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State Farm To Demolish Downtown Building After Sale Falls Through

Downtown SF building
The downtown Bloomington building served as State Farm’s headquarters until 1974 and was once home to 400 to 500 employees.";

UPDATED 11 a.m. | State Farm said Thursday that it plans to demolish its former downtown Bloomington building after the planned sale fell through.

The change of plans comes after a 90-day due diligence period came and went earlier this summer, leading to questions about whether the sale would close. State Farm announced in March it had found a buyer for the downtown building. The buyer was never identified. A broker said a restaurant, retail space, and offices were planned.

"How many more years does it need to be on the market to determine that it just maybe wasn't meant to be?"

Now, the building will be demolished instead.

"Despite the best efforts of all parties, the purchase and sale agreement, which was announced in March, did not materialize," State Farm said in a statement Thursday.

It's unclear what exactly derailed the sale. State Farm spokesperson Gina Morss-Fischer said the company conducted "an exhaustive and thorough search for a buyer" and "gave much thought and consideration to next steps" after the sale fell through.

"We secured a national search firm, reviewed many proposals, accommodated several tours of the property, and were open to all inquiries," she said. "It is a very large building and it’s not uncommon for this to happen in complex real estate deals. With a sale not materializing, the continued costs of maintaining a building of that size and the impacts on downtown with it remaining vacant without interest, this was the most viable option."

Morss-Fischer said State Farm considered other options, including donating the building.

"A lot of things must come together to make donation a feasible option. For example, the building will still carry significant costs to the recipient, including ongoing maintenance," she said.

WGLT's attempts to reach Jill Guth, the broker handling the sale, have been unsuccessful since early June.

“It is an amazing building. It’s in outstanding shape,” Guth said in March. “It’s been very, very well taken care of. Our plan is to breathe some new energy into the building.”

Community Reaction

The demolition presents another economic development challenge—and opportunity—for city leaders looking to revitalize downtown Bloomington.

Bloomington Mayor Tari Renner said the city will continue its efforts to revitalize downtown, despite this setback. There are some advantages to having a shovel-ready site available in a location like that, he said, if a developer wanted to pursue a hotel or retail.

"The loss of that building is sad for those of us who are interested in historic preservation," Renner said. "It was, in a sense, the skyline for Downtown Bloomington. It's certainly a sad day in that sense."

Renner added: "We've certainly had our successes (downtown). This is not one of them." 

Thursday’s news came as a surprise to many.

“I think we were all sitting here on the edge of our seats hoping the transaction—and the building stays and gets renovated—would happen,” said Greg Yount, manager at Coldwell Banker Commercial real estate in Bloomington.

He said a vacant lot could be easier to build on versus redeveloping and filling an aging 13-story building. As much as we’d like for the building to fully occupied, there’s just too much space, he said.

The building was on the market for more than a year.

“Sometimes you gotta take a step back before you can take two steps forward in terms of progress,” Yount said. “It’s been on the market for a long time. How many more years does it need to be on the market to determine that it just maybe wasn’t meant to be?”

Bloomington District 87 schools will lose about $150,000 per year in property tax money when the building goes away.

District 87 Superintendent Barry Reilly said to put that in context, that amounts to about three teachers per year. Reilly said another way to consider the loss is as an offset to the amount of money the state has increased general aid for District 87 under the new funding formula.

Reilly said District 87 will adjust, but it is a significant decrease.

Bloomington City Manager Tim Gleason said "State Farm's efforts to preserve (the building) were truly exhaustive." 

"Today's announcement is a reality that must be accepted," Gleason said. "State Farm continues to impress me with their commitment to community involvement."

Demolition Timeline

The demolition process will begin within a few months and take about a year, to minimize risk to the public and other nearby structures, State Farm said. State Farm says it has carefully removed and preserved all historical items from the building for eventual display at corporate headquarters and other facilities.

State Farm’s downtown building has been an iconic part of the Bloomington-Normal skyline. It was built in pieces. The first floors were completed in 1929, a new home for retired farmer and insurance salesman George Jacob “G.J.” Mecherle’s growing 7-year-old company. The final stories weren’t added until 1945.

The building served as State Farm’s headquarters until 1974 and was once home to 400 to 500 employees. The last batch of employees were relocated out of the building last year, when State Farm put it up for sale. The “State Farm Insurance” signage came down last fall.

State Farm has long been the leading corporate citizen in Bloomington, said local historian Greg Koos, who previously ran the McLean County Museum of History.

"The actions of a corporate citizen to walk away from the central city, and destroy an asset that has considerable future use, would seem to signal a withdrawal from its obligation as a citizen," Koos said.

The building is in excellent condition, he said.

"As a massive, physical asset in the center of our community, to cut that out is a radical surgery where I fear that the patient would not survive," Koos said. "The patient being the center part of our city."

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Ryan Denham is the digital content director for WGLT.
WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.
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