Daily Archives: February 5, 2007

City of Peoria, Museum Block

Museum project too big, too expensive

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Now that they’ve lost their federal earmark funding, the already-heavily-underfunded Peoria Riverfront Museum is looking for something — anything — to prop up their big plans for the old Sears block. The latest funding scheme: The New Markets Tax Credit (NMTC) program.

As I understand it, the way NMTC works is that investors would donate money to a for-profit corporate entity (usually a limited liability company) called a Community Development Entity (CDE) which, in turn, makes debt and equity investments in low-income areas — presumably the proposed museum in this case. The benefit to the investors is that they get a 39% Federal income tax break distributed over seven years, plus a possible cash return during the life of the CDE if it’s profitable.

The first question I had was how the Sears block could possibly be considered a “low-income area.” It’s the crown-jewel of downtown Peoria, right next to Caterpillar’s world headquarters. It’s a prime piece of real estate. Well, it turns out that the way the federal government figures whether or not it is a low-income area is by census tract. Museum Square is in census tract 12, as shown here:

Census Tract 12

As you can see, this census tract not only includes downtown, but also an equal area northeast of I-74. Thus, statistically, the census tract poverty rate is 50.2%, and therefore qualifies as a low-income area. Don’t you just love statistics?

Whether this funding will be the panacea for the museum group’s fundraising woes remains to be seen. It looks like this project would qualify based on the standards set forth by the NMTC statute. However, there is still an application process through the Treasury Department, and the Museum Collaboration won’t find out if their application is approved until late summer, which means, according to the Journal Star’s report:

Officials hope to finish the New Markets financing plan by late summer and start construction of the underground parking deck by September 2008. Construction would begin on the visitors center and museum by January 2009. Exhibit installation would begin in March 2010 with a grand opening scheduled for November 2010, about a year behind original projections.

But there’s another option: redesign. Most of the $24 million they’ve already raised can be used to build a state-of-the-art Peoria History Museum on a smaller footprint, and the rest of the block could be sold for commercial development once the new Land Development Code is adopted. That would put the project more in line with the Heart of Peoria Plan, the available funding, and a reasonably-manageable project scope. It could open a whole lot earlier, with construction of commercial ventures starting even sooner, meaning more property tax revenue for the city.

Peoria Civic Center

People in glass arcades shouldn’t throw stones

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David Stuckel, attorney for the Civic Center Authority, had his letter to the editor printed in the Journal Star today. He asks:

Why should Peoria taxpayers be ticked by the efforts of the Peoria Civic Center Authority to bring a new hotel to Downtown, as suggested in the Jan. 29 editorial? Because it will improve Downtown’s appearance? Create jobs and tax revenues? Attract people who spend money in the community?

No, Mr. Stuckel, it’s because the Civic Center Authority (CCA) lied to the city when they started this expansion. They told the city — in writing — “We believe [an expanded Civic Center] can be successful without an attached hotel,” and that they weren’t asking for any public funding for a hotel.

Now, less than a year later — before the mortar between the bricks is even dry — the CCA is coming back to the city with its hand out, begging for TIF status and claiming the Civic Center can’t even be solvent without a new hotel. Stuckel then has the chutzpah to ask, “Will our traditional lack of governmental foresight consign this to the woulda-coulda-shoulda trash bin?” The only lack of foresight in this equation is the CCA’s. All the city did was take them at their word.

No, Mr. Stuckel, we’re not ticked for any of the spurious reasons you gave. Peoria taxpayers are ticked because they don’t much care for extortion. They don’t much care for arrogant criticism of other hotels by an entity that has never been self-sufficient and continues to rely on heavy tax subsidies. They don’t much care for an organization that has taken their temporary HRA tax funding and treated it as a permanent entitlement.