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Puff piece ignores controversy on Matthews Market disposition

The Journal Star just published a puff piece on East Peoria developer Gary Matthews written by the recently retired Paul Gordon. It includes this gloss over the disposition of Matthews Market:

Matthews returned to Peoria – something he’d always planned to do – and went to work for his father at Matthews Market in the early 1970s after they made peace with each other. The idea was that he’d take over the business some day.

“But I didn’t like the grocery business. I don’t know why, exactly, but it just wasn’t for me,” he said.

He got his real estate license and went to work for David Joseph in his company’s residential real estate division. “My dad was disappointed, but he understood. He sold the grocery store after I left.”

Well, there’s a lot more to the story than that. And it’s all chronicled in erstwhile reporter Gordon’s own newspaper’s archives.

Matthews Market was located at 1500 NE Jefferson and was open until December 1992 under Gary Matthews’ ownership. It closed reportedly due to crime and urban decay in the neighborhood, as well as competition from larger grocery stores. The store still carried a mortgage and a lien, but suddenly the City of Peoria was interested in acquiring the property. On January 16, 1993, the Journal Star reported this:

Peoria’s second police storefront is expected to open this spring in the former Matthews Market building, 1500 NE Jefferson.

The City Council will be asked Tuesday to approve a deal to acquire the building.

The city’s cost is expected to be $135,000, provided a deal can be worked out with Northside Neighborhood Housing Services. That deal would involve the trade of a city-owned house at 1120 NE Jefferson in exchange for the housing service releasing its $33,000 lien on Matthews Market.

First of America Bank holds the first mortgage on the building, which closed in December.

The city’s first police storefront opened Dec. 15 in a city-owned building at 101 N. MacArthur. In addition to neighborhood policing, the storefronts deal with zoning and code enforcement issues.

“What it represents is the partnership of the city, community-based policing and the neighborhood,” 3rd District Councilman Dave Koehler said. “Hopefully, (area residents) will have an ear for their concerns and complaints that is more readily available.”

Development Director Tom Tincher said the second storefront is expected to open within 90 days. Police Chief Keith Rippy said last year he plans to open a total of five storefront police offices throughout the city.

Pretty sweet deal for Mr. Matthews. He had more into the store building than it was worth, but the City was willing to take it off his hands for the cost of the amount owed on the property. Controversy erupted on February 11, 1993, when this story broke:

Third District Councilman David Koehler showed poor ethics in mingling his private matters with Peoria City Council business, his opponent in the upcoming election said Wednesday.

Koehler responded by calling candidate Nina Nissen’s charges “politics of desperation,” and added that Nissen is ethically suspect herself for mounting a “smear” campaign.

Nissen, a former assistant personnel director, issued a statement Wednesday calling for a “cleanup of City Hall in the area of ethics.” In recommending a city ethics code, Nissen questioned … the city’s recent purchase of the former Matthews Market, 1500 NE Jefferson, for use as the city’s second police storefront. The city will assume a $135,000 first mortgage on the building and swap another house to the Northside Neighborhood Housing Service to clear up a $33,000 lien.

The problem, Nissen said, is the building is owned by Koehler’s former campaign manager, Gary Matthews.

“It’s wrong if Koehler used his influence to help his campaign manager benefit from an action of the City Council,” she said. “Sure, we need a storefront. But does it have to be Matthews Market?” Koehler said Gary Matthews is no longer involved with his campaign. Koehler’s campaign organization statement on file with the city clerk lists Matthews as his chairman, but Koehler said the statement — — filed in July 1990 — is outdated.

“Yeah, Gary helped me out” in his 1989 campaign, Koehler said, adding that he kept a distance from the Matthews Market negotiations. “In terms of whether there was any special favors on my part for Gary — no.”

Koehler won reelection, but not before more criticism was heaped on the project. The following article appeared in the Journal Star on February 22, 1993 — which is also when we learn that, in addition to a $135,000 mortgage and a $33,000 housing service lien, Gary Matthews still owed $65,000 to the City of Peoria for a loan they gave him as well:

A local political organization claims city officials are wasting taxpayers money by purchasing a deserted grocery store for a storefront police station.

Peoria’s second police storefront is expected to open this spring in the former Matthews Market building, 1500 NE Jefferson.

Members of the People’s Coalition for Political Reform said at a news conference Sunday they want to reveal what they call “a waste of city funds” on the abandoned building.

Although not opposed to the storefront idea, group officials said there are many questionable factors involved with land acquisition, building administration and finances.

Group members said the city is paying too much for the run-down, deserted supermarket.

The city’s cost is expected to be $135,000, which is what remained on the buildings mortgage. City Manager Peter Korn said the city will make monthly payments on the building until the mortgage is paid off. He said he is unsure what the monthly payments will be.

First of America Bank holds the first mortgage on the building, which closed in December.

That deal also involves the trade of a city-owned house at 1120 NE Jefferson to the North Side Neighborhood Housing Service in exchange for the release of a $33,000 lien on the former market.

“The only thing they are doing is putting the city of Peoria more in debt. What we have here is a money pit,” said organization spokesman Rolf Sivertsen.

Korn said the city will also forgive a $65,000 loan balance owed to the city by the former owner of Matthews Market , Gary Matthews. The original loan to Matthews was $110,000, but $45,000 has been repaid.

The city became interested in the property because they already had money invested in it as a result of the loan, Korn said.

In addition to financial problems with the project, the People’s Coalition said the facility is too large for what the police need. The building is 8,000 square feet.

Korn said the police facility will occupy about 2,000 square feet and the remainder of the property will probably be used for community organizations.

But Sivertsen said he won’t believe the city will lease out the extra property until he actually sees the leases.

By September 10, 1993, the City was looking to resell the building, which was too big for the City’s needs from the beginning, and lease a portion of it instead:

Peoria’s third police storefront amounts to a pig in a poke, a city councilman said this week.

The city’s purchase of the former Matthews Market, 1500 NE Jefferson, was first announced in January. The deal took a new twist in recent months, however, as a business offered to buy the building and lease a portion to the city.

“The net result will be an economic situation that’s less costly than for us to be in the . . . storefront at Sheridan and Nebraska,” city development Director Tom Tincher said Wednesday.

The city currently operates police storefront stations at Sheridan and Nebraska and at 101 N. MacArthur Highway. Fourth District City Councilman Steve Kouri is not sold on the deal, which he figures will cost more than $250,000 before the storefront opens.

“It’s a bottomless pit, as far as I’m concerned,” Kouri said.

Tincher refused to divulge details of the pending resale of the building.

The City Council in January approved the first part of the deal: assuming the $135,000 mortgage held by store owner Gary Matthews and swallowing a $60,000 city loan. The store closed in December 1992. Tincher said the business approached the city about six months ago, intent on buying Matthews Market and occupying a portion of the structure.

Third District City Councilman David Koehler agreed the Matthews Market deal might not look good on paper, but said it represents a life preserver tossed to an inner-city neighborhood drowning in disinvestment.

Further repairs on the Matthews Market building will cost an estimated $63,975, according to city estimates. The City Council approved $27,315 of that amount Tuesday in the form of a roof repair contract awarded to Peoria Roofing, a contract awarded after competitive bidding.

Kouri said he supports the concept of community-based policing, but not the storefronts, which have been lambasted by critics as mere public relations ploys.

On December 22, 1993, the aforementioned deal was approved. In a story about the council’s decision to grant a sidewalk cafe license for, ironically, one of the buildings adjacent to Big Al’s that Matthews now plans to tear down, the Journal Star added that the council also took the following action:

Authorized the sale of the former Matthews Market building, 1500 NE Jefferson, to A&E Blueprint, which would lease a portion of the building back to the city for a police storefront.

A&E Blueprint currently is located at 3530 NE Adams, but will be bought out for the Illinois Department of Transportation’s McClugage Bridge and Adams Street improvement.

A&E will pay the city $135,000 for the building and lease back 2,600 square feet for the city storefront, at an annual rate of $2.50 per square foot, or $6,500.

I’m not sure when the police storefront idea fizzled, but at some point this leased space became the Peoria Township office. Recently, the township also moved out of the building, and the City no longer rents the space for anything to my knowledge.

The bottom line is this: The taxpayers of Peoria gave Gary Matthews a $98,000 gift 19 years ago by forgiving his $65,000 city loan and erasing the $33,000 housing service lien as part of the exchange for his run-down Matthews Market building. The sweetheart deal was alleged to have been political payback by then-council-member Dave Koehler because Matthews had been his campaign manager. The building was in such bad shape that the city resold it less than a year later and just leased a portion of it.

This is the same Gary Matthews to whom the taxpayers of Peoria are now giving a $37 million gift (including a $9 million developer’s fee) to build the Wonderful Development (aka, the downtown hotel project).

And now you know the rest of the story.

25 comments to Puff piece ignores controversy on Matthews Market disposition

  • anp

    Very interesting. I also wonder if the State of IL funds that are supposed to be part of this deal have anything to do with now Sen David Koehler?

  • Stormin' Norman

    Excellent job of reporting the true story. When PJS dropped Ray Becker’s name in that article, one can’t help but think to themselves…gee, whatever happened to Becker, John Dailey, and the rest of that gang. PJS reporter Paul Gordon stated on March 13th that day’s column was the last one he was going to write for PJS before leaving March 18th, so it appears Paul’s now playing in a five-minute overtime. Then again a final final farewell fluff piece might earn a gold star on a Matthews organization job resume…

  • Not surprised

    It’s sad to think that the same names are still front and center in Peoria politics and business. No wonder we’re broke and our property taxes are crushing the local real estate market. Welcome to Peoria, where ethics are optional.

  • conrad stinnett

    I noticed Paul dropped in something that the hotel project will start “soon.” We’ve been hearing that for quite some time. Gary Matthews saying the hotel project will start soon is akin to those “Free Beer. . Tomorrow” signs that one sometimes sees in bars.

  • Mazr

    PJStar has never seemed to be a paper interested in digging for a story resulting in ruffling feathers. Too bad. They have a lot to work with in our fair city.

  • Martin Palmer

    There is also some interesting things-hisory about the Northside Neighborhood Housing Services.

  • hotel?

    “Gee Honey, where should we stay for our conference in Peoria…..”

    “Hmmm, let’s check out what’s downtown, I hear they have a new Marriot and by golly we do have those reward points….”

    “Honey, I booked us at Embassy Suites in East Peoria, It appears to be a shank free hotel…..”

    Developer…”glad we got that city money, we’d be out of business otherwise”

    HP…”glad that councilman we own spent tax dollars on that project, now where should be spend that commission…drinks on us.”

    tax payer…”Marge, we got any plaster, there’s another gun shot hole in living room again.”

  • Angel

    very interesting, however, I think you are trying to make a name for yourself by not reporting all the facts. From what I heard, Matthews is not taking a developer fee any longer. So I ask what makes you different than him?

  • we sure could use another kouri on that council.

  • I have very little doubt that Matthews PAID FOR this article, and that makes it nothing more than a sponsored advertisement.

    There is nothing in this conception of this article that is newsworthy, even for The PJStar.

  • “Matthews is not taking a developer fee any longer. ”

    Ha ha ha ha!!!!!

  • Angel — The developer fee is part of the contract EM Properties has with the City of Peoria. This contract has not changed since the $9M developer fee was approved. If/when a change in the redevelopment agreement is submitted and approved eliminating the developer’s fee, I’ll be delighted to report on it.

  • idiotwatcher

    Excellent reporting, CJ.

    CJ’s piece is exactly the kind of reporting that Rick Baker used to do for the Peoria Journal Star. You know…back when it was actually a newspaper.

  • Paul Wilkinson

    where is the documentation re: Matthews? There have been dozens of forums in which a couple of candidates have been in the hot seat on this issue. I am certain any change in developer fee would have not only been reported at a forum, but also picked up by any media outlet with in a 30 mile radius…

  • C.J. — If he doesn’t win election to the Peoria City Council — should quit that job with the church and get a job as a full time columnist reporter.

  • Eye in the Sky

    I would actually pay for articles written with this much effort.

  • Eye in the Sky – I AGREE! This was a BRAVO piece of work by CJ!

  • Ok, the story is neat and informative. While it may appear there were laws or ethics or both broken, apparently no laws were broken here. Just another dumb deal made by Peoria politics which if you want, and can spend some time in front of a microfilm machine at the library, you can dig up on any of the neat deals this city has pulled. What a surprise! How about the Gorman brothers when the twin towers was being built? Hell they are so many.

    Ok, it’s a fact the CJ doesn’t love the hotel deal. Many don’t and normally I would agree, Mathews has been at the trough of tax dollars many times but then I am not running for a city council seat either. If you take Dennis’ advice CJ and quit your job and go for it as a journalist full time, you’ll starve to death. Eye, is there nothing here you don’t worship?

    Ok, I’m all giddy over this new gossip. Now what? Nothing has changed. This sounds like a campaign ruse to me. Guess I’ll go out and sprinkle gold glitter on my Summer’s yard sign and wait for sunrise. Wait, I don’t have one. BRAVO!

  • Hey Eye in the Sky

    If I could comment on your blog I would tell you there that this is the dumbest thing I have ever heard. Whose fault would it have been if the COP shot you?

    Guess who got CUFFED?
    April 3rd, 2011 · No Comments
    East Bluff
    I spent about 15 mintues this evening in handcuffs in my frontyard. Would you like to hear why?

    Police stop a group in front of my house for questioning in a assault that happened 2 blocks down the street. The ONE officer had SEVEN of them sitting in the grass at the end of my yard. One of them decides to run he comes straight at me I pull out my gun and proceed to tell he top get on the ground instead he bolts left and keeps running. At the same moment the officer took off after to catch him he ran in my line of fire. No fault on my part this whole time I am still standing on my porch. The next officer on scene only saw white male with a gun and they procceed to tone out for ME. Mean while the officer that went after the runner comes back no bad guy. He procceds to tell the rest of them what happened. They decided for there safety to put me in cuffs and explain that even though I was within my rights being on my property the arriving officers did not know I was actually helping them and I could have been shot. So after they searched me and pulled out all the toys I was carrying( 50,000 volt stun gun, 500,000 volt stun gun Mace/pepper spray and of course a baseball bat). They adviced me not to come out with the (BB) gun and start pointing. So I guess its lesson learned for me next time they will have to catch there own bad guys. Now the police call me BATMAN which I guess is not so bad since it could have been an ambulance ride for me instead of a lecture while in handcuffs. So I will not be the good samaritan any more. I would say to avoid being put in cuffs again I will just use the NYC defense it ain’t happening to me so I will not get involved and just stay in the house like the rest of the good people in the bluff do. So how was your Sunday night outside of the WAR ZONE we call the East Bluff?

  • Emtronics — Congratulations on your son’s wedding. Hope everything goes well this weekend.

  • Angel

    I myself just did some research on the dev. fee and it says up to 9% will be paid, not sure where it says this is a forgone conclusion. All I’m saying is you seem to want to investigate things from the past, maybe you should research everything.

  • Why thank you CJ. BTW, I don’t have any yard signs in my yard. I’m not sure how I am going to vote. Speaking of worship, you play a wonderful piano. Saw ya last Sunday.

  • Karrie E. Alms

    Angel: And in your thorough research, when has the city of Peoria recently, ever, sometimes or never paid less than the maximum amount for a developer’s fee? Just askin’ …. thank you for helping us to better understand your viewpoint.

  • Mazr

    C.J. has been bashing this deal since day 1 yet “Angel” decides to show up 2 days before the election challenging C.J. with some news that only she has heard.