Council approves phased redevelopment of former State Farm fire building, authorizes potential short TIF bridge loan
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Summary
The council voted to approve an amendment to the April 2025 redevelopment agreement with UEP Bloomington LLC to stage a $68 million project (phase 1: 57 apartments and a Starbucks; phase 1b: Park Plaza garage rehab; phase 2: remaining units and a food hall). The amendment includes developer guarantees and a contingency TIF bridge loan up to $600,000 for up to four months if historic‑tax credits are delayed.
The Bloomington City Council approved an amendment March 23 to its redevelopment agreement with UEP Bloomington LLC (Urban Equity Properties) for the former State Farm Fire Building, moving the project from a single build‑out to a staged approach and adding borrower protections and a contingency bridge loan.
Under the approved amendment, phase 1 will construct 57 residential units and secure a Starbucks tenant; phase 1b includes rehabilitation of the Park Plaza garage across Jefferson with public parking on the ground floor; phase 2 would follow roughly four months after phase 1 completion and deliver the remaining apartments, a food hall and additional retail space. Deputy city manager staff said the four‑month break anticipates closing a new capital stack for phase 2.
On financing and safeguards: staff said the city could provide a short, four‑month TIF bridge loan (up to $600,000) only if the developer fails to receive historic‑preservation tax credits in time; the loan would be repaid from site‑generated TIF increment with a special sub‑fund and, if needed, backup repayment could come from the general fund. The agreement requires a personal guarantee from the owner (identified in the meeting as Justin Fern) and a mortgage on the property as further protections.
Council members sought clarification about inconsistent dates between the screen exhibit and the agreement text; staff acknowledged exhibit errors and pointed to the contract language as authoritative. Member Hendricks moved approval, the motion was seconded, and the council approved the amendment with no nays announced.
Why it matters: the amendment preserves the developer’s overall program while allowing a phased start that staff said reflects shifting construction‑finance realities and protects taxpayers through loan‑repayment mechanisms and personal guarantees. The amendment also removes the separate Coachmen project previously included in the original agreement.
Next step: staff and the developer will proceed under the amended schedule and financing assumptions; council members asked staff to continue monitoring local‑labor (PLA) commitments and to ensure protections for public interests during phasing.
