Monthly Archives: December 2009

Bradley University, City of Peoria

Campustown Save-a-Lot to be leased to Bradley?

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Here’s what we know for sure: Campustown developer David Joseph already has another tenant lined up to replace Save-a-Lot, and it’s not a grocery store. Other than that, no one will comment for the record. So the question on everyone’s mind is, “who will the new tenant be?”

Over on Billy’s blog, one commenter suggests it will be an Ashley Furniture store. But in WEEK-TV’s news coverage, the manager of the Save-a-Lot tells a different story:

The Save-A-Lot store manager says the building won’t be empty for long, and he is hearing that it could be replaced with a Bradley bookstore.

I have heard Bradley rumored as a possible tenant from several sources — although they don’t all agree on what exactly Bradley will do with it. Possible uses run the gamut from a bookstore, as WEEK suggests, to offices, to an education center. I wrote to Bradley’s public relations rep — former Journal Star editor Shelley Epstein — but my inquiries have not been answered. Read into that what you will he’s out of town and unable to answer me until he gets back Sunday or Monday.

If the rumors are true and Bradley is going to be Campustown’s largest tenant, is that good or bad for the West Bluff? Let’s weigh the pros and cons.

Pros

  • Bradley would be a stabilizing presence in Campustown. Presumably, security would be increased, which will make the area safer.
  • Since Bradley isn’t buying the space, but rather leasing it, the city will continue to collect property tax revenue. And since the Campustown TIF ended this year, the property taxes will go back to the local governments again, and the city’s portion will go into the general fund.
  • More students and/or employees of Bradley going to school and/or working at Campustown may increase business for the remaining retail stores and restaurants.

Cons

  • The city will lose sales tax revenue. If the store is converted to an office or education center, no sales tax revenue at all will be collected. If it’s converted to a new Bradley bookstore, the old bookstore would likely close, so there would be a net loss in commercial square footage, which translates to a net loss in sales tax revenue.
  • A quality commercial anchor would better serve the West Bluff. As Campustown was originally conceived, a grocery store was supposed to provide basic infrastructure to the West Bluff that would be convenient for residents and an attractive amenity for people considering a move into the neighborhood. Thompson’s/Sullivan’s were excellent tenants toward furthering that vision, but Save-a-Lot (being a low-end grocer) sent a different message. While acknowledging that Save-a-Lot was a poor choice for a commercial anchor, the way to improve Campustown would be to bring in a better grocer, not convert retail space to institutional.

From the city’s standpoint, there’s no question that the cons outweigh the pros. They’re going to lose money. Sales tax is the city’s bread and butter. In an effort to keep property taxes low, the city has been piling up sales taxes and fees to cover the rising costs of public works, public safety, and developer incentives.

It’s not as if the city couldn’t absorb the loss of Save-a-Lot’s tax revenue by itself. But this isn’t an isolated incident. There seems to be somewhat of a trend in retail outlets and residential properties being taken over by non-tax-producing entities. For example, the old K’s Merchandise was taken over by OSF. The old Damon’s restaurant in Riverfront Village was taken over by Heartland Partnership. The old Leath Furniture was converted to a church. And huge swaths of land and houses that used to be on the property tax rolls have been taken over by District 150 for various building projects — or, in the case of the Prospect road properties, expensive blunders. In the case of District 150, taxpayers get hit with a double-whammy: we have to pay millions to acquire the properties, plus we lose the revenue they produced. The city can’t sustain such a trend without compensating growth.

From a neighborhood standpoint, the problem with Campustown has always been crime. The place has a reputation for being unsafe, and until that changes, you’ll have a hard time getting tenants to locate there and you’ll have a hard time getting patrons for those tenants. If Bradley’s presence were to reduce crime in Campustown, I think most residents would see it as a net gain for the West Bluff. Conversely, if Save-a-Lot is gone (and, despite its faults, the store was serving the needs of some lower-income West Bluff residents) and there is no increase in safety in return, that will certainly be a net loss for the area.

West Bluff

Save-a-Lot in Campustown is closing

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According to the Journal Star, Save-a-Lot in Campustown on the West Bluff will close its doors January 3. Another tenant is lined up, but the developer won’t disclose who it is — except to say that it won’t be another grocery store. There are some other interesting comments:

“We’re looking for additional sites, and we’re open to other sites in the Peoria area,” [Gerry Kettler, director of consumer affairs for Niemann Foods] said.

I wonder if MidTown Plaza is one of the sites they’re considering. There was a lot of speculation back when Cub Foods closed that it would be replaced with a lower-end grocery store such as Save-a-Lot, since both chains are owned by Niemann Foods.

“From that standpoint we are disappointed Niemann Foods chose not to renew the lease. We’ve had a grocery in that space for almost all of the time Campustown has been there, almost 20 years. Apparently, there isn’t a strong enough need for one now,” [Brad Joseph of D. Joseph & Sons, the Peoria firm that developed and owns Campustown] said.

I couldn’t respond to this any better than frequent commenter Mahkno did in the Journal Star’s comments section:

Considering there has not been a decent well run grocery store there for the last 10 years, it is a bit of leap to conclude there is no need for one. Bradley students do not shop anymore. West Bluff residents of all stripes don’t shop there any more. Mr Joseph has pretty much destroyed the customer base that would support Campustown. The local residents have been sufficiently trained to shop elsewhere. He must not think highly of West Bluff residents by his continued efforts to put low end retailers there.

I’ve been to Save-a-Lot and found it disgusting. It was dirty and unkempt. It had very little inventory given the size of the store. And it had very little variety. I went in there once just to get some soda. They offered one brand: Pepsi. That’s it. The gas station across the parking lot had more variety than that.

I shudder to think what will take its place. We can only hope it won’t be a 20,000-square-foot cash store.

Bradley University

Les sees 60% raise over two years

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I heard about this Bradley Scout article from Mazr via Billy’s blog. The article is mainly about how Joanne Glasser is one of the highest-paid college presidents in Illinois, but both Mazr and Billy picked up on Bradley Basketball coach Jim Les’s jaw-dropping salary of $419,414 (including benefits) for the 2007-08 school year. That’s just $1,586 shy of the college president’s salary.

What really floored me, though, was this: “Two years earlier, Les earned $262,905.” That means Les’s salary increased $156,509, or nearly 60%, in just two years. This raise coincides with Bradley’s NCAA appearance in 2006, when they made it to the Sweet Sixteen for the first time since 1955. I presume the NCAA berth and his salary bump are connected.

It sounds like a lot of money to me, and I find it strange that the basketball coach would be on equal salary terms with the college president. It gives the impression that athletics and academics are of equal value. However, Les’s salary was actually quite low compared to other NCAA Division I coaches, according to this USA Today report from 2006. Before his salary bump, Les was one of the 20 lowest-paid coaches. At that time, 17 coaches made over $1 million, and 33 made over a half million.

I can’t find a recent salary comparison, but I would assume Les is making a respectable average salary among coaches in his division now. Is he worth it? I’ll let those who follow basketball more than I answer that question.

General News

Top stories of 2009

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I’m not doing a Top 10. Rather, I’m just going through each month and pulling out the two or three most significant events that happened, as reported on the Chronicle. No doubt there are bigger stories missing here and there because I didn’t write about everything, but you can read about those in the mainstream media or other blog sites.

Here are the 2009 Top Stories on Peoria Chronicle, as I see them:

January

February

March

  • WHOI News bites the dust as an independent news source. WEEK-TV (Granite Broadcasting) takes over operations under a shared service agreement, fires all WHOI reporters. The newscast and anchors remain, but content is identical to WEEK.
  • Barbara Van Auken is sued by Sigma Nu fraternity in a transparent (and ultimately unsuccessful) attempt to spike Van Auken’s reelection bid.

April

May

June

July

August

September

October

November

December

And that’s your 2009 Year in Review.

Uncategorized

Merry Christmas!

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Merry Christmas to all!

 

And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid.

And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people. For unto you is born this day in the city of David a Saviour, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.

And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, Glory to God in the highest, and on earth peace, good will toward men.

And it came to pass, as the angels were gone away from them into heaven, the shepherds said one to another, Let us now go even unto Bethlehem, and see this thing which is come to pass, which the Lord hath made known unto us. And they came with haste, and found Mary, and Joseph, and the babe lying in a manger. And when they had seen it, they made known abroad the saying which was told them concerning this child. And all they that heard it wondered at those things which were told them by the shepherds. But Mary kept all these things, and pondered them in her heart.

And the shepherds returned, glorifying and praising God for all the things that they had heard and seen, as it was told unto them.

(Luke 2:8-20)

Museum Block, Peoria County

Museum board agreement reached

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The Journal Star is reporting that an agreement has been made between Peoria County and the Museum Collaboration Group on who will run will the proposed Peoria Riverfront Museum.

The agreement reached Monday – after the two sides appeared stalemated on Friday – calls for a governing board of between 17 and 22 people, according to [County Administrator Patrick] Urich. A minority of the members – eight, nine or 10, depending on the final size of the board – would be representatives of one of the five agencies that constitute the museum collaborative group. […] A majority of the board would be residents of the county unaffiliated with any group in the museum collaborative group. There would be no representative from county government.

Also:

Urich said the exact relationship between the museum board of directors and the county will be spelled out in the by-laws. The county would own the building, but the board would operate the museum.

And:

“We would be looking for the best and the brightest from the community for a seat on the board,” Urich said.

Here’s how this will work in practice: A bunch of people who are politically connected (the main requirement for being considered “best and brightest” in Peoria), but know nothing about how to operate a museum, will be appointed to the museum board. They will all look to the Lakeview appointees as the “experts” on museums, and vote in accordance with their recommendations. Eventually, they’ll get busy with other things and stop coming to a majority of the meetings — just enough will show up to maintain a quorum. At that point, the majority of those who actually attend will be Museum Collaboration Group members. Their meetings will not be open to the public. Poor decisions will continue to be made, leading to chronic underfunding problems, requiring tax revenue for operations. The project will be determined to be “too big to fail,” given its huge initial cost and prominent placement on the riverfront, so tax money will be diverted to keeping it afloat in perpetuity. It will draw the same number of annual visitors as the current Lakeview Museum by year three, at which point plans will be drawn up to expand the museum (at taxpayer expense, of course) so it can draw more visitors. Peoria County voters will approve more funding.

City Council, City of Peoria, East Bluff

Council looks to state for help, but won’t help themselves

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The city council can be so schizophrenic sometimes.

At Tuesday’s meeting, they first decided to keep taxing residents of the East Bluff Special Service District 18 cents per $100 equalized assessed value for another ten years to continue funding the East Bluff Neighborhood Housing Service, a controversial organization residents feel is ineffective and secretive. The vote was 9-1.

Then, just a couple of agenda items later, fourth district councilman Bill Spears made a motion “to begin discussions [with state legislators] on innovative ways to bring back the core of the inner city by giving incentives, such as tax breaks to homeowners and owned businesses.” After some discussion, that passed 9-1 also.

So they’re for talking about tax breaks with state reps, but not actually giving tax breaks to a distressed part of town when given the opportunity. Tell me that isn’t dysfunctional.

City of Peoria

Advice for Peoria from Thomas Jefferson

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And now, here is some advice from our third U. S. President that we would be wise to follow here in Peoria — and, for that matter, all other levels of government:

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.

Delay is preferable to error.

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.

Never spend your money before you have earned it.

City of Peoria

“Right now is an absolutely horrible time to be in the hotel business”

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So says Ben Thypin, senior market analyst for market research firm Real Capital Analytics, in a November 30, 2009, article for Moneynews.com. Why? Occupancy rates are falling on the order of 10%, and more and more hotels are going into default.

Hotel loans have begun falling into delinquency faster than any other kind of commercial real estate debt.

The rising defaults paint a grim picture for an industry with increasingly more rooms than guests, and more hotels still opening every day. It’s a problem that could get worse before it gets better, with demand expected to remain weak and ambitious new projects planned before the meltdown worsening the room glut.

The oversupply means room rates should stay low for at least another year, good news for consumers but not so great for hotel owners and the banks that lent them the cash to build or buy.

In a related story (forwarded to me by one of my alert readers), Governing magazine takes a look at cities building convention hotels and asks the question, “Should cities be in the mega-hotel business?”

[Heywood] Sanders, a professor of public administration at the University of Texas at San Antonio, is the nation’s leading critic of publicly funded convention centers and hotels. He argues that conventions in general, not to mention the facilities that host them, are a declining business. He says that more and more meetings take place online rather than in gigantic buildings, that the recession has only accelerated this process, and that recovery is not going to bring back the old days of massive trade and professional shows with participants flying in from all over the country. The crisis is causing some people to visit Sereno today instead of staying locally.

Sanders cringes as he sees cities betting on convention centers that cost hundreds of millions of dollars, then doubling down on that bet with hotels that cost hundreds of millions more. His research suggests to him that the link between new headquarters hotels and increased convention business rarely emerges. “You get to do a big project with big promises and lots of money for consultants and bond counsel and underwriters and engineers,” he says, “but you may do it at the expense of the very important things that may make a city’s future.” Sanders would prefer that cities invest in schools, roads and affordable housing.

Meanwhile, back in Peoria where we ignore data such as this, the City is still breathlessly waiting to pour $39.3 million into a new downtown Marriott hotel. Jim McConoughey, president of the Heartland Partnership, recently was interviewed by the Journal Star. It included this bewildering exchange:

Q: There has been some criticism of late with regards to the city of Peoria’s involvement with assisting the hotel project with a $39.3 million revenue bond. Given the current economy and considering the struggles with other TIF projects like MidTown Plaza, how do you respond to someone who says that now is not the time to do the hotel and that the hotel project is a different TIF project than MidTown Plaza?

A: I may never be able to convince that person. They are trying to save their way out of an economy. This is about investing. When you look at a hotel project compared to other things, you can look at it in a couple of different ways – one is that they have been collecting taxes on that site for a hundred years. They have needed positives for a very long time. It’s only been in recent years the condition of (the Pere Marquette) hasn’t paid its own way. To have some degree of investment in it is a positive event for that particular project. For the short term, if you did nothing, it would feel like you are taking a less risky position. But the riskiest position is to not do anything.

First of all, the question is incorrect. It’s not a $39.3 million revenue bond, but rather a general obligation bond. That means if the hotel flops, the taxpayers are still on the hook to repay the bond debt.

Secondly, McConoughey is right about one thing: he’ll “never be able to convince that person.” The rest of his answer is basically the Peoria motto, “it’s better than nothing!” McConoughey treats “investment” here as though it is a purely positive thing. In reality, there are good and bad investments, and this downtown hotel scheme is a bad one (for reasons stated above and previously). A great investment today would be in the cannabis industry, with plenty of notable companies investing in it and getting huge returns. You can check out this article “https://www.newcannabisventures.com/sol-global-reports-c244-million-investment-gains-in-q1/” to learn how companies are investing in the cannabis industry.