that Warrant owes the RDC and that has been held in a trust account will be released to the RDC. The amount is not stated in the agreement.

The RDC had appealed both trial-court rulings against it before agreeing to mediation. Both appeals by the RDC from the circuit court ruling have now been dismissed on the RDC’s own motion.

The RDC’s Monday resolution is just the formal ratification of agreements that were reached under settlement authority the RDC granted in June and authorizes city staff to make the payments and take the other steps needed to carry them out.

Origin of lawsuits

The litigation grew out of the RDC’s June 2025 effort to terminate the leases of private tenants remaining in Showers West. The city wanted to terminate the leases, not just because it wanted to use the space, but also because it was under legal pressure to conform with the public use requirements of the bonds that were issued to fund the purchase of the building.

Warrant and the Board of Realtors had signed leases with the building’s previous owner, CFC Properties, in 2021. When the RDC bought Showers West in January 2023, it explicitly accepted the property subject to those leases and assumed them itself. Neither tenant was in default when the RDC sent termination letters in June 2025.

The city relied on language in the leases allowing for termination if the building were condemned for a public purpose. The city’s legal department argued that the RDC’s acquisition and intended governmental use of Showers West amounted to an “inverse condemnation” of the tenant leasehold interests, even though no formal eminent-domain proceeding had occurred.

The tenants countered that inverse condemnation works in the other direction: It is a remedy available to a property owner when the government has taken property without following condemnation procedures. That is, it’s not a procedure the government can invoke to terminate a lease it previously agreed to assume.

On March 31, Monroe Circuit court judge Kara Krothe granted summary judgment to both tenants. Her orders rejected the RDC theory on three independent grounds. First, no court had found that an inverse taking had occurred. Second, an inverse-condemnation claim belongs to the private property owner, not the government. And third, an Indiana redevelopment commission explicitly lacks the power of eminent domain under state law and therefore cannot accomplish “inversely” what it cannot do directly.

The statutory route available to an RDC would have required action by the city council, which was never asked to authorize condemnation of the leasehold interests. Krothe also concluded that the RDC breached each tenant’s contractual right to quiet enjoyment when it sent the termination notices. [Warrant Technologies trial court ruling] [Board of Realtors trial court ruling]

The outcome stands in sharp contrast to the confidence that corporation counsel Margie Rice expressed when the RDC launched the lease-termination effort in June 2025. When RDC member John West asked about the expiration dates of the leases, Rice said that information was “not going to be terribly relevant to me” in negotiations because she did not think that was how damages should be calculated. Rice said she hoped damages could be negotiated, but contemplated resolving them in court if necessary. West responded at the time: “A little disagreement here—I think it is relevant, and it’s kind of important to know that before we vote on this.”

Nine months later, Krothe’s rulings focused squarely on the leases. Because the RDC bought Showers West in an ordinary arm’s-length transaction, assumed the leases and never lawfully condemned the leasehold interests, Warrant and the Board of Realtors were entitled to stay until their leases expired or the property was properly condemned, according to her ruling.

Calculating the cost

Measured strictly by the cash payments, the two mediated settlements are substantially more expensive than the departures of other tenants, which were negotiated earlier. In early 2024, the RDC paid Kerr Law $5,000, Indiana Team LLC $30,000, Bynum Fanyo Utilities $15,000 and the Bloomington Symphony Orchestra $10,000—a combined $60,000.

Later, Bloomington Health Foundation received $19,542, along with waived rent for August through October 2025. Merrill Lynch received no termination payment and was allowed to remain through March 2026. CASA subsequently agreed to $45,751 plus two one-year Fourth Street garage passes, then valued at a combined $2,856.

Those previously reported cash payments total $125,293. The $381,650 for Warrant and the Board of Realtors works out to over three times as much.

But that is not an exhaustive apples-to-apples accounting of the economic concessions. In one of the earlier settlements, with GP Strategies, the RDC agreed to forgive $65,405 in remaining build-out costs and also gave up future rent. GP’s annual rent at the time was just under $120,000. The new agreements include the unpriced year of free rent for the Board of Realtors, while Warrant’s held-back rent is to be returned to the RDC.

Historical background

The dispute traces back to the way Bloomington’s RDC bought Showers West. In December 2022, the city council voted 8–1 to authorize up to $29.5 million in bonds for a package of public-safety projects that included buying and renovating the western 64,000 square feet of the former Showers Brothers factory for a new police headquarters and fire administration offices.

The following month, on Jan. 25, 2023, the city council voted 5–4 for the $8.75-million Showers West purchase as part of the bond appropriation.

That original plan changed after mayor Kerry Thomson took office. In February 2024, her administration rejected about $12.7 million in construction bids and abandoned the plan to move police headquarters into Showers West, while continuing with the fire department’s separate projects. The bonds, authorized at up to $29.5 million, had ultimately sold for just over $27.1 million.

At the city council’s meeting nearly a week and a half ago on Aug. 5, Thomson gave councilmembers what amounted to a closing update on the Showers West tenant problem: “We have now reached agreement with all of the remaining tenants, and so there’s a plan for them to depart.”

Looking ahead

But that does not mean the Showers West problem itself is finished. Thomson told councilmembers that the city council office, engineering department, and fire headquarters are now located there, and the city is considering which other departments should move into the remaining space. She said the bond restrictions meant the city had to stop renting to private tenants and acknowledged, “We were out of compliance with that bond.”

Thomson also said the bond money is now exhausted. Showers West still needs more than $1 million in HVAC work, along with wiring improvements, before additional offices can move in, Thomson told councilmembers. She said the public-safety bond had been spent according to the priorities approved for it, with the fire projects first, and those expenditures consumed the remaining balance.

Monday’s ratification by the RDC of the mediated settlements would officially end the legal fight with the two tenants who challenged Bloomington in court. That means after a $8.75-million purchase, a change in plans for the police headquarters, a protracted fight over tenant buyouts and ultimately $381,650 in settlements following two courtroom defeats, the city finally has control over the building’s future use.

But with no remaining bond proceeds, the city will have to tap additional money to make full use of Showers West.