Update: Bloomingfoods, Century Village, and $500,000 Offer

November 15, 2018

Owner-Member Update Regarding Bloomingfoods, Century Village, and $500,000
Written by Maggie Sullivan, Board President

You may have seen a blurb in the newspaper on Wednesday (11/14) about how the development company Fountain Residential had offered $500,000 to Bloomingfoods to assist in its relocation of the East store.  This was a proposed “Reasonable Condition” amendment to their development proposal for Century Village, a 17-acre parcel at Third Street and SR-446.  The short update is that their development proposal was rejected, the development will not happen, and Bloomingfoods will not receive any financial contribution.  Thank you to the board members and owner-members who took time to attend the City Council meeting, which wrapped up about 1:30AM Thursday morning.  For more details and some thoughts for the future, read on.

In early November, City Council Representative Steve Volan reached out to see if Bloomingfoods might be interested in talking with Fountain Residential, a developer seeking approval for a project on the far east side of Bloomington.  He knew they were trying to adapt their proposal to be more appealing to City Council and he saw a potential win-win scenario: Bloomingfoods gets a great deal on a new location (the former Chapman’s Restaurant), the developers get a great amenity to offer to their residents, and the East side community gets to see Bloomingfoods in a new space that’s potentially even closer to a lot of our shoppers.

A few members of the Bloomingfoods board and management team met and toured the Chapman’s site, which is approximately 10,000 square feet.  It had already been on the list of properties to consider but as I told the developer, Bloomingfoods has just started the process of identifying and evaluating options.  There is a lot of work that goes into expanding or relocating a business.  We need to do market studies, feasibility analyses, cost projections, determine a store size, determine the store layout and product mix, evaluate internal readiness, and identify a site.  In fact, we need to step back even further than that.  Is our current grocery store model the best way to achieve Bloomingfoods’ Ends Statement or is there another model that would work better?  Should we be relocating the East store while keeping the Near West Side Store intact or should we be moving towards one consolidated large store to serve all of Bloomington?  And assuming we come up with a project that seems viable, how are we going to finance it given the $1.5+ million debt we carry from our failed Elm Heights expansion that deeply disappointed much of our membership?

The timing was especially complex because Fountain Residential needed approval of their project from Bloomington City Council at the November 14th meeting, because 90 days after a development proposal is presented to the Plan Commission it automatically is rejected and the developers have to start the process over with something substantively different.  This meant there was not an opportunity for Bloomingfoods to reach out to its owner-members for feedback and it also meant we were not in a position to ask for changes to the proposed 232-unit, 590-bedroom student-oriented development.  Even setting that aside, Bloomingfoods reiterated that we were unable to make any type of commitment before we completed our feasibility studies.

On Monday, two days before the city council meeting, Fountain Residential approached us with what is known in the planning world as a “Reasonable Condition” amendment to their development proposal.  They proposed a $500,000 contribution to the community as follows:

  • $250,000 of the funds would be given to Bloomingfoods at the time of their purchase or lease of land or building for a new east side store. The funds could be used for land or building purchase or lease, remodel, fixtures or any other expense related to a new east side store. The store can be located anywhere on the east side of Bloomington; east of High Street.
  • Bloomingfoods would provide a significant benefit to Century Village if they located in the Chapmans building. If Bloomingfoods locates the new east store in Century Village, then an additional $250,000 for a total of $500,000 will be contributed to Bloomingfoods for the east side store.
  • In the event that Bloomingfoods is not able to utilize all or part of the contribution by July31, 2021, then the remaining $250,000 or $500,000 would be contributed to Bloomington Transit for improvement of service to this area of the community.
  • Bloomingfoods will be given a “first right of refusal” on the Chapman’s building for a period of one year from the adoption of this ordinance to enhance and improve the opportunity and the chance that Bloomingfoods would want the Chapman’s site

With this wording, there was no commitment on the part of Bloomingfoods to accept the money or to endorse the project although it certainly did create an association between us and the development.   Given the quick turnaround time, I gathered input from my board and general management team and prepared the following statement to present at the City Council meeting:

“Thank you very much to Fountain Residential for this generous offer.  It’s true that we are struggling to find a way to relocate our East store and we appreciate the vote of confidence that Bloomingfoods is worth investing in as Bloomington institution.  Bloomingfoods has only recently become aware of this project and as we are a cooperative of 12,000 owner-members we are not in a position to support or oppose the proposal, although some of our owner-members present tonight will be voicing their concerns for its impact on the East side.  Thank you to City Council for continuing open discussion about the project and for your service making decisions that impact our town.” 

Most of the people who spoke at the meeting (many of them Bloomingfoods members) opposed the development project.  Key concerns included the impact on traffic, the appropriateness of student housing on the edge of town, the high density, and a concern that this would be a cheaply built development that would turn into a slum in five years.  Several Council and staff members provided counterarguments to many of those points citing traffic studies that showed minimal impact from development, student housing located directly across the street, and the fact that if this parcel of land fell under typical zoning requirements along Third Street it would be allowed to have a similar if not higher density.

There were also many who decried bringing Bloomingfoods into the project, equating it to bribery of “pay to play” activity.  The developer responded by pointing to the fact that landlords frequently provide funds for their commercial tenants to improve a site, knowing that the landlord will benefit from having an attractive business on their site and will also benefit from whatever structural improvements are made to the building.  Council members had a lively debate about what kinds of Reasonable Conditions were appropriate and which were not before striking down the proposed Reasonable Condition involving Bloomingfoods.

Ultimately, City Council voted against the project with 8 council members opposing and 1 abstaining.  It was a fascinating (yet grueling) look into how our government works and I think the experience was very useful in helping identify questions that Bloomingfoods needs to consider as we look at relocation options.

  1. Is it appropriate for Bloomingfoods to receive financial support from a developer as part of a development proposal and if so under what conditions?
  2. When in the process does membership need to be involved, particularly if things happen quickly or if there are concerns about competition? (I have heard more than a few stories of co-ops who identified specific properties of interest and shared them with their membership, only to have competitors read those newsletters and scoop up the target property.)
  3. How should Bloomingfoods respond when there are some owner-members who oppose a project?
  4. What expectations/requirements does Bloomingfoods have for partnering with a developer? We still have the option of working with Trinitas on the development of the K-Mart site and I think there will be a lot to talk about as that proposal takes shape.  (Right now the project is on hold as Trinitas focuses on a different site on Arlington Road but I expect to see activity early in 2019).  Are we willing to support the very high density development they have presented, with apartment buildings potentially up to 10 stories high?  Are we as shoppers ready to move into a new space where the only parking option is in an attached parking garage?  What else should we be considering?

Through it all, the Board remains committed to being as transparent as possible.  I welcome any feedback on this recent experience and what you might have liked to have seen done differently.  I thought one of the big takeaways last night was the communication disconnect between the developer and the area residents.  The developer felt they had done what was required to reach out to neighbors and in fact was disappointed that so few people participated in their public input sessions.  The neighbors felt that they had been intentionally left in the dark about the project so that they couldn’t voice their opposition.  I suspect the truth is somewhere in between.  However, it seems clear to me that the burden lies on the developer, and in my case the burden lies on me, the board president, to continually improve communication efforts with our owner-members.  Please continue to let me know how I can keep you informed and engaged.   

Thank you,
Maggie Sullivan
Bloomingfoods Board President
812-345-1592 (cell)