Category Archives: Economic Development

City of Peoria, Economic Development

One Technology Plaza up for auction

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If you’re looking for a bargain on an office building downtown, don’t miss the auction for One Technology Plaza October 16-18. Starting bid is $1.5 million. The marketing description indicates the office building is 148,055 square feet (contiguous space up to 22,441 square feet) and only 31.7% occupied.

The building sits at the corner of Fulton and Adams streets, where the downtown Bergner’s store once stood. The old Bergner’s building was razed in the fall of 1997 to make way for the new “Riverfront Technology Center” (as it was called before a naming contest came up with “One Technology Plaza”). Developed by Diane Cullinan, the project was slated to cost $32.2 million, $12.4 million of which consisted of public investment from ICC ($3.2 million) and the City of Peoria ($9.2 million for the parking deck). It also got $1.2 million from Caterpillar and a state grant for $500,000.

At the time it was proposed, the City had high hopes for the tech center. It was going to provide high-tech training and provide high-tech infrastructure for tenants. It was going to revitalize downtown, make us part of the “silicon prairie,” lure new technology businesses to the city, help create a home-grown high-tech workforce, and beautify a blighted corner in the center of town.

The training portion of that dream, a company called RiverTech Community Technology Center, folded just a year after it opened due to lack of business, leaving 6,000 square feet of empty space. And just like that, One Technology Plaza became just another office building downtown, and everyone moved on to the next big project that was going to revitalize downtown.

City Council, City of Peoria, Economic Development, TIF

Saving downtown one new hotel at a time

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I stopped blogging for several years shortly after the big Wonderful Development opened downtown. You may recall that they remodeled the Pere Marquette, opened the new Courtyard Marriott, and had plans to put in restaurants and bars and retail, and oh, goodness, that block was going to be hopping! And the best part was, it wasn’t going to cost taxpayers a thing because, “It pays for itself,” an exuberant Mayor Ardis said at the time.

As it turns out, not one restaurant, bar, or retail shop has ever opened in the storefronts along Monroe. In fact, the interior was never even finished; it still looks like a construction site inside. Taxpayers lost the $7 million loan and is saddled with ongoing lawsuits with developer Gary Matthews. And since the pandemic, the Courtyard has been closed, ostensibly due to low demand.

But no worries. It turns out that what downtown really needs to start bustling like it’s 1939 again is — wait for it — another hotel! Yes. The Peoria City Council has just approved another redevelopment agreement with another hotel developer that’s promising 70% occupancy, a national flag (this time it will be a Hilton Garden Inn), a restaurant/bar, and a convenience store. And it won’t cost taxpayers anything. It’s risk-free!

The new hotel is planned for Adams street, across the street from the new OSF Health Care corporate headquarters, in place of the former Sully’s bar and the former downtown Illinois Central College campus (also known as the Perley building). Plans call for the two properties to be razed to make way for the new development. Incidentally, artists’ renderings show Fulton Plaza replaced with two-way vehicular traffic again, but there’s nothing in the redevelopment agreement about it.

Oh, and it’s absolutely, positively, nothing at all like that Wonderful Development from a decade or so ago. Everybody says so: the developer, the developer’s attorney, various other people with a vested interest in the project, and the City Manager.

They have a point. There are many differences. This project includes apartments on the upper floors in addition to hotel rooms on the lower floors. That’s a new twist. The City isn’t loaning $7 million from underfunded pension funds this time. That’s a plus. They’re also not handing $33 million to the developer up front (backed by municipal bonds that we’re still on the hook to pay off), although they swore that was an awesome idea the last time. But hey, we all make multi-million-dollar mistakes with other people’s money now and then. Can’t remain bitter about that forever, am I right?

But on the other hand, there are a lot of similarities. It’s highly debatable that we need more hotel rooms downtown. As mentioned, one entire hotel downtown is still closed–try to book a room in the Courtyard. The occupancy predictions presented at the council meeting tonight (brought to you by Hotel & Leisure Advisors, a consultant for the hotel industry who reportedly did the feasibility study for this project) are unrealistically high, just like they were for the Wonderful Development. They’re also promising a new restaurant and retail, just like they did with the last hotel project, but which never materialized.

And there’s one more similarity worth mentioning: This does come with a cost to taxpayers. This hotel will be in the Downtown Conservation TIF (tax increment financing district), and the City has promised to pay the developer up to 100% of the redevelopment costs out of the increase in taxes attributable to the project site. That’s money that otherwise would go to other taxing districts, such as the County, District 150, the Park District, ICC, etc. That means taxpayers like you and me will have to take up the slack.

This also means the new hotel will be competing with the Pere Marquette and (still shuttered) Courtyard Marriott. The $33 million in bonds to build those hotels is supposed to get paid back out of revenues from those hotels. If revenue goes down due to increased competition for an (I would argue) over-supply of hotel rooms, then the bond repayment has to be made up from taxpayers like you and me. You can’t stop a private developer from building another hotel (that’s capitalism), but you don’t have to give them a sweetheart TIF deal that will likely harm your other investments, either.

True to form, however, the deal was sealed before the Council ever met, and it passed unanimously tonight. That’s okay. We’re finally going to get downtown moving again, just like we were promised with the Pere Marquette renovation. And the Civic Center expansion. And the museum. And the new Cat headquarters. And One Technology Plaza. And Riverfront Village. And….

City of Peoria, Economic Development, State of Illinois

Enterprise Zones extended, redefined

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The State of Illinois recently extended the Enterprise Zone program (Public Act 097-0905). Peoria’s enterprise zone was due to expire next year (2013), but has now been extended until 2016, at which time the city can apply to have it extended for another 25 years.

In addition, the criteria for awarding Enterprise Zone status has been redefined. Gone is the “requirement” that the zone be in a “depressed area,” defined as “an area in which pervasive
poverty, unemployment and economic distress exist.” That criterion was never followed in the first place, especially in Peoria, as can be seen from the following map showing the location of Peoria’s enterprise zone (in red):

Peoria’s Enterprise Zone

Note the large greenfield areas in far north Peoria that are included. Not exactly a depressed area.

Instead of making cities conform to the law, the State of Illinois has opted to make the law conform to what cities are already doing. I guess that’s one way to resolve the problem. The old requirement is being replaced with ten criteria, three of which have to be met in order to qualify for Enterprise Zone status. The criteria are broad enough that any city in Illinois should easily be able to qualify.

Nevertheless, there are a limited number of Enterprise Zones allowed in Illinois, so a new Enterprise Zone Board is being created. They will assign points to each application based on how closely each criterion is met. The highest scores win.

The bottom line is that Peoria’s enterprise zone, most of which was not in compliance with the law, has now been legitimized. So shopping areas that are full of commercial businesses and don’t need any additional incentives (like Glen Hollow) will continue to reap the benefits of this economic development tool while whole areas of the City with abandoned commercial centers (like the South Side) will not receive any incentives for revitalization. Greenfield sites on Route 91 will continue to get sales tax breaks for new development, putting existing development in the older parts of town at a further disadvantage.

Economic Development, Radio

This American Life on economic development

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There’s a Public Radio show called This American Life, hosted by Ira Glass, that I enjoy. They have a theme for each one-hour episode, and the episode is split into several segments, or “acts” as they call them, with each act looking at the same theme in different ways. Back in May, they had an episode with the theme of “How to Create a Job,” and I found Act 3 especially interesting. There’s not a way to embed the audio here, but if you follow this link, it will take you directly to Act 3 of that program. The segment lasts about 15 minutes. Take a listen. It will help you understand the rhetoric that comes from our own economic development gurus in Peoria.

This American Life: How to Create a Job (full program)
Direct Link to Act 3: Job Fairies

City Council, City of Peoria, Economic Development

Council to address pervasive poverty on Brandywine Drive

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I’ve talked about the misuse of Enterprise Zone status on several occasions here at the Chronicle (e.g., “A New Kind of Poverty,” “Discussing Incentives with Craig Hullinger“), so there’s no need to go into another lengthy explanation. Here’s a quick summary: the Enterprise Zone is supposed to be used in “depressed areas,” defined as areas “in which pervasive poverty, unemployment and economic distress exist” (20 ILCS 655/3(c)). But the City of Peoria completely disregards this qualification and uses the status indiscriminately throughout the city. See for yourself:

By taking this tool and using it in growth areas, greenfield sites, and other non-depressed areas, the City has not only eviscerated its effectiveness, it’s put depressed areas at an even further disadvantage.

It looks like that trend will continue at tonight’s City Council meeting, as the Council will probably approve extending Enterprise Zone status to the horribly depressed area of — yes, you guessed it — Brandywine Drive. Yes, when one thinks of pervasive poverty and economic distress in the City of Peoria, the first place that pops into my mind is “across the street from Northwoods Mall.”

I don’t want to minimize the challenges faced by all parts of town, but having just come off a huge recession, it’s not surprising to find vacancies throughout the city. We certainly want to do what we can to encourage reinvestment, but misusing incentive tools is poor public policy. It’s dishonest — the wording of the statute is unambiguous that this should only be used in areas of pervasive poverty. It’s unfair — it puts poverty-stricken areas at an even greater disadvantage.

The Journal Star ran an article on this agenda item, and the council members they interviewed (the usual suspects) were all in favor. They have regularly defended the misuse of EZ status by saying “everybody does it,” so those responses were expected. I was disappointed to see new council member Beth Akeson’s response, however:

“I kind of question the use of the enterprise zone in the city, but the city has already set a precedent,” at-large City Councilwoman Beth Akeson said. “Once you set precedent, and once you extend an enterprise zone to (particular) properties, you are hard pressed to do other things than continue on.”

What is she saying? That past misuse of economic development tools has somehow become binding precedent, obligating the council to future misuse? That someone could sue the City for not giving one property the same economic development incentives as another property? If that were true, then every hotel in Peoria should be suing the City for their own pot of gold based on the Wonderful Development incentive package.

The city is under no obligation to extend the enterprise zone to a single additional property. We need not continue every bad precedent set by past councils. We are not constrained to keep repeating past mistakes.

But we will. That’s what we do in Peoria.

City of Peoria, Economic Development

Discussing incentives with Craig Hullinger

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Craig Hullinger has written a blog post about the necessity of providing incentives to rebuild a city’s downtown/older neighborhoods. Hullinger used to be the Economic Development Director for the City of Peoria until he retired in 2009. Since that time, the City has not hired a replacement; instead, Economic Development personnel report directly to the City Manager du jour. Hullinger is a very nice guy and has said some kind things about my blog; nevertheless, we have some disagreements on economic development theory.

“If an older city does not lead the redevelopment of its older central city, it will continue to decline,” Hullinger says. “[A] decision not to incent redevelopment is a decision to give up on your older areas…. [I]ncentives are required to rebuild downtown. Developers go where they are certain they can develop and get a great return. Redevelopment is much more costly and high risk then greenfield development. We have to equalize these costs through incentives if we want private sector renewal.”

What’s missing from this argument? It doesn’t specify what he means by “incentives.” An incentive is “any factor (financial or non-financial) that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives.” If this is what we mean by “incentives,” then Hullinger and I do not disagree. I believe cities do need to invest in their older neighborhoods and to incentivize redevelopment where necessary.

The point of disagreement is over the kind of investments and incentives that should be made.

Let’s look at a specific example of the kind of incentives to which I object. Hullinger talks about equalizing costs of redevelopment with greenfield development. One of the tools to accomplish this is something called an “enterprise zone.” Its very purpose is to help cities revitalize their older central cities by providing sales tax breaks on building materials or a partial property tax abatement. The City of Peoria’s enterprise zone looks like this:

Notice where these incentives are predominantly going? Along the riverfront, and far north Peoria. Question: When the same incentives are given to greenfield sites as the central city, what effectiveness do they have? Answer: None. If anyone in the city can receive Enterprise Zone status, it’s no longer an incentive to locate in the central city. It loses all effectiveness, and becomes nothing more than developer welfare — a perk for the well-connected, like Firefly Energy, which you can see received EZ status on the map above (the thin red line that snakes down Detweiller Drive and Route 29 to the old Foster and Gallagher site). EZ status was even used as an annexation tool to keep a pizza place from moving out of the City — a pizza place that had already received an incentive from the City in the form of a business development loan.

When you eviscerate your economic development tools like this, it leads to an arms-race for more extravagant incentives to draw people to the central city. And that needlessly costs the taxpayers more money. We need to maximize the effectiveness of our economic development tools, and that means (among other things) using them where they’re needed, and not using them where they’re not needed.

And under no circumstances should we give a $9 million fee to a private developer to build a private hotel for his private profit. That’s not economic development. It’s pure, unadulterated developer welfare — welfare we can’t afford.

City of Peoria, East Bluff, Economic Development, Peoria Public Schools

Open discussion on Peoria High and East Village TIF

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I have mixed feelings about the recent windfalls of state money Peoria has been told its getting. In the news recently have been announcements that we’re getting $10 million to upgrade Washington Street and $17 million to renovate Peoria High School and build an addition onto Lincoln Middle School.

On the one hand, the money is going for a good cause, and we can certainly use it. On the other hand, the State of Illinois is in a financial crisis, and this additional spending is not helping to alleviate it.

It has led to an interesting question that I didn’t expect to hear while we’re still reeling from the recent recession: what should we do with all the money? Of course, the Warehouse District money is pretty cut and dried. But the District 150 money is another story. I got this comment recently from school board member Jim Stowell:

CJ – can I please ask if you could open the question of how we should best develop PHS and the surrounding feeder system/neighborhoods – what collaborations we should explore, etc. Thx! In light of the recent funding grant, there exists tremendous opportunity. I am optimistic about the East Bluff residential TIF, but I also have reservations. The Dist. will no doubt be convening meetings, but the discussion needs to begin now. Thanks for providing a forum.

I’d kind of sworn off open threads a while back, but this does sound like it would be an interesting discussion. Other readers have expressed interest in this as well. So, always being happy to oblige my readers, here’s an open thread to discuss Peoria High and the proposed East Village TIF.

I’ll just add that while Mr. Stowell may be “optimistic about the East Bluff residential TIF,” that doesn’t appear to be the official opinion of District 150. The District’s interim comptroller Dr. David Kinney has been attending recent City Council meetings, and when I asked him why, he said it was in case an opportunity came to speak about the proposed TIF. He’s not what you’d call a fan of the idea. On its face, he says it’s a recipe for disaster. The preferred outcome is that it would encourage families to move back into the East Bluff. If it’s successful in doing so, it will require more services from District 150 to educate the increasing number of children, but provide no additional tax revenue to support them. Thus, it would put even more of a strain on District 150’s already stretched finances.

The proposed East Village TIF area is currently being studied for eligibility (this is perfunctory, as no proposed TIF has ever been found ineligible), with the consultant’s report scheduled to come before the council November 9.

City Council, City of Peoria, East Bluff, Economic Development, OSF St. Francis, Peoria Mayor, Peoria Public Schools, TIF

The East Village Growth Cell is born

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The City of Peoria is taking steps toward establishing another growth cell and tax increment financing (TIF) district. There’s even a website devoted to it. The website is very informative; it includes a map, a frequently-asked-questions (FAQ) page, and a timeline.

Here’s a brief overview of what’s happening: The City has been using a “growth cell strategy” to expand and develop the north and west fringes of the City. They now want to “apply the City’s Growth Cell Strategy to the heart of the City; taking advantage of existing infrastructure and building upon existing public and private investment.” So, they’ve carved out the following area to redevelop:

As you can see, they’re calling this the “East Village Growth Cell.” Already, there is “increase[d] interest in redevelopment,” they say, as a result of the new Glen Oak School and Neighborhood Impact Zone, but “additional public guidance and intervention are needed to further spur growth within the area,” according to the website. So, they want to get this area designated as a “Redevelopment Project Area” and classified as a “blighted area” or “conservation area” so they can create a new TIF. The growth cell and TIF would be coterminous.

That’s it in a nutshell; there’s more information at www.EastVillagePeoria.com.

Of particular interest in this whole process, though, is OSF’s involvement. They’re putting up the money for the study, the website explains: “As one of the larger investors within the East Village, OSF has agreed to advance the cost for the Consultant that will be reimbursed to OSF out of first proceeds if, and only if, Council approves a redevelopment project.” And the Catholic Diocese (specifically Patricia Gibson, Chancellor/Diocesan Attorney) issued the following press release today:

On behalf of the Catholic Diocese of Peoria, I would like to express my overwhelming support for the proposed East Village Growth Cell. This creative and progressive initiative will advance the quality of life of individuals living in the study area and make essential improvements to our most historic and traditional neighborhoods.

Our most precious resources are the families who live throughout the City of Peoria. It’s particularly important that we engage these families throughout the process and demonstrate the City’s commitment to provide resources to reinvest and revitalize the heart of our community. This study area can be the stepping stones to a new beginning for the neighborhoods located within the East Village Growth Cell.

“The proposed study area will be a tremendous blessing to the Peoria community,” says Patricia Gibson, Chancellor/Diocesan Attorney. “The Catholic Diocese has made major investments within the proposed study area including the ongoing restoration of Spalding Institute and a new Pastoral Center. Additionally, St. Mary’s Cathedral and St. Bernard’s Parish are uniquely located within the proposed boundaries. We believe that this neighborhood will continue to grow and flourish, and we are confident that an investment of this magnitude will open the door to future development.”

OSF Saint Francis Medical Center has lead the way in providing the highest quality of health care for our city. They continue to show their commitment to the community with the expansion of their campus. We trust that the continued involvement of OSF will greatly enhance future development.

And the City of Peoria also issued a press release that quotes several community leaders; here’s part of it:

A new strategy will ensure that these projects are completed in a consistent manner, thereby becoming a catalyst for future investment.

On July 13, 2010, Members of the Peoria City Council will be asked to approve a request for proposals to conduct a study in the East Village Growth Cell. The study will determine if the area is eligible for redevelopment. A residential TIF has the potential to create opportunities for major improvements in the study area. This initiative marks the first time that the City of Peoria has done a study that includes housing.

“This could be a unique project in that it incorporates opportunities for residential re-development in the heart of one of our older neighborhoods. I believe the council will be anxious to see the study move forward and have an opportunity to discuss the findings.  Perhaps it will generate a model we can use in other more mature areas of our city,” says Mayor Jim Ardis.

Development in the proposed East Village Growth Cell will compliment the ventures currently undertaken in the area, including investments by OSF Saint Francis Medical Center and District 150 in the surrounding neighborhood. The study will also provide the opportunity to develop businesses within the Growth Cell.

The East Village Growth Cell presents an opportunity for a major collaboration between Peoria School District 150, OSF Saint Francis Medical Center, and the City of Peoria.

Dr. Grenita Lathan, Superintendent of Peoria Public Schools said, “We look forward to partnering with the City and OSF on this potential growth opportunity for Glen Oak School and the surrounding neighborhoods.”

“OSF Saint Francis Medical Center is pleased to support the East Village redevelopment project. We believe the stabilization of the neighborhood and the increase in home ownership will have a positive impact on the area,” says Sue Wozniak, Chief Operating Officer, OSF Saint Francis Medical Center.

The study area has the potential to provide for future growth, improvements to the surrounding neighborhoods, and redevelopment of affordable housing.

So, let’s see, the Mayor, the D150 Superintendent, the OSF COO . . . . I do believe this is a highly coordinated effort. All these press releases, the website, a surprise public meeting with residents, and the City Council agenda came out on the same day at the same time. Sounds like yet another deal that has been brokered behind closed doors and rolled out to the public with great fanfare, ala the Wonderful Development.

I hate to be cynical, but this just looks like a typical “done deal” with public input solicited after the fact for window dressing. It bothers me that there’s been so much apparent coordination by public officials out of the public’s eye. The public doesn’t have much time to look into this project before the City votes on pursuing it. That’s generally how the Council likes it.

City of Peoria, Economic Development, Peoria Streets

Peoria’s priority problem

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“The city doesn’t have a budget problem,” Gary Sandberg told me after the city council voted to spend taxpayer money for a walking trail and a private hotel. “It has a priority problem.”

That was the same observation made by Dr. Heywood Sanders of the University of Texas-San Antonio. Sanders is a well-known critic of the convention center (and increasingly, headquarters hotel) “arms race” taking place in cities across America. He’s currently writing a book about it. I asked for his thoughts on the argument that cities simply must offer huge, tax-supported incentives.

The argument goes like this: “In an ideal world, the free market would reign and projects like the hotel would be built 100% by private investment. But that’s not the world we live in. We’re in a struggle with other communities that are providing public incentives in order to lure businesses to their cities. If we don’t compete in offering these kinds of
incentives, we’ll lose out. It’s not the way it’s supposed to be, but it’s the way it is, and we just have to play the game.”

Dr. Sanders has heard the argument many times before. His response was instructive:

The “we have to do it because everyone else is” argument is repeated endlessly in city after city to justify a host of “economic development” efforts. But that doesn’t make it correct. Cities do need to compete for some things. The crucial questions are what the goals are that the city seeks, and whether the decisions make sense or not. The “we have to” argument neatly avoids laying out real goals and objectives, things that can be measured and assessed over time. And an investment decision necessarily involves risk.

The real [important things to consider are] what the potential rewards are, how they relate to community goals, and what the balance of costs and benefits are. It’s all too easy to hide behind simple homilies so that one doesn’t have to really consider what you’re trying to get, and whether it makes sense. As we’ve discussed, Peoria (like a great many cities) has been trying to “save” its downtown for decades. It doesn’t appear to have made much headway. If that’s really the goal, then you need to consider multiple strategies and alternatives, and see what actually happens.

The problem is that planners and local officials almost invariably seek to imitate what someone else has done, with little understanding of how it came about and why it works. There’s an endless parade of architects, planners, and local officials who visit San Antonio’s famed Riverwalk and conclude that all they need is [a] river (or a canal) to get “economic development.” It’s not that simple. Just like everyone thinks building a new convention center will bring hordes to town, and that they then need a new hotel to make the convention center work. And there are a host of consultants who are willing and eager to give local officials (and the business interests they serve) the urban solution du jour.

Peoria has a long history of trying to use large civic projects as a silver bullet to revitalize downtown:

  • The Civic Center was supposed to revitalize downtown, but it hasn’t. It does bring people downtown for Civic Center events, but once the events are over, they all get in their cars and empty out of downtown. The restaurant with the best location relative to the Civic Center — the Grill on Fulton — couldn’t even stay in business. The Civic Center continues to operate in the red every year.
  • Then the City developed the riverfront. There was $2.6 million for the Gateway Building, which the City spends $170,000 a year to operate and maintain. They tried to sell it in 2007, but were evidently unsuccessful. Riverfront Village — the raised concrete slab with parking underneath it that blocks your view of the river — was supposed to “pay for itself” with increased property taxes and parking fees. Parking is now free, and the tax-exempt Heartland Partnership is one of the three tenants on the slab. According to the 2010 budget, the Riverfront is expected to bring in $1.07 million in revenue toward the bond payment of $1.3 million.
  • Then there was One Technology Plaza, which was supposed to “redefine downtown.” Remember that? As the Journal Star editorialized a year after it opened, One Technology Plaza “was advertised as a novel way to put Peoria on the high-tech map, to distinguish Peoria and its work force from virtually every other mid-sized city in America.” The city spent $9.6 million on that project “in part because the $28 million private development would feature the computer-training agency.” That agency — RiverTech Center — opened in April 2000 and closed in May 2001.
  • Then the City acquired and prepared the land for a new ballpark to the tune of $3.3 million. That was supposed to lead to a renaissance south of downtown, turning blighted properties into a “Wrigleyville” atmosphere. The ballpark opened in 2002, but no Wrigleyville has materialized.
  • Along the way, the City picked up the Sears property for around $1 million — the so-called “crown jewel” of downtown Peoria. They’re poised to give the land away to the County so Lakeview Museum can relocate to the block at taxpayer expense.
  • And then there’s the Wonderful Development (City attorney Randy Ray’s ebullient appellation for the downtown hotel project), which the City Council has approved twice now. It’s a big project with a single developer and no public benefit — but a lot of public risk. This is the latest big, civic, silver bullet that will finally bring tourists to Peoria and make the Civic Center profitable. But just like with the other projects, no measurable, objective criteria for success has been identified for the downtown hotel project. Presumably, as long as the project meets its debt obligation, it will be declared a success, regardless of whether it brings in new conventions, regardless of whether other hotels and restaurants close.

The completed projects have not delivered on their promises of downtown revitalization, and there’s little reason to be hopeful that the proposed projects will fare any better. These projects are all big, flashy, and give the appearance that “things are really booming in Peoria.” Meanwhile, many less-exciting projects get put on the back burner or eliminated altogether. Those projects are called “basic services.” Things like road and sidewalk repair.

At the same time the Council approved the Wonderful Development, there was another $40 million project the council could have funded instead. It’s the Washington/Adams (U.S. Route 24) upgrade project. This would improve Route 24 from I-474 to I-74, which would benefit the public (it’s a public street) as well as numerous business/land owners and developers all up and down the stretch. It would implement key elements of the Heart of Peoria Plan (adopted “in principle” by the City Council) and the Warehouse District form-based code.

It would remove the median from the southern portion of the roadway, making the properties along that stretch more accessible and marketable, thus raising their value. It would make the Warehouse District area more pedestrian-friendly, spurring development of loft apartments/condos which would bring more residents back to downtown, which will spur more demand for retail services in the City’s central business district. Currently many of those properties sit vacant, contributing to the City’s budget woes.

This project is not without risk. There might not be enough property improvements or increases in tax receipts for the project to “pay for itself” (although I’m sure the City could find a consultant to say it will pay for itself if they really wanted to do it). But the project also carries significant public benefit, and the presence of multiple developers and property owners over a large, diverse area mitigates the risks. Yet this project languishes in the Land of Insufficient Resources while the Wonderful Development moves forward.

Conclusion: Success is not a priority for Peoria. Downtown revitalization isn’t really a priority for Peoria. Peoria’s’ biggest priority is the appearance of progress. And based on that criteria, we can all say “mission accomplished.” There’s a lot going on. Stuff being built. Stuff being torn down. Money being spent (mostly tax money, alas). It all contributes to the image that Peoria is moving and shaking.

But it’s not. Peoria is in debt and it’s continuing to lose population. City services are being slashed every year, driving more people away. The appearance of progress is bankrupting us. It doesn’t just affect the City. It also affects the County and, especially, the school district (Things are changing! Look at our shiny new buildings! Just don’t look at our test scores).

Sandberg is right. Peoria doesn’t have a budget problem. It has a priority problem.

City of Peoria, Economic Development

Enterprise Zone answers raise more questions

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Back in May, Peoria’s Economic Development director Craig Hullinger asked District 150 to be a part of the Enterprise Zone for the Main Street Commons project, and I wrote this post in response. Craig, who is a really nice guy and very communicative, wrote me and we had an interesting e-mail exchange. He asked me if he could post it on his blog (did I mention he’s very communicative?), and I said that was fine with me, so here it is. I’m not sure why his post is dated September of 2008 because we didn’t have our discussion until just the last couple of months. Perhaps he just updated an old post.

Anyway, I was rereading it today, and now I have some more questions. For example, Craig says:

Any development is risky. The safest developments are on undeveloped land (green grass sites). It is easier to buy a large tract of land. Less likely to have costly environmental problems hidden underground. Urban redevelopment is always more difficult. It is harder to assemble the land – usually multiple owners. Older areas have more poverty and crime.

I think you can see that this is true by comparing the level of development in the suburban areas of Peoria versus the older areas. More development takes place in new areas. It is always a struggle to get investment in older areas. We try to equalize the difference between new and old with incentives.

Now look at this map of the current Enterprise Zone:

EZ map 2 28 09

Notice the big red area up in the far north part of town? Up there where there are green grass sites? Where it is easier to buy a large tract of land? Where it is less likely to have costly environmental problems hidden underground? Up where they, in short, need no incentives?

Why is the Enterprise Zone up there?

And furthermore, doesn’t that just step all over the theory of “equaliz[ing] the difference between new and old with incentives”? If a developer can get the same incentives up where there’s a green field, doesn’t that kind of “equalization” work against redeveloping the older parts of town?

One more question, for the record. Craig said:

There is a good market. We hired the premier market research firm, Tracy Cross, to assess the market for new close into downtown housing. They said the market was strong, for creative class young professionals, but that renters lead the urban renaissance, and that the rents had to be about $1.00 a square foot. It is hard to build a quality brick building that will rent for that rate without incentives.

So, we can expect this development to be a “quality brick building” now that these incentives are in place? And that rents will be competitive? So noted. I’ll be referring back to this post when the construction materials are made public. When I asked at the public meeting what materials would be used, I was told they hadn’t decided yet.