Trades District update: Bloomington OKs revised hotel deal, greenlights interior renovation to The Mill

A revised agreement with Alluinn IU Trades District Hotel LLC for the sale of two city-owned parcels in the Trades District was approved on Monday by Bloomington's redevelopment commission (RDC).

It's still a $1.2-million deal, but a new agreement was needed to replace a previous one that expired—after the deal failed to close within 30-days of the feasibility period end. That 120-day period started late last year. Even though the period was extended by another 30 days, the deal is now past its expiration date.

According to John Fernandez, who is president of The Mill, which is negotiating the deal for the RDC, which is the owner of the property, the planned 150-bed hotel is now hoped to be open by September of 2027. Under an agreement with the RDC, The Mill has more than a geographic connection to the Trades District, which includes responsibility for marketing and promoting the developable land there.

The Mill itself was also a significant item on the RDC's Monday agenda. The RDC signed off on a proposal to renovate the interior of the historic Showers Brothers furniture factory's dimension mill building at 642 N. Madison Street. The building is home to the non-profit co-working operation known as The Mill.

The decision to renovate the interior to add additional work stations is now the preferred alternative for the use of a portion of a recent $16-million grant from Lilly Endowment Inc., which was awarded to Indiana University's Foundation. The Mill's original proposal was to achieve additional work stations by adding 2,000 square feet onto the footprint of the south side of the building.

The revised approach is to replace the floor that had been removed to form the exposed beam open-air space above the event venue on the south side of the building, and use the area to build additional work areas for members of The Mill.

There's some speculation that the removal of the floor might have caused the south wall to go out of plumb, which was recently noticed and has resulted in $600,000 in costs to shore up the wall and rebuild it. Specific improvements include 34 new coworking stations, three private offices, enhanced meeting space, and two collaboration areas, according to remarks from Mill president John Fernandez at the RDC's Monday meeting.

The renovations are scheduled to begin around January 1, 2026. The delay is meant to allow The Mill to get revenue from event space rentals through the end of the year, Fernandez said.

The revised hotel deal also solved a problem unrelated to the RDC's part of the agreement. The previous agreement had been between the RDC on one side and Alluinn IU Trades District Hotel LLC and Pure Development on the other. As assistant city attorney Dana Kerr put it, "Pure Development is having some legal issues. They are owned by two people, 50%-50%. They are deadlocked."

Kerr told RDC members that his advice was to acknowledge that the previous contract, having expired with no closing, is void and terminated "on its own terms." Kerr's advice was to enter into a new contract with just Alluinn IU, instead of with Alluinn IU and Pure Development.

The Trades District is a 12-acre portion of a larger area that forms Bloomington's certified technology park.

The city of Bloomington purchased the land from Indiana University in 2011 for $9.3 million.