Bloomington Trades District

Introduction

Past sessions of the Business Planning class have focused on startups and other sorts of private businesses. This includes lawyers starting technology companies to address outdated habits of the legal profession to a new generation of small business owners looking to breathe life into a community-staple ice cream stand to sell-side investment banking that a focus on specific industry verticals.

In contrast, the Bloomington Trade District (BTD) case study attempts to solve a different type of problem. Instead of identifying an issue that impacts a certain part of a single industry, the Trades District takes on one of the biggest underlying issues communities around the country face today: local economic revitalization based upon that attraction, growth, and retention of high-value knowledge work employers.

The class for the Bloomington Trade District has held on Thursday, September 21, 2023. Our featured speaker was John Fernandez (IU Law ’92), who is Senior Vice President of Innovation and Strategic Partnerships at the Dimension Mill.

What is the case study about?

This is the story of one man who, thanks in part to his wide range of life experiences, finds himself with the unique ability to help breathe life into his hometown. As will be discussed, what adds to the complexity of the Trades District’s mission is the intersection of public and private industry cooperation that is needed to breathe new life into a community and ultimately lift thousands of people to a higher standard of living. The Trades District aims to do this by creating an environment with the sort of attributes that will attract technology companies—attributes like a high standard of living, economic prosperity, a wide variety of social attractions, and an environment that workers would want to raise a family in.

The Bloomington Trades District is the product of a distinctive public-private partnership between the Bloomington city government and a nonprofit organization called the Dimension Mill. While the Dimension Mill began as a co-working space, it has since become a catalyst for entrepreneurship in southern Indiana and has stepped into a project management role as it oversees the commercial development of a large parcel of prime downtown Bloomington real estate that is owned by the city. The Dimension Mill’s non-profit structure—and its close connection and cooperative relationship with the city government it is employed by—means that the Mill is uniquely positioned to steer the development of this project.

John Fernandez, former attorney, government administrator, and mayor of Bloomington, has spearheaded these efforts for the past few years. John’s career path will be examined in detail, as each stage of his career played a key role in preparing him for the leadership position he holds today.

This case study is organized into the following six sections:

1. John’s Background and Career surveys John’s personal background, career, and experiences that have uniquely qualified him for his current endeavors as Senior Vice President of Innovation and Strategic Partnerships at the Dimension Mill.
2. History of the Dimension Mill and the Trades District Area provides relevant details on the history of the Dimension Mill, the land on which the Bloomington Trades District is located, and the importance of that area to the community.
3. Current Development covers the Trades District’s current activities, focusing on the development project’s fundraising and financial aspects.
4. Plans for the Future discusses the next steps John and the Mill will take in the development process and the long-term purpose behind the Bloomington Trades District.
5. Business Planning Legal Analysis provides a more detailed analysis of three legal aspects of the Trades District development project: (1) partnership agreements, (2) real estate development issues, and (3) the benefits of a non-profit structure.
6. Connections to Other Case Studies discusses how various elements of other businesses covered this semester relate to John Fernandez’s career and the Trades District development project.

1. John Fernandez

A well-known Greek proverb says, “A society grows great when old men plant trees whose shade they know they shall never sit in.”  John Fernandez is the rare exception to that rule.

Following a long career in both the public and private sectors, Fernandez is currently in what could be called his defining chapter.  In his role as Senior Vice President of Innovation and Strategic Partnerships at the Dimension Mill, John is attempting to plant trees for future generations and has the unique opportunity to benefit from the shade of the trees he planted decades ago.

Using his significant experience as a lawyer, innovator, and civic leader, John has played a key part in developing the Bloomington Trades District, a Certified Technology Park encompassing several acres of previously underused real estate in downtown Bloomington. As development in the Trades District continues to prosper, John’s vision of a more technologically advanced and financially prosperous Bloomington comes nearer to fruition.

A. John’s Background

A diverse array of experiences and interests have prepared John Fernandez for his current role at the Dimension Mill. However, John readily acknowledges that he has taken an unconventional path.  While John’s story began in Canton, Ohio, his family moved around a few times throughout his formative years due to his father’s job as a machinist.  Notable stops during his childhood include his father’s work on the atomic program in Oak Ridge, Tennessee, and a number of years in New Orleans, where his father worked for NASA.  

John’s drive to help others can also be seen to come from his mother.  John says that once his family moved to Kokomo, Indiana, and he was in middle school, his mother also returned to school.  She would eventually go on to work as an operating room nurse. In fact, John would actually join his mother at the hospital where she worked after he graduated from high school.  Initially working part-time while in high school, John moved from the pharmacy department to a janitorial role right up until he was set to leave for college at Purdue University, where his father hoped he would study engineering. 

However, while his siblings had pursued engineering, John realized—only a few months before classes started at Purdue—that he desired a different path.  After this major decision, John returned to the hospital, working as a janitor for another two years.  However, John soon became motivated to attend college and eventually enrolled at Indiana University.

If young John had gotten his way, this would be a case study on his rock band, Paradox, instead of his legacy at the Mill.  “I thought I was going to be a rock and roll star because I was in a band,” John admits.  John says he could have probably foreseen his destiny as a lawyer due to his promise to his parents, recalling, “I promised my parents I wouldn’t play in a band my first semester.  I was very clear about [not playing] my first semester.”

John kept his word—though he promptly joined a band at the beginning of his second semester. However, a demanding touring schedule caused John’s academic performance to suffer, and by the end of his sophomore year, John was on academic probation. Soon, though, John doubled down on his studies and made the Dean’s List his final four semesters of college. However, because of his lack of dedication at the beginning of his collegiate career, his cumulative undergrad GPA was a fairly modest 3.02.

Fortunately, that was not the end of John’s academic journey. Rather than entering the workforce with most of his peers, John enrolled at Indiana University to pursue a Masters in Public Administration (MPA). While in grad school, John got elected to Bloomington City Council, thus laying the early groundwork for what would eventually evolve into his current work at the Mill. After earning his MPA, John attended law school at IU, still finding the time to serve and get re-elected to the Bloomington City Council.

B. John’s career in law, politics, and industry

While John is now leveraging his experience and expertise to give back to his community, his early career was defined by years of networking and planting seeds for future growth. Indeed, the connections John made and the experiences he gathered during this time period would be crucial for his future success.

After law school, John decided to go out and try different lines of work.  For his first post-law school job, he found a position clerking for an Indiana Supreme Court Justice.  After his time clerking for the Indiana Supreme Court, John joined a firm called Bingham, Summers, Welsh & Spielman (now part of Dentons).  However, John’s public service calling would not let him remain in the private sector for long. During his third year as an associate at the law firm, John was elected mayor of Bloomington, a position he held for two terms. 

John’s first stop after his mayoral stint was at a national strategic marketing firm headquartered in Bloomington that was focused on healthcare.  John eventually veered off from that company and joined a real estate holding corporation that focused on office buildings. Yet again, though, public service was calling to John, and he became involved with Barack Obama’s presidential campaign in 2008 as he helped lead the Indiana team.

John’s efforts with the Indiana campaign soon paid dividends that most people in public life could only dream of. After being asked to join the Obama administration, he and his family moved to Washington, D.C., where he ran the Economic Development Administration during President Obama’s first term.

However, there came a point when he knew he needed to leave the political machine in Washington and all of the costs that came with it. The financial strain of living in Washington, D.C., on a public servant’s salary made John anxious to return to the private sector; possibly more importantly, he had also promised his wife that his time in Washington would be a “two-year deal” and he was already on borrowed time by the end of the four-year term.

Nonetheless, his connections in the political world would ultimately help him successfully transition back into the private sector. During John’s time as mayor of Bloomington, he had become friendly with Joe Andrew, who at the time was the Indiana Democratic Party Chairman. Mr. Andrew would eventually go on to become the National Democratic Party Chairman.

As his tenure with the Economic Development Administration ended, John went to visit Joe.  When John was telling Joe his dilemma about deciding what career choice to make next, Joe invited him to join Dentons, a law firm with an ambitious plan to grow and expand globally. In what has become John’s typical fashion, he responded, “Yeah, sure, why not?”

John’s tenure can likely be considered a success; when John joined in 2012, it was a fairly large firm with around 2,000 lawyers, but their goal was to become a global powerhouse—and by the time John left Dentons at the end of 2022, it had grown to 208 offices in 90 countries with 12,000 lawyers.  

John’s time at Dentons is when he started to really consider the changes that he felt needed to be made to the law firm model and the challenges he knew the industry could handle better. “Part of my gig was to help grow the firm,” John says.  “The other part of the gig was figuring out how to innovate the firm.”  John realized the magnitude of the task given to him and found a different approach was needed to spark innovation from within the firm. 

Over the course of John’s career, he realized that there was not a great deal of innovation in the legal tech world. So, John convinced Dentons to create a fund to invest in legal tech companies using partners’ money. This program grew and led to the creation of Nextlaw Labs and Nextlaw Ventures, programs in which John held senior roles in during his time at Dentons.

John also faced the challenges of driving innovation within traditional law firms. Many of the difficulties of messaging and getting buy-in from partners in law firms were similar to the political campaigns with which John was now familiar. Additionally, he encouraged these companies to focus on selling to clients rather than law firms due to the complexity of law firm decision-making processes. This helped John realize that most law firms were not geared toward innovation; while stable and reliable, the traditional law firm model left much to be desired.  However, the challenge was convincing partners that the business model that consistently made them profits was the wrong business model to use. 

Despite the challenges of creating change within the traditional law firm model, John stresses the importance of maintaining a good rapport with colleagues and always keeping those relationships intact.  During his third and final year at Bingham, Summers, Welsh & Spielman, some of the firm’s partners were unhappy because John—who was focused on campaigning prior to the Bloomington mayoral election—was billing fewer hours than usual.

However, John was able to successfully maintain those relationships. In fact, towards the end of his tenure at Dentons, John actually worked on a merger that rolled Bingham, Summers, Welsh & Spielman into Dentons in a deal that would call on much of the significant practical experience and technical expertise that John gathered from his prior roles. While this would be one of the last big projects of John’s time at Dentons, he was about to embark on arguably the most ambitious project of his career.

2. History of Dimension Mill & the Bloomington Trades District

The next stage of John’s career, covered in the following section, begins with his involvement with the Dimension Mill, a 501(c)(3) nonprofit operating as a center for entrepreneurship that serves Bloomington and the surrounding region.

The building that houses the Dimension Mill was once part of the Showers furniture company, a historic Bloomington company known for its furniture manufacturing innovation. The Showers company was a major employer in Bloomington, and the physical (and economic) empty space left after its closure impacted the community for decades. After the factory and associated buildings closed in 1959, the site essentially became a brownfield that created no value to the community and was generally considered to be an eyesore.

This problem persisted for around 60 years until the city of Bloomington capitalized on the “stranded asset” of the site’s prime downtown location and began redevelopment projects. Long after the Showers company went out of business, the Showers company’s mill and its surroundings were beginning to be repurposed for modern economic development and innovation after being transformed into the Dimension Mill.

The Mill now offers programming to support startups and new businesses, provides coworking space for around 355 members, and rents offices to companies needing office space. The nonprofit status of The Mill allows it to receive support from foundations and corporate contributions, making its operations more cost-efficient.

The building where the Dimension Mill’s coworking space is located is owned by the Bloomington Redevelopment Commission, which is an arm of the Bloomington city government. The Redevelopment Commission leases the building to the Mill, which runs various programs and activities within it. For example, the Mill operates Flywheel, an early-stage investing group with about 60 companies in its portfolio.

Perhaps more promising is the fact that over the last year, various pitch competitions for startups and other entrepreneurship-related organizations have started using the Mill’s facilities—including a special session of this Business Planning course. In January of 2024, IU Law’s Elmore Entrepreneurship Law Clinic relocated to the Mill.

Meanwhile, the Bloomington Trades District (a multi-acre parcel in downtown Bloomington on which the Mill is located) is a Certified Technology Park (CTP) that is strategically positioned to capitalize on the burgeoning tech sector in the Midwest, particularly in Indiana.

Defying its Rust Belt reputation, Indiana has become a hub for startups and technology innovation, especially in nearby cities like Indianapolis. The Trades District is uniquely designed to leverage this regional momentum and channel its benefits to Bloomington.

According to Fernandez, Bloomington is well-poised to harness the wealth of assets in and around the region, particularly in its proximity to Indiana University. Likewise, the proximity to the Crane Naval Base offers opportunities for collaboration that can help attract knowledge workers to the area. The Bloomington Trades District will also benefit from its proximity to the “16 Tech” development district in Indianapolis, creating a network of tech parks that facilitate growth and innovation.

John’s involvement with the Mill was initially similar to that of any other regular customer; he said that he “started coming in the middle of work just to get out of my house [while working remotely].”

However, John soon found himself socializing with other members and began wondering why there was not more activity happening at the Mill. John also began feeling troubled by the city of Bloomington’s relative lack of a thriving knowledge-worker community and the fact that Bloomington trailed much of the nation in various economic factors (including wages). This spurred John’s desire to approach the city government to leverage the Mill to attract economic activity and use the Trades District’s advantages.

3. Current Development

The first step towards making John’s vision a reality actually began long before John’s involvement with the Mill.

A. Bloomington Redevelopment Commissions buys land

In 2011, the Bloomington Redevelopment Commission purchased 12 acres of mostly undeveloped land from Indiana University that was being underutilized. In 2019, the Dimension Mill’s current location in the former Showers factory was opened after renovations funded by the Redevelopment Commission. The Redevelopment Commission later received millions of dollars in federal grants for the development of the district, and—in 2023— the city entered into a partnership agreement with The Mill to lead new building development and Trades District management.   

Another party that aided in securing these federal grants was the Bloomington Economic Development Corporation (BEDC). This organization is not officially part of the local Bloomington government, but instead is a private group that is funded by local businesses and grants from city and county governments. This group is involved in stimulating business activity across the Bloomington area and is focused on driving growth and improving employer and employee retention in Bloomington.

B. Tax Increment Finance (TIF) explained

John and the city of Bloomington were able to speed the development of the Trades District by making it a tax increment finance (TIF) district.

A TIF is a mechanism local governments use to stimulate economic development in specific areas. See City of Bloomington, “Tax Increment Financing,” City of Bloomington (Apr. 6, 2023). In a TIF district, a base property value is established, and the tax revenues generated from that base value continue to fund essential public services such as schools and infrastructure. However, any increase in property value and tax revenue generated within the TIF district, known as the “tax increment,” is set aside for reinvestment in that district. This financial growth can be used to finance infrastructure improvements, attract businesses, create jobs, and revitalize the area.

The graphic below further explains how TIFs function and illustrates visually how the surplus gathered from increases in a property’s assessed value and tax revenue (beyond the previously established baseline) can be used to fund further developments.

In the case of the Bloomington Trade District, establishing a TIF district enabled the redirection of tax increments to support the ambitious development and revitalization, helping transform the area into a hub for innovation and economic activity.

C. Community Revitalization Enhancement District (CRED) explained

A related source of capital for the new tech center building is a Community Revitalization Enhancement District (CRED). See Indiana Economic Development Corporation, “COMMUNITY REVITALIZATION ENHANCEMENT DISTRICT TAX CREDIT (CRED),” Indiana Economic Development Corporation (2024). A primary advantage of a CRED is that, in addition to increases in the property tax base, it also captures increases in sales tax and payroll tax. 

While John calls the CRED essentially an “uber TIF,” the idea came about due to his involvement, along with fellow IU law grad Randy Lloyd, in finding a solution to a major community-wide setback. During John’s first term as mayor of Bloomington, a large manufacturer on the south side of town closed, causing the loss of roughly 2,600 jobs and the city’s single largest source of property tax payments. Faced with a sizable decrease in tax revenue, John and other Bloomington leaders knew they would need to do something to draw new revenue into that part of town.

Under the CRED legislation that John helped get approved, the State of Indiana essentially became a co-investor in economic development in Bloomington; however, the idea was that eligible projects would only benefit if their ideas were successful.   John explained the idea this way:

Ultimately, the state went for the idea.

While this legislation was initially only passed for Bloomington, the State of Indiana has now rolled out this initiative to several areas around the state, including a second district right here in Bloomington.  In this way, John—in his current leadership role at the Mill—could “catch a pass” that he threw many years ago when he was the mayor of Bloomington. 

Through private and public funding, the Bloomington Trades District has received $8.9 million in committed funding for its next projects (such as the new building and the hotel). However, this figure pales compared to the projected $218 million in economic impact that the Trades District is estimated to generate over the next ten years.

4. Plans for the Future

This section discusses John Fernandez’s future vision for the Trade District. In addition, it ties back into the full arc of John’s career, helping students and other readers appreciate the personal joy and satisfaction of solving complex problems on behalf of a community. In short, it connects career with purpose.

A. John’s vision

John’s vision for the Bloomington community extends beyond the conventional boundaries of a typical tech park. While recognizing Bloomington’s and Indiana’s existing wealth of resources and an active startup ecosystem, he aspires to foster substantial population growth and transform the city into a magnet for companies and young professionals.

John knew remote workers from prestigious companies already utilized the Dimension Mill’s co-working space, but his ambitions quickly grew beyond individual co-working. The core goal of the Trades District is to draw entire organizations, setting in motion a thriving and welcoming atmosphere within Bloomington that will boost the local economy.

The next big development project on the horizon for the Trades District is a new tech center building. Spanning 22,000 square feet, this purpose-built structure will offer multi-tenant office space with additional amenities, including a social hub, a large training room that can be expanded for various uses, and some basic tenant spaces. This building will be the first step in developing the district and will serve as a hub for technology-based companies and individuals alike.

The related project currently in development is constructing a hotel that will be built adjacent to the new technology center in the Trades District. This hotel will be built by Alluin Development, LLC, a property development firm that purchased land in the Trades District for $1 million and plans to build a $35 million hotel on that site. In addition to providing a place for visitors to stay when coming to the area, John believes that the hotel is the first step in creating a “neighborhood” in the Trades District (complete with dining, other amenities, and eventually residential space) that will be attractive to companies and workers considering a move to the area.

Just as with the land where the hotel will be built, John hopes to sell (rather than lease) the remaining parcels to private developers, creating a large financial return for the city. Indeed, in addition to the initial revenue from the sale of the land, John estimates that the hotel will eventually generate roughly $430,000 a year in property tax revenue as well—revenue that can be used to fund further development in the District.

John and the Mill also see the next piece of the puzzle.  In addition to having plans in the works for the hotel, John indicated that three other large parcels are planned for development. Per the graphic below, John envisions an area that is a “magnet” for the kind of innovative companies and workers that the Trades District seeks to attract.

The long-term goal is to create a self-sustaining community where people will enjoy spending time, both for work and for recreation. John explains, “It’s got to be in a place where I can walk outside, have lunch, go grab a coffee, have drinks, meet my friends.” If so, the subsequent growth will all be organic.

The Trade District is part of a broader public policy vision for both Bloomington and the state of Indiana. John envisions efforts such as the Mill attracting high-tech companies to the central Indiana region, which would jumpstart an overall revitalization of the area. John recognizes that the Midwest, with the exception of Chicago, is not typically thought of as a hotspot for tech startups. He believes that this issue comes down to wages, noting that Bloomington (and the state of Indiana as a whole) lags the rest of the country (see below graphic).

The problem of lower wages pours over into other areas of life that the citizens of Bloomington know all too well, and John believes that the economic activity generated by the Trades District can help address these problems (such as affordable housing difficulties).

John also wants to make Bloomington a more desirable location for remote workers as well. He has been involved in a program called “Remote Bloomington,” which has used money from the city of Bloomington to recruit remote workers. This program has been successful so far and has helped attract remote workers from prestigious tech companies such as Google and Spotify. John believes that a sizeable base of knowledge workers—whether working for a local company or remotely—will help attract more economic activity to the area and drive growth.

While Bloomington clearly benefits from having Indiana University right in its backyard, John sees another benefit that the area offers that may speak to future startups looking to relocate. The Trades District is almost halfway between Indianapolis’ 16 Tech, a 50-acre tech district in downtown Indianapolis.

In addition to Indianapolis and Bloomington, Southern Indiana also has the Crane Naval Base, which is the second-largest naval base in the world by acreage and a hub for innovation in its own right. “They’re a member of the Mill,” John says matter-of-factly as if every incubator has a major industrialist among their clientele.  This is exactly the kind of catalyst that John thinks the Mill needs to help propel Bloomington and the wider area forward and achieve the kind of scale necessary to compete with larger tech hubs like Chicago. 

B. John’s personal success & continued motivation

While some of his past career decisions were based on financial considerations and the need to provide for his family, John—at a point in his career when many of his peers would be inclined to put their feet up and reflect on their success—is now motivated by striving to make his community a better place to live.

John explains:

Indeed, between his time on the Bloomington city council, as the mayor of Bloomington, and in his current role as the informal “mayor” of the Trades District, John has dedicated more than a few years of his life to pursuing this purpose.

The fact that John and the Mill have such a strong relationship with the city of Bloomington has allowed them to take the necessary approach towards solving the real problems that the city faces rather than focusing on short-term profitability, which is what the private sector is often most concerned with. Indeed, if the Trades District development was solely a private-sector venture, John estimates that the area would have already been developed years ago and filled with more student housing and mixed-use buildings. However, John and the Mill are mainly thinking about the long-term changes that they can make to the community.

John realizes that there are still many moving parts needed to eventually get the city of Bloomington and the surrounding area into the spot that it needs to be to draw in these next-generation employers and that the community will need to grow to be attractive to such companies and their employees. That’s where John sees the benefits of having a community of development come into play—he believes the District will not only help with recruiting innovative companies and employees to the area but it will also have a “dramatic impact” on Bloomington’s ability to retain them. 

5. Business Planning Legal Analysis

Much of the success that the Dimension Mill and the Trades District as a whole have enjoyed recently is due to careful business planning efforts undertaken by individuals such as John Fernandez. This includes several technical components summarized below.

A. Partnership agreement

As of 2023, the Bloomington Redevelopment Commission has entered into a partnership agreement with the Dimension Mill. Per the terms of the agreement, this partnership will remain in effect until its termination date on December 31, 2025, though an extension of its duration will almost certainly be approved by the Redevelopment Commission.

This public-private partnership is interesting as it involves three parties: (1) the city of Bloomington, (2) the Redevelopment Commission, and (3) Dimension Mill. These first two parties to the partnership are public entities, while the Dimension Mill itself is a private nonprofit entity. The Bloomington Redevelopment Commission is an arm of the Bloomington city government, and it is comprised of five members, three of whom are appointed by the mayor and two of whom are appointed by the city council. 

With the approval of the partnership agreement in May of 2023, the Dimension Mill was essentially hired by the city of Bloomington and the Redevelopment Commission to oversee the development of the new tech center building and generally to manage the development of the Bloomington Trades District.

Under this arrangement, the Dimension Mill—and, by extension, John Fernandez, in his leadership capacity at the Mill—acts as an agent of the Redevelopment Commission, handling the day-to-day operations of developing the land. However, John noted that the Mill’s control over the development process is somewhat limited. While the Mill can make some zoning and land sale decisions, the Redevelopment Commission must sign off on all major decisions. Furthermore, per the partnership agreement terms, the Mill must provide the city of Bloomington with written progress reports on all of its development and management activities related to the Trades District.

The partnership agreement between these parties was drafted and negotiated by several different attorneys for each side. John Fernandez was involved in part of the creation of the agreement, as was Angela Parker (IU Law ’94), a local attorney, and Beth Cate, Corporation Counsel for the city of Bloomington. John described creating the partnership agreement as a “collaborative” process. Fortunately, the mission of the Dimension Mill is very closely aligned with the goals of the city of Bloomington and the Redevelopment Commission in developing the Trades District, meaning that creating the partnership agreement was likely a fairly smooth process.

It would almost certainly have been more difficult if the Dimension Mill was a for-profit development company eager to maximize profits or secure a larger portion of Trades District resources. Indeed, John believes that if the Trades District was managed as a wholly for-profit enterprise, most of the area would likely have been dedicated to luxury student housing and mixed-use retail properties. However, with the public-private partnership arrangement, the Trades District is uniquely positioned to create a local seedbed that can foster growth in the areas of entrepreneurship and industrial investment that will benefit the community for years to come.

B. Real estate development issues

Several legal issues related to real estate development have played an important role in the Trades District’s story thus far. John’s significant past experience as a savvy public servant and attorney has enabled him to understand and navigate these issues properly.

Notably, in 2020, the Redevelopment Commission approved an application for a $2 million CARES Act grant, which was followed by the U.S. Economic Development Administration’s $3.5 million grant in 2021. In 2023, the city entered into a partnership agreement with the Mill to lead new building development and Trades District management.

Recent developments in 2023 include additional funding approval for the new Trades District building, the publication of a Notice of Offering for Trades District land in June, receipt of a Letter of Intent for a hotel project in July, and the formation of the Trades District Advisory Board in August. Construction bids for the new building are expected in September. As the Letter of Intent indicates, the hotel will not be run by the Mill or the city of Bloomington; instead, the hotel will be managed and operated by a 3rd party.

The Mill does not own the real estate where it is located; rather, it leases the building from the city of Bloomington (through the Redevelopment Corporation), which currently owns the land after purchasing it from IU over a decade ago. In addition to overseeing the construction of new buildings (such as the Tech Center and the nearby hotel) and the improvement of undeveloped land, the Mill is also responsible for facilitating the sale of parcels of the Trades District to private companies and developers. In many cases, a sale of the real estate would be preferable to a lease agreement, as a sale of land would allow the Trades District to provide a more substantial and immediate return on the city’s investment in the District. 

Any land sold within the district would carry with it a significant number of limitations on how it could be developed and used (such as covenants, restrictions, easements, etc.). See Donald Griffin, DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR THE TRADES DISTRICT SUBDIVISION, Bloomington Redevelopment Commission (2018). While some such limitations are common to real estate development deals (especially when a public entity is selling land to a private developer), the substantial restrictions placed on developers who purchase, lease, or otherwise use real estate within the District are intended to ensure that the John and the city of Bloomington’s long-term vision for the future of the Trades District is not carried off course by short-term private interests.

Additionally, the sale or lease of land from a public entity (such as the Bloomington Redevelopment Commission) to a private party must comply with various statutory requirements. For example, Indiana Code 36-7-14-22 imposes several requirements regarding appraisals, publishing public notices, bidding for developers and contractors, and other related matters. Similarly, Bloomington’s city government is legally required to publish (generally in a newspaper) an invitation to contractors to bid on certain work being done in the Trades District. John’s legal background has enabled him to understand and navigate such complexities effectively.

C. Benefits of a non-profit structure

The Dimension Mill is a 501(c)(3) nonprofit corporation. The goal of the Dimension Mill (and the Bloomington Trades District as a whole) is to, in John’s words, drive “technology-based economic development” in the Bloomington area.

One of the benefits of Dimension Mill’s nonprofit status is that it can raise financial support from a number of different sources, some of which would be inaccessible to a private, for-profit enterprise. For example, the sizeable U.S. Economic Development Administration (EDA) grant that the Mill received (intended to help fund the construction of the new tech center building) can only be awarded to nonprofit organizations. These EDA grants also carried with them other restrictions (such as the requirement that the Mill cannot sell the building where it is located for roughly thirty years) that are intended to further the public good and align with its nonprofit mission. 

The EDA grant to the Trades District was only made after consideration of a detailed description of the planned development, which was provided to the EDA in the grant application. Additionally, the grant was made with a number of conditions attached. The specific award conditions attached to the EDA grant included the following:

• Various deadlines that must be met as part of a project development schedule;
• A requirement of when the construction project must be entirely completed;
• The stipulation that the EDA will disburse funds on a reimbursement basis only;
• A requirement that various progress reports be furnished to the EDA;
• Other requirements related to budget management, accounting procedures, and several other associated issues.

All of these conditions must be carefully complied with to receive funding for the project. Obviously, the expertise of experienced legal advisors (such as John, who has a strong background in both law and public administration) is necessary to ensure this compliance.

One item of particular importance is the provision stipulating that the funds will only be supplied by the EDA on a reimbursement basis, meaning that if not all of the necessary conditions are met upon completion of the project, the funds to cover construction costs may not be disbursed.

Additionally, while the Dimension Mill has received numerous types of government funding (via tax incentives from the state, appropriations from the local government, and grants from the federal government), it has also been able to receive contributions from private corporations. These private corporations are likely incentivized to give money to the Mill due to the various financial advantages accompanying nonprofit contributions.

By taking advantage of the financial benefits of its nonprofit structure, the Dimension Mill’s operations are more cost-effective and efficient.

6. Connections to Other Case Studies

John’s time with the Mill shares several similarities with other speakers who have shared their stories in our business planning class. Several parallels can be drawn between the Mill and Re:Land Development. For one thing, both organizations operate in real estate development to improve their local communities. Furthermore, both rely upon partnerships, engaging a diverse range of investors and stakeholders, while also seeking public and private funding for development deals. The Mill, the Bloomington Trades District, and Re:Land Development all began by recognizing the untapped potential within their respective areas, focusing not only on economic growth but also on creating assets that will positively impact their communities.

Furthermore, John’s time exploring innovation in the legal and tech sectors is reminiscent of the LawyerMetrics, VisaNow, and AutoVisas case studies. Each of those companies had to overcome a significant hurdle to drive sales: their leadership had to learn to sell their services to law firms, which was often quite difficult due to the large number of skeptical law firm partners who would have to sign off on the products. John faced similar struggles when he was trying to encourage technological innovation at Dentons, where he invested in legal tech companies and coached founders on how to sell their services.

Additionally, John’s experience at the Mill aligns with the story of the Chocolate Moose. John and the current management team at the Chocolate Moose both assumed leadership roles within already-established organizations, demonstrating their ability to foster improvement and change while still respecting the roots of these institutions. The capacity to adapt to a preexisting organization and to balance a respect for the past with the need for innovation is a testament to their leadership skills.