Category Archives: Business

Sex club ban on Council agenda

On Tuesday, the City Council will consider a ban on live-sex-act businesses in the City of Peoria. If the ordinance is passed, it will make Club 307 — a sex club located at 801 SW Adams 307 Oak St. — illegal and subject to being shut down. From the council communication:

Concerns have been raised on the Council Floor by citizens complaining about the existence of a so-called swinger’s club in the City of Peoria. The attached Ordinance, based on an ordinance from Phoenix, Arizona which has been upheld by the Court there, makes it illegal to operate a business which charges admission to view and/or participate in live sex acts…. [A]ctivity unprotected by the First Amendment, which Council can find to be harmful to the health and wellbeing of Peoria, including but not limited to contributing to the spread of diseases, takes place in these establishments.

Club 307 is right next to Brown Bag Video, an adult bookstore. The council recently rejected a request from the owner to convert the bookstore into a 4 a.m. bar. The council declined to grant the 4 a.m. liquor license, although they approved a 4 a.m. liquor license four blocks north of this location to accommodate Big Al’s strip club. Many citizens expressed concern about Club 307 when the council was considering the adult bookstore’s liquor license request, and that’s what prompted this proposed action by the council.

In 2005, 62 percent of voters in a non-binding referendum said the city should “impose a ban on full nudity in new and existing adult cabaret clubs and strip clubs,” but no action was ever taken by the Council, even though the proposed ban was based on existing Indiana law that the courts upheld. City Attorney Randy Ray at that time expressed concern over any action that would impact an existing business, saying the first thing he would do if the Council acted on it was hire an outside lawyer to handle objections to the ban on constitutional grounds. The Journal Star opined, “When governments impose new rules that threaten businesses, they enter a legally dangerous area called an ‘illegal taking.'” Yet the council communication for shutting down Club 307 states there is “no direct financial impact,” and there is no indication that an outside lawyer would need to be hired. So, perhaps now the time is right to revisit the public nudity ban that was supported by the majority of Peoria citizens.

Hotel news recap

There were a couple of hotel-related news items over the weekend:

  • Gov. Quinn approved tax credits for the Wonderful Development. Incidentally, the Journal Star reported the bill number as SB2535, but it’s actually SB2534. The gist of Quinn’s comments was that these tax credits will help provide jobs for union workers, and that will spur economic growth that will actually generate more revenue for the state. “You put more people to work,” Quinn is quoted as saying. “They pay income taxes and other taxes. The key thing is more economic growth.” Koehler chimed in: “People say, ‘Doesn’t that drain money out of the state budget?’ No, it doesn’t. By the time you pay all those jobs and you are creating extra real estate value, the community and state are going to replenish all of that.”

    Are we supposed to believe these guys have suddenly converted to Reaganomics? Wasn’t it Gov. Quinn who proposed raising personal income taxes from 3 to 4.5% last year? And after he changed his proposed new rate to 4%, wasn’t it Dave Koehler who lamented, “From everything I’ve heard around the Capitol, there will not be any appetite for the income tax (increase) before the election. That’s too bad. I don’t agree with it, but it’s the decision I hear.” What? Why raise personal income taxes? Why not just cut corporate income taxes so the state can reap millions and millions of dollars from all the new jobs that would be created as a result? Or does supply-side economics only work on union-worker-built hotel projects at Main and Madison in Peoria?

    The paper also stated:

    The proposal potentially could reduce the project’s costs by $8 million, savings that are split between developer EM Properties and the city of Peoria. The City Council last month voted 7-4 in favor of a $37 million bond to assist in the hotel project. The tax credit could potentially drop that obligation to $33 million.

    Looking at it one way, this is good — the City’s obligation could be 12% or so less than originally planned. On the other hand, it’s actually a net increase of $4 million in taxpayer incentives, if one looks at tax incentives from all sources equally.

  • The Grand Hotel will be converted to a senior living center. Why? The hotel’s sales manager, Stan Marshall, explained: “[T]hose capacity needs [groups who come to Peoria for meetings or sports events] just aren’t frequent enough. There are a lot of holes in the calendar. We need a steady source of revenue.” Given that the Radisson (formerly Jumer’s Castle Lodge) closed last year, and now the City’s third-largest hotel is getting out of the hotel business, one would be tempted to think that there’s overcapacity of hotel rooms in Peoria. But I’m sure downtown hotel proponents will pooh-pooh such an obvious conclusion. After all, the whole rationale behind the Wonderful Development is this belief that Peoria’s hotel problem is undercapacity.

Kinseth pulling out of Peoria

The Journal Star reports that Kinseth Hospitality, owner of the Holiday Inn City Centre downtown, is bidding farewell to Peoria. The hotel will be managed by Pyramid Hotel Group of Boston. It’s unclear at this time who will actually own the property.

Kinseth was critical of the city of Peoria, which provided EM Properties Ltd. with a $37 million bond to reconstruct the Hotel Pere Marquette into a Marriott Hotel structure.

About a year ago, he wanted the City Council to support a $10 million City Centre renovation project with $8 million in assistance. That, however, did not go anywhere.

“Obviously, the city is not willing to support this hotel at this time,” Kinseth said. “In 10 years, we haven’t made a dime and spent tons of our money and worked very hard. We’ve never made any money on the hotel and worked very hard and care deeply about the hotel and staff. At this time, we can’t do it anymore. It’s time to move on.”

The assistance Kinseth sought from the City would have upgraded their property from a Holiday Inn to a Crowne Plaza Hotel. The plan was remarkably similar to the Wonderful Development, though far less costly. Yet the City wouldn’t even entertain Kinseth’s proposal, despite the supposedly dire need for more quality rooms downtown to support the Civic Center. Instead, the City is using the Holiday Inn’s property taxes and sales taxes to fund their competition to the tune of $37 million. It’s hard to blame Kinseth for giving up on Peoria under those circumstances.

Waldenbooks in Peoria to close this month

Waldenbooks in Peoria's Northwoods MallWaldenbooks in Northwoods Mall is closing for good this month.

Waldenbooks’ parent company Borders Group, Inc., released a statement in November 2009 that it would be closing 200 Waldenbooks stores this month in order to improve the chain’s profitability. Borders Group, headquartered in Ann Arbor, Michigan, lost $39 million the third quarter of 2009. Border Group CEO Ron Marshall explained, “Through this right-sizing, we will reduce the number of stores with operating losses, reduce our overall rent expense and lease-adjusted leverage and generate cash flow through sales and working capital reductions.”

Also closing this month are Waldenbooks stores in Aurora, Calumet City, Danville, Gurnee, Joliet, Lincolnwood, Marion, and Sterling. The Waldenbooks in Galesburg closed a year ago this month. The Borders superstore in the Shoppes at Grand Prairie is unaffected.

The history of Waldenbooks in a nutshell: In 1933, Lawrence W. Holt and Melvin T. Kafka founded a company “they believed would help people cope with the effects of the Depression. Specifically, Holt and Kafka’s new company lent popular books for three cents a day, saving people the cost of purchasing.” This sounds similar to the way we rent movies and video games today. Once cheap paperback books started being published in the 1950s, Kafka retired and Hoyt took over the company. In 1962, the company started opening retail stores — selling books instead of renting them. It was named after the book Walden by Henry David Thoreau. The company was acquired by a retail conglomerate called Carter Hawley Hale in 1969. It was acquired by many other companies over the years, including K-Mart, which also acquired Borders. In 1995, Borders and Waldenbooks initiated a public offering, eventually buying out K-Mart’s ownership interest.

I’m not sure when Waldenbooks opened in Northwoods Mall, but it wouldn’t surprise me if it were an original tenant. It’s been there as long as I can remember. Its departure will leave Northwoods without any bookstore. The mall’s other bookstore, B. Dalton Booksellers, closed several years ago after its parent company, Barnes & Noble, built a superstore in the Glen Hollow shopping center.