Dora, Concord pitch rival College Square projects; Bloomington RDC mulls decision

Bloomington’s redevelopment commission (RDC) heard competing plans Monday (Aug. 3) for redevelopment of College Square, at the corner of College Avenue and 4th Street. But no decision was made on Monday.

A decision won’t come any sooner than the RDC’s Sept. 7 meeting. That’s because the next regular meeting for the RDC, on Aug. 17,  falls inside a 30-day window that starts after the opening of bids, which took place on July 20. Inside of that 30-day window, the RDC can’t accept an offer that is less than the average of two appraisals of the real estate, which was $7.59 million. 

Something the two proposals have in common is the price the respective developers are willing to pay for the property, which is $4 million.   

But the presentations underscored a big difference between the proposals. Concord Hospitality’s plan for mixed-income housing on CIB-controlled property south of the convention center and a hotel at College Square, depends on cooperation from the Monroe County capital improvement board (CIB). [Concord Hospitality  proposal] 

And that would mean backtracking by the CIB on a choice it has already made for development of a host hotel with Dora Hospitality south of the existing convention center. The host hotel is meant to support the convention center expansion which is well underway between College Avenue and Walnut Street on the south side of 3rd Street. 

In contrast, Dora Hospitality described its College Square development as a stand-alone project that does not require any further coordination with the CIB. But Dora sees its proposed College Square hotel as complementing the convention center host hotel it is now negotiating with the CIB to build south of the existing convention center. [Dora Hospitality proposal]

Still, the Concord team, which includes RATIO Design, made an undaunted pitch. Speaking for the team, RATIO Design’s Adam Thies, a former CIB member, said, “This site is basically the gap in the smile of that downtown. And filling that gap, I think, with a really strong sense of arrival and a really strong sense of a compelling hotel product, really helps to bridge those visitors that will be at the convention center, getting them to come up into the courthouse square, which I think is really the kind of crown jewel of the downtown.” 

After the meeting, RDC executive director Anna Killion-Hanson told The B Square the RDC would consider both proposals in good faith.

Both teams put a total value of $4 million on the roughly two-acre property at Fourth Street and College Avenue. The RDC’s April public offering set a minimum price of $7.59 million.

The proposals are the latest turn in the long-running effort to pair a host hotel with the approximately $70 million Bloomington Convention Center expansion.  [Bloomington Convention Center Timeline]

Later during Monday’s meeting, the RDC handled some other College-Square-related business, by approving a roughly $150,000 contract with VET Environmental. VET will dig in suspected areas on the parcel to determine whether old underground fuel tanks remain at College Square and remove them if they are found. It will also excavate and dispose of petroleum-contaminated soil, test the remaining soil and groundwater, refill the site and document the cleanup for state regulators.

That’s work that comes after VET Environmental in April completed a study on College Square for the RDC.

Concord: Host hotel north, housing south

The Concord team is proposing a 160-room, full-service convention hotel on College Square and about 200 apartments on CIB-controlled property south of the existing convention center.

RATIO Design’s Adam Thies framed the hotel as an entrance to downtown. “This presentation is about figuring out how Bloomington welcomes people and welcomes people to Bloomington,” Thies said.

The housing would include 27 units reserved for lower-income households. The existing Seminary Pointe buildings would be demolished, but roughly 450 surface parking spaces near the convention center would be preserved.

Under the proposed transaction, TWG Development would pay the CIB $4 million for the southern property. The CIB would then transfer the money to the RDC as payment for College Square. Thies described it as essentially a previously much discussed land-swap arrangement, but with a $4 million valuation.

Concord would also seek the College Square land at no additional cost and an estimated $12 million in public assistance for the hotel. Concord’s Carl Hren said projected occupancy and room rates leave a $12 million financing gap. The team did not identify a specific funding source.

The larger obstacle is control of the southern property. Concord’s plan would require the CIB to abandon or substantially alter the course it has already chosen for the host hotel.

Concord submitted the same basic concept during the CIB’s host-hotel selection process, but it was not advanced for final consideration. The CIB instead unanimously selected Dora Hospitality on July 15 to negotiate development of a roughly 200-room host hotel south of the convention center.

Asked whether the team had secured CIB cooperation, Thies gave no indication that they had. “We submitted to the CIB,” Thies told the RDC. “They did not hear our proposal when they went through their process.” The CIB narrowed its field of proposals and held public interviews with Dora Hospitality and MHG Hotels.

Asked who would bear the loss if revenue fell short, Thies said, “I think that would be all forward facing in future discussions.” He added, “I think we've put together a pretty complex proposal. … We put forward an idea that we thought worked for the community. ”

Construction would take about two years after agreements were reached, Thies said.

Dora: Two sister hotels

Dora’s College Square plan calls for a 135-room boutique hotel, 80 to 100 market-rate apartments or condominiums, about 20,000 square feet of restaurant, retail and amenity space, and approximately 200 structured parking spaces.

A pedestrian promenade would connect College Avenue with the B-Line Trail through the middle of the development.

Dora said the College Square hotel would operate alongside the larger host hotel it has been selected to develop south of the convention center.

“This hotel and development would be working in tandem,” Vince Dora said, describing the hotels as “sister properties” that could accommodate convention business and overflow demand.

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 team is also requesting $5 million in project-based tax increment financing (TIF) for structured parking. Dora initially said the RDC could approve the assistance without city council involvement, but corrected himself before the presentation ended, saying the city council would need to be involved.

Asked about risk, Dora said, “There is no risk to the city of Bloomington, the RDC, or anyone else. The risk is fully on us as developers. We are going to be signing personal guarantees for our construction loan and permanent loan after it's open, and we will continue to bear those risks. So we are fully invested.”

Housing developer Travis Vencel with Sullivan Development, said the College Square apartments or condominiums would have to be market rate because structured parking and four- or five-story construction would make an affordable for-sale project financially unworkable.

Separately, Dora said his team is also working with Vencel on the possibility of affordable housing on excess land at the southern host-hotel site, to replace units lost through the planned demolition of Seminary Pointe. That concept is not part of the College Square proposal.

Dora estimated nine months for design and predevelopment, followed by 18 to 20 months of construction, or about 27 months total.

No decision

The RDC concluded the presentations without deliberating on them or selecting a proposal.

The part of Indiana state law regulating RDC real estate activity prevents the RDC from selling College Square for less than the advertised $7.59 million price during the 30 days following the July 20 opening of offers. After that period, the commission can accept a lower price, if it determines that doing so is necessary to advance the city’s redevelopment plan.

Standard questions asked by the RDC of both teams

1. Beyond the purchase price, please explain the form and amount of full public subsidy you’re proposing for this project and how you arrived at that request.

2. If your proposal relies on CIB cooperation, have you had communication with them and secured their cooperation? What other third parties will be required for your proposal to be achieved?

3. Does your project require additional land or use of existing facilities that are outside of College Square?

4. Can you explain the estimated time frame in which it will take to complete your project?

5. In your choice to include housing as part of your project, tell us more about the housing you’ve chosen to include and why.

6. The RDC is required to consider the public benefit of your proposal. Tell us about how your proposal is providing the best benefit to the public, and the highest and best use of the College Square site, as well as any other related property.

7. Tell us more about the risk that your team is expecting to assume versus the risk that you’re expecting the RDC and public entities to assume. In other words, if the project revenue does not deliver as intended, who bears the shortfall?