The main campus of Indiana University is in Bloomington, so the city has all the advantages of being a college town: lots of historic buildings, concerts, plays, restaurants and sporting events. The large student population supports a lively nightlife and music scene, which regularly draws people from other parts of the state. Bloomington is about 40 mi/65 km south of Indianapolis.
Visit the university's excellent art museum (designed by I.M. Pei) and look for the Thomas Hart Benton murals in various buildings around campus. Also, make an appointment to tour the Lilly Library on campus, across from the art museum. There you can find a Gutenberg Bible on permanent display, as well as revolving literary exhibits, ranging from historic pop-up books to Ian Fleming's James Bond manuscripts. http://www.indiana.edu/~liblilly.
Chorten, the only Tibetan memorial in the U.S., is at the Tibetan Cultural Center in Bloomington (http://www.tibetancc.com), as are the Snow Lion and Anyetsang's Little Tibet, two of only a handful of Tibetan restaurants in the country.
The Little 500, the bicycle race featured in the movie Breaking Away, is held in Bloomington in mid- to late April. Usually referred to as "Little 5," the bike race is the main event of what has been called the "world's greatest college weekend." It includes various other competitions—including a tricycle race—but the main event is a continuous party that joins serious and casual bikers, IU alumni and student revelers from all over the Midwest.
Lawrence County, south of Bloomington, is known as the Limestone Capital of the World. It's the center of the Stone Belt, which extends from Putnam County on the north and Owen, Monroe, Lawrence, Washington, Orange and Crawford counties to the south. A self-guided tour of Bedford includes limestone houses, businesses and public buildings. Check http://limestonecountry.com for driving directions.
Also south of Bloomington, Hoosier National Forest roughly follows Highway 37 down to the Kentucky border. This scenic area makes a pretty drive, especially in the fall. The whole length of the forest contains (and is fringed by) several state park and recreation areas, providing the opportunity for hiking, camping, boating and swimming. http://www.fs.fed.us/r9/hoosier.
Indiana's first state park, McCormick's Creek, is about 20 mi/32 km northwest of Bloomington in Spencer. You'll find waterfalls, some unusual limestone formations and the Canyon Inn. http://www.in.gov/dnr/parklake/parks/mccormickscreek.html.
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