Southtown Shopping Center in Bloomington to be slowly transformed

Fans of the Southtown Shopping Center can relax. The icon of postwar car culture, a fixture in Bloomington since 1960, won't be rezoned out of existence.

But it will be gradually transformed over the coming years into a more pedestrian- and transit-friendly development, in line with the vision of Bloomington leaders who plan to remake the face of their city for the 21st century.

The city and the center have reached an agreement that gives both sides what they want, officials said Tuesday. In the short term, Southtown will remain as it is. But over the long term, the center will be required to follow new zoning guidelines in any major redevelopment that takes place.

The agreement, expected to be ratified by the City Council next month, is the culmination of a planning process that goes back 20 years. But things heated up over the past 12 months, as Southtown owner Kraus-Anderson Realty resisted new zoning laws that could have forced Southtown to begin making changes immediately.

On Tuesday, both sides said they were happy with the deal.

"The agreement is really a classic win-win," said Glen Markegard, Bloomington's planning manager. "Kraus-Anderson will have the flexibility for Southtown to evolve with the market, and the city will have the assurance that future development will meet the vision of the Penn American District plan."

That includes items like a street grid, sidewalks, multi­story buildings and mixed-use areas with housing, office space, hotels and shopping. It's a far cry from Southtown's current layout, which is about 40 acres dominated by a giant asphalt parking lot ringed with a strip mall and big-box stores.

And the owner's reaction is a far cry from last fall, when Kraus-Anderson claimed it was being "railroaded" by the city.

"It gives us the flexibility to move forward," said Kraus-Anderson spokesman Ken Vinje. "It's going to change, but not in the immediate future." Vinje said shoppers might not see big changes to Southtown's basic layout for as long as 20 years. The center has remained popular and is currently 99 percent leased, he said, so the owners are in no hurry to tinker with the recipe.

The changes, when they come, will be dictated by the level of redevelopment at the center. Existing buildings will be allowed to make minor changes — growing by as much as 10 percent or downsizing by as much as 30 percent. Beyond those limits, the new zoning requirements will kick in. So if a building were mostly or completely torn down, any new construction on the site would have to follow the grid-and-sidewalk model.

Redevelopment will happen much sooner on the east side of the complex, where the planned Orange Line express bus will run through the property on Knox Avenue S. There, Kraus-Anderson is already considering a transit-oriented development on the parcel that currently houses Lucky's 13 Pub, Vinje said. That project could include retail, apartments and a hotel.

The agreement also gives Southtown the right to tear down two buildings: the vacant Ward's Auto Center, and a one-story annex connecting Herberger's with Bed Bath & Beyond.

Markegard said the agreement is an important step in remaking the area, but more remains to be done.

"We are very happy to be moving forward," he said. "Having the zoning in place will allow us to focus on the next steps, which include transit and freeway improvements" to Interstates 35W and 494.

John Reinan • 612-673-7402