Category Archives: Peoria Civic Center

City Council, City of Peoria, Peoria Civic Center

“Wonderful development” agreement raises questions (Updated 2x)

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The proposed redevelopment agreement (aka “wonderful development”) for the Pere Marquette hotel was finally made public at 5:00 p.m. on Friday. Monday night, the council will be voting on it. Council members have to read all the details online because the hard-copy packets weren’t ready by the end of the day Friday. Talk about a fast track!

In reading the agreement, some things caught my attention, and I hope the council members consider these items carefully before voting. In fact, it would be better if they deferred this until their next meeting instead making a hasty decision, but I’m not holding my breath expecting that to happen. Anyway, here are my concerns:

1. The use of General Obligation Bonds

The nearly $40 million in city funding is proposed to be in the form of general obligation bonds instead of revenue bonds. Both types of bonds would be paid back out of revenue generated by the project, assuming the project is profitable. The catch comes if the project is (God-forbid) not profitable. General obligation bonds are backed by the full taxing authority of the city. So if the project goes south, the bonds get paid for out of the city’s general fund — that is, taxpayers assume the risk. Revenue bonds are backed by the hotel building itself (which is used as collateral) and/or a specified revenue stream (H taxes, for instance), so if the project goes south, bond holders would be able to foreclose on the hotel, but the city wouldn’t be obligated to settle up the debt out of the general fund. As a taxpayer, that makes me nervous.

The explanation given in the packet is a bit cryptic: “A revenue bond is not likely to be successful because there is no current revenue and, thus, no history on which to base a revenue stream. A revenue bond would almost certainly result in a higher interest rate for the City.” Perhaps someone out there with a finance background can explain this to me. I thought the lack of history for a revenue stream was precisely why revenue bonds had higher interest rates. Under the scenario presented, when would a municipality ever be able to utilize revenue bonds for new construction?

2. Optimistic occupancy projections

The developer of this hotel project is anticipating occupancy rates of 60% in 2012, 69% in 2013, 72% in 2014, and 74% in 2014 and beyond — best-case scenario. However, the developer also states that the hotel will be successful even under more conservative figures: 60% in 2012, 65% in 2013 and 2014, and 68% in 2015 and beyond.

The Pere Marquette had a 54% occupancy rate in 2005, according to published news reports. And in September 2006, a Civic Center Hotel Study was prepared by HVS Convention, Sports, & Entertainment Facilities Consulting. They were looking at building a new hotel immediately adjacent to the Civic Center that would add 250 rooms to the hotel market and compete with the Pere and other downtown hotels. The project being proposed now, of course, is an expansion of the Pere by 200 rooms (the addition of a new tower). Their market analysis concluded:

HVS estimates a stabilized occupancy of 67% for the proposed Civic Center Hotel. Although the subject property may operate at occupancies above this stabilized level, we believe it is equally possible for new competition and temporary economic downturns to force occupancy levels below this selected point of stability.

So, the stabilized occupancy rate prediction was 67% in 2006 — before we entered a recession — which is a point lower than the “conservative” stabilized rate the developer is now using for his projections — in the midst of a recession.

When this report was presented to the City Council, Bob Manning asked about that projected occupancy rate and whether it could support a 250-room hotel:

Discussion was held regarding the projected number of room stays and how the projections were determined. Council Member Manning expressed concern regarding how the occupancy rate was determined, which he felt would not support a 250-room hotel. Mr. Hazinski said he agreed and that was the reason the study projected a decrease in occupancy rates in the market. He said the market ran in the mid-sixties when it was doing well, and really could not be expected to do better than that.

Given this information, and the fact that we are in a recession, it would seem that the more conservative figures are closer to the truth. And if you look at the bond payment scenario based on those conservative figures, there’s not a whole lot of room for error. It looks like, if they miss their projections on those occupancy rates by even a little bit, they could be quickly operating in the red. Guess where the money comes from to make up the difference if that happens — money that could be used to pay police officers or fix streets and sidewalks.

Also, what’s the average room rate going to be? That seems like a reasonable piece of information to include, especially in financial predictions. It will make a difference when it comes to occupancy rates. If these rates are higher than the Embassy Suites and a newly-renovated Holiday Inn, will budget-minded conference-goers and their employers opt for cheaper room rates and forgo the luxury and convenience of an attached “headquarters hotel”?

3. Questionable comparisons.

In the Request for Council Action cover memo, Interim City Manager Henry Holling mentions several other hotel projects in Illinois that used government subsidies, including Normal, East Peoria, and Tinley Park. So I thought I’d look up a little info on those projects.

  • Normal Marriott — This project should give us pause. According to documents available on the Normal.org, “In July of 2004, the Town of Normal entered into a redevelopment agreement with Mr. John Q. Hammons of Springfield, Missouri pertaining to the construction of a full service Marriott Hotel and Conference Center along with a required parking structure…. [T]he total project cost was estimated by the developer to be approximately $43 million ($30 million-hotel; $8 million-conference center; $5 million-parking garage).” Normal’s subsidy was estimated to be about $13 million toward the project. However, by October 2006, the estimated cost of the project had risen dramatically to $72.6 million — a $29.6 million (68.8%) increase! That, of course, meant that the Town of Normal’s share also ballooned to $21.1 million. Despite that huge increase, their share of the overall investment was only 29%. Here in Peoria, the city’s share of the Marriott project would be 40%.

  • East Peoria Embassy Suites — In 2003, the plan was to build a publicly-owned conference center and a privately-owned but publicly-subsidized Embassy Suites. The developer was the same as in Normal — John Q. Hammons. Fortunately for East Peoria, the costs didn’t rise as much as they did for Normal, only going up to $60 million. Holling’s memo states, “The level of subsidy [being proposed in Peoria] is also similar to the level provided for the Embassy Suites in East Peoria, which was also approximately 40% of the total project costs.” Yes, but we’re comparing apples and oranges here. In East Peoria, their $25 million subsidy paid for 100% of the conference center with the rest going toward the hotel. $25 million is about 42% of $60 million. But if you look at East Peoria’s subsidy to the hotel alone, it only comes out to 27% ($13 million out of $48 million). In 2007, the city decided to lease the conference center to Hammons for a progressive annual fee. They use that money to pay off its construction cost ($12 million) plus maintenance and improvements instead of relying on what one East Peoria commissioner called “unpredictable net revenue.”

  • Tinley Park Convention Center with Holiday Inn Select — According to Mr. Holling, “Tinley Park built their center with substantial governmental assistance, and is preparing a major expansion.” In the context we’re talking about, that sounds a bit misleading. Yes, construction of their approx. $6 million publicly-owned convention center was funded 100% by a $7.5 million bond issue. But the adjacent Holiday Inn Select was built with little governmental assistance compared to Normal and East Peoria. The only governmental assistance that $15 million project received was inclusion in a TIF district and some assistance with land acquisition. The hotel plan actually predated plans for the convention center and was part of a development of 300 town homes, also included in the TIF district. The Chicago Tribune reported just this month (12/4/2008) that an expansion is planned: “Tinley Park owns the convention center and will invest more than $10 million in the project. The money will come from tax-increment finance revenues, which come from increased property value from a designated area.” The hotel is also expanding, but on its developer’s own dime. Mid-Continent Development and Construction, “which manages the [convention] center and owns the adjoining Holiday Inn Select…plans to invest $10 million into upgrades to the hotel, including 68 new rooms and a second kitchen to the six-story hotel.”

None of these projects approach the kind of deal being proposed in Peoria. The highest subsidy among these three initiatives was 29% of the total project cost. So why do we need to pay 40% in Peoria? Holling explains: “The Embassy Suites did fund the Conference center construction, but site acquisition and assembly was lower cost and no parking structure was required.” So, apparently, the reason why Peoria taxpayers need to pony up more money is to help with land acquisition ($22 million) and parking ($10 million). And of course the $5 million sky bridge. Those three things total about $37 million.

So, the question is, is it worth it? That’s the ultimate question that needs to be asked and answered Monday night.

UPDATE: Regarding land acquisition, the Journal Star reports the Pere Marquette is being acquired for $11 million. The information presented to the City Council indicates that total acquisition costs are $22 million. That means the remaining properties (Lasher building and Big Al’s entertainment complex) are being purchased for $11 million. Yet the fair market value of those buildings, according to the Peoria County Assessor (and the amount on which they pay property taxes), is only $1,353,540. Even going by recent sales amounts, the Lasher building (corner of Main and Monroe) sold in August of this year for $1.05 million, and the four parcels that make up Big Al’s entertainment complex sold in 2004 for $1.5 million. That’s a total of $2.55 million for all the buildings — yet the City is poised to purchase them from Al Zuccarini for $11 million. Plus, they’ve already facilitated his move to an as-yet-undisclosed location, likely to be 414 Hamilton Blvd., by changing their adult use ordinance. Wow. One would think with that kind of money (our tax money, by the way), Al could have found a place that complied with the adult use ordinance as it stood.

UPDATE 2: The Journal Star agrees with me. Excellent editorial. That new guy is working out okay. 🙂

City Council, City of Peoria, Peoria Civic Center

On hotels and sky-bridges: Look past the hype, Pt. 2 (Updated)

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One of the apparent non-negotiables of this hotel deal is the $5 million pedestrian bridge that is supposed to connect the proposed Marriott to the Peoria Civic Center and the hotel also have other luxuries like a gym and a pool that they kept clean using the best pool filter for this. We are told that this will help the Civic Center draw bigger conventions to Peoria because what’s been holding us back is the lack of high-quality hotel space adjacent/connected to the Civic Center. In order for the Civic Center to consider the Pere/Marriott its official convention-center hotel, it wants to have it physically connected.

I buy the lack of high-quality hotel space — our hotels definitely need to be upgraded. But I’m not sold on the physical connectedness being essential. No objective study that I’m aware of has quantified how much more business we would get by having a physically-attached hotel.

Indeed, in a 24 March 2006 memo to the City Council, the Civic Center Authority itself said, “We believe [the expanded Civic Center] can be successful without an attached hotel [emphasis mine] but more and larger regional opportunities will be possible if more and better downtown hotel rooms are available.” Note their main concern is quality and quantity of rooms. The C. H. Johnson Master Plan Analysis said, “To effectively service a convention center and add value to the convention sales effort a hotel property must typically must be located within ten blocks (or reasonable walking distance) [emphasis mine] of a center, the property must be willing to commit approximately 60 percent of its room inventory to the convention center room block, and the hotel must offer a quality room product.” The Pere Marquette and the proposed addition is within one block. Here’s another quote:

The Peoria Area Convention and Visitor’s Bureau tracks “lost” convention and meeting business. These are groups that that looked at the city, but ultimately decided to stage their events in another market because the PCC was either too small, the hotel room inventory in downtown Peoria was insufficient or not of the quality preferred by meeting planners, or other factors.

Again, the quality and quantity of rooms was most important according to the Civic Center’s own study. Connectivity was not a major factor.

I’m not saying that having an adjacent or connected hotel would not be an additional advantage for convention sales. I’m saying that (a) it’s not the most pressing problem holding back convention business, and (b) there’s no quantifiable data showing that building a $5 million sky-bridge is going to give the Civic Center a sufficient additional bump in convention sales to justify its cost. How many years (decades?) would it take for the city, private investors, etc., to see a return on that investment? To put it another way, evidence from the Civic Center and their consultant indicates increasing the number and improving the quality of rooms will provide a sufficient boost to convention sales; the additional amenity of a sky-bridge does not appear to provide a $5 million added value. The only “evidence” I’ve heard in support of a sky-bridge as a way to bring in more convention business has been anecdotal or, at best, inconclusive.

Another problem with the sky-bridge plan is this: the hotel plan includes street-level retail around the parking deck, which is a good thing if you’re trying to activate the street. But these shops are going to be below the sky-bridge. The people most likely to patronize those shops — the hundreds of guests staying at the hotel during a convention and walking back and forth to the Civic Center — are going to be directed to the sky-bridge to access the Civic Center. And the shops will be inaccessible from the sky-bridge. Has anyone thought about the self-defeating nature of this plan? Who is going to be on the street to patronize these businesses?

Mayor Ardis is quoted in the paper as saying, “In addition to improving the ability of the Civic Center, it will help us revitalize Downtown Peoria on the business side.” With all due respect to the Mayor, downtown is not going to be revitalized by taking more people off the streets and funneling them through sky-bridges. Plenty of other cities have proven it.

Generally, sky-bridges are a thing of the past. Cities that have them are removing them. They’re outdated and cause more problems than they solve. We should be learning from the mistakes of other cities instead of making the same mistakes ourselves. That’s the thesis of a report by Kathleen Hill, written while she was getting her Master’s degree in urban planning from the University of Utah.

I’d love to quote the whole darn thing, but it’s 43 pages long. So let me quote just this one passage that deals with the most common justification for sky-bridges I hear:

And for those who argue that protection from the elements is necessary, consider the following write-up (People of the Skyway, November 2004) specifically addressing skywalks in the winter cities,

“Why doesn’t Chicago or New York or any of dozens of other cold-climate urban centers have skyways? After all, the main difference between winters in the Twin Cities and in other places is the outlier months, November and March, which tend to be colder and snowier here. The answer is simple to urban architects and planners like Ken Greenberg, head of Toronto-based Greenberg Consultants: Skyways are a bad idea. “The skyway network is a prime example of a highly focused, oversimplified solution to one problem—exposure to climate—that in turn creates others,” he says. “Climate protection is achieved but at a great cost. Street life virtually disappears; retail is moribund, functioning at best for weekday noon hours but not on weekends or in the evening.” That criticism hits its mark in both downtowns, but particularly in St. Paul, which practically ceases to exist outside regular office hours. As one fellow bus-rider remarked to another the other day, heading from downtown toward Lowertown, “This really is a ghost town after five.”

A primary mover behind the downtown development blueprint St. Paul has been following since 1996, “The Saint Paul on the Mississippi Development Framework,” Greenberg points out that retail and street life can and do thrive in similar, very cold urban areas without skyways—even in places just outside downtown. “A good example is Grand Avenue in St. Paul,” he says. And downtown St. Paul itself, before the skyways. “Where skyway solutions have been employed in other cities like Toronto, Calgary, and Edmonton,” Greenberg adds, “the results have been similar.”

For evidence, Greenberg points to an April 11, 2004, editorial in the Hartford Courant, in which urban planner Toni Gold delights in the demise of that city’s twenty-year-old skyways (which they called “skywalks”). Gold, who works at a New York City nonprofit called Project for Public Spaces, begins her commentary: “Hartford’s skywalks are coming down, with barely a whimper of protest from their one-time proponents, or even a hurray from their one-time opponents. Well, hurray, I say. Two cheers for city sidewalks. It’s now become obvious and widely acknowledged that cities should reinforce their sidewalks, not compete with them.”

Incidentally, the report goes on to state that Minneapolis mayor R.T. Rybak “refus[ed] to build a large hotel adjacent to the Minneapolis Convention Center, precisely because ‘people wouldn’t get out on the streets enough’.” I’ll bet they still get more conventions than we do, even without an attached hotel.

UPDATE: When I wrote this post, I was unable to access the entire C. H. Johnson study because the Civic Center’s link to it had been removed, so I was relying on incomplete information. Never a good idea. I have since been able to obtain a copy of the full report (now available here on my site), and it does, in fact, propose a sky-bridge to connect the Pere Marquette to the Civic Center:

With the recommended expanded and renovated facilities, Peoria will need a larger, higher-quality hotel package. In order to not only be competitive, but to accommodate more and larger groups, Peoria should consider:

  • Connecting the Hotel Pere Marquette to the Peoria Civic Center via walkway, as is the case in many cities in the US. One recent example is the 257-room Radisson Hotel in Lansing, Michigan, which is connected to the Lansing Center via a heated sky bridge over the Grand River.

That correction made, however, my larger point still stands. The report does, in fact, focus primarily on the number and quality of rooms available within close proximity. The additional boost that physical attachment would give is not quantified. And, I’m sorry, but I just don’t see Fulton Street as the same kind of physical barrier as the Grand River in Lansing.

City Council, City of Peoria, Peoria Civic Center

On hotels and sky-bridges: Look past the hype, Pt. 1

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At its next meeting scheduled for Monday, Dec. 15, the City Council will almost assuredly approve a new hotel development in downtown Peoria that includes an elevated pedestrian walkway, or sky-bridge, connecting the hotel to the Civic Center.

Naturally, the prospect of getting a downtown hotel of the caliber of a Marriott is exciting. New and/or improved hotels are desperately needed in our central business district by all accounts. When someone comes to the city and waves a $102 million project under their noses, it’s hard not to jump at the opportunity.

But this isn’t a purely private venture. The developer and investors are asking for just under $40 million in revenue bonds from the city to help pay for construction. These bonds would be paid back with revenues from the hotel over a 23-year period. It’s being presented as a sure thing — but there is a risk to consider — whether the hotel will perform well enough to pay back those bonds. The council members have an obligation to weigh that risk and make their decisions based on facts and the long-term interests of Peoria’s citizens, not hype.

And there’s no small amount of hype, starting with one city official’s pronouncement that this is a “wonderful development” before it was even made public. More recently, it’s been described as “a key to bringing large conventions to central Illinois and generating millions in revenues every year,” as the Journal Star put it. But are these predictions about the Civic Center and the need for a hotel with a sky-bridge to be believed?

Heywood Sanders warned the Peoria City Council back in 2004 — before they voted to expand the Civic Center — that similar predictions then of “millions in revenues” from “large conventions” being lured here were wildly optimistic. The Journal Star reported on October 18, 2004:

Since the mid-1980s, Sanders has reviewed more than 80 feasibility studies for new or expanded convention centers and tracked the outcome of those facilities in terms of new conventions and trade shows added to the annual roster, attendance at those events and hotel nights resulting from new convention business.

Without exception, every report has assured cities that if they “build it, you’ll do great.” But high expectations laid out within the studies are going unrealized as the convention market stagnates and new or recently renovated centers add millions of square feet of space per year, effectively shrinking the share of business to go around, Sanders said.

Sanders told a U.S. House of Representatives subcommittee basically the same thing in 2007:

The expansion of convention center supply, coupled with changes in demand and convention attendance since the late 1990s, has resulted in a highly competitive market. A great many cities have seen significant decreases in their annual convention and tradeshow attendance in recent years, and have come to rely on a variety of financial incentives.

And what are those “incentives”? Mainly discounts on rental costs and hotel rates. He goes on:

The increased competition for convention business has two direct implications for communities that have invested in new or expanded centers. First, discounts and incentives reduce the operating revenues of a center, increasing annual operating losses and the public subsidies required for convention center operation. Second, the volume of annual convention attendees has become increasingly uncertain, as groups and organizers face a growing roster of medium to large size centers seeking to gain new business.

So, what are the projected revenues for this hotel? Are they realistic? Or are they based on optimistic numbers in a consultant study like the C.H. Johnson Consulting study from August 2002 upon which the $55 million expansion of the Civic Center was based? Johnson Consulting at that time predicted “an additional 221,600 visitors to Downtown Peoria in the first year after improvements are complete, with 87,500 attending 66 new events in the convention and ballroom areas,” according to the Journal Star, and “The total of new visitors would spend an estimated $19 million, generating $1.4 million in general sales taxes, $188,000 in hotel taxes, $102,000 in restaurant taxes and $36,000 in amusement taxes.”

So, let’s add those numbers up and compare them to actual figures. In the first year after the expansion was completed, we should have seen 66 new events and $326,000 more in HRA tax revenue. The expansion was completed in 2007. At the end of fiscal year 2007, the Civic Center reported 544 events and $1,729,846 in HRA tax revenues. At the end of fiscal year 2008, the Civic Center reported 590 events and $1,779,762 in HRA tax revenues. That works out to an increase of 46 events and $49,916 in increased HRA tax revenues — both well short of projections, just as Sanders had predicted.

Note in particular how far short the HRA tax revenues fell — they rose only 15% of what was projected: $49,916 instead of $326,000. Will the hotel’s occupancy and revenue projections be more accurate? St. Louis’s taxpayer-owned convention center hotel (also a Marriott, incidentally), which opened in 2000, is on the verge of having its bondholders foreclose on it since it started missing payments due to lower occupancy than expected. Peoria would be wise to double- and triple-check the numbers before agreeing to put the city on the hook for $40 million.

City Council, City of Peoria, Peoria Civic Center

“Wonderful Development” odds and ends

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Since I started writing on this proposed hotel project, I’ve gotten some calls and e-mails about issues directly and indirectly related to it. Rather than put up an individual post on each item, I’ve decided to just lump it all together under “Odds and Ends.”

Details, Details

I was contacted by a person who is close to the hotel project but wishes to remain anonymous. He told me a lot of the same things Billy has already mentioned in this post, but he added some information and elaborated on other issues:

  • This project has been in the works for over a year and a half.

  • The Hospitality Improvement Zone TIF (HIZ TIF) was proposed because of this potential development. However, the TIF was spread out to include the other existing downtown hotels so they could all take advantage of it if they so desired. Since the establishment of a TIF was open to numerous public hearings and ample public discourse, they feel that the public interest in this project has so far been served.

  • They’re not asking for any additional public subsidy other than those already available (TIF, Enterprise Zone, etc.). So it’s not going to cost the city anything that would directly impact their capital or operational budgets.

  • Part of the business plan of the investors is to be the convention hotel for the Civic Center. And that’s why they want the skyway (climate-controlled pedestrian walkway/bridge) to connect the hotel to the Civic Center. You may recall that the Civic Center Authority believes an attached hotel is “critical” to their expanded Civic Center’s success.

  • Their plan is to tear down the current parking deck and build a new one that will have retail shops on the ground floor. Hence, even though they would be adding a skyway, they believe they will actually be helping rather than hurting pedestrian activity on the street as they will be generating pedestrian traffic with the new street-level shops.

  • There has been some confusion over whether there will be two hotels or one. There will be one. These investors will buy the Pere Marquette and acquire the rest of the block. The other buildings on the block will be razed and a new tower built that will be as high as the Pere Marquette, built of brick, masonry, and glass, and designed to complement the Pere’s architecture. Once the new building is up and running, the old Pere building would be temporarily closed for top-to-bottom renovations. However, they would maintain the historic character of the Pere — i.e., they will be cleaning it up, but not changing it in architecturally-significant ways (meaning some changes will have to made for ADA compliance and things like that). Once it’s all done, it will be one big hotel under one flag.

  • They claim the project will be fully compliant with the Land Development Code and the principles of New Urbanism (except for the skyway, of course).

  • The reason they want/need to move quickly is because they currently are paying for options to buy all the properties — they haven’t actually purchased them yet, pending approval of this deal by the city and all the pieces falling into place (e.g., Big Al’s moving, approval to raze the remaining buildings, etc.). The longer they wait, the more they pay for the options, so it’s in their interests to conclude this process one way or the other as soon as possible.

  • They want to raze Big Al’s and the other buildings north of it on that block during the winter months when they can’t do any construction anyway, then start construction on the new tower in the spring.

  • The major hotel chain that they want to bring in won’t fly their flag across the street from a strip joint, so if Big Al’s moves across the street to the former Euro Jack’s at 500 Main, it will have the same effect as them not moving at all. Thus, it would seem most likely that 414 Hamilton would be the new location for Big Al’s at this point, although recent news reports say that Al Zuccarini is willing to consider other sites.

  • Carnegie’s will be elevated to a fine dining establishment again.

  • Perhaps most importantly to the investors, it will be locally owned and operated. To those who say local ownership makes no difference, this source simply points to the difference between the Mark Twain hotel (locally owned by former mayor Bud Grieves) and the Pere Marquette and Holiday Inn City Center (neither locally-owned). The Mark Twain has decent occupancy and is making a profit. Not so with the other two. In fact, rumor has it that the Holiday Inn will be losing its flag before long… again.

Historic Buildings on Main?

I’ve already had inquiries as to whether there will be an attempt to save any of the buildings the developers want to raze:

No doubt some people are just being facetious. But guess what? There has been a fight over historic buildings on this very block in the recent past.

In March 1993, Duane Cassano announced he wanted to raze the circa-1848 building at 531-533 Main because it was crumbling. He struck a deal with the Central Illinois Landmark Foundation, saying he’d replace the building with an “authentic 19th century facade.” Everyone was happy.

And then, in August 1993, Cassano reneged, saying it would be too expensive to do what he’d promised. Instead, he put up a “wood decking” facade. While he was chastised verbally by the city council, it doesn’t appear from published reports that there were any real consequences for going back on his promise.

I have no idea if any of the other remaining buildings have any historic value or if anyone is preparing a last-minute application to the Historic Preservation Commission. I wouldn’t recommend it, though. Anyone who gets in the way of this project is liable to get run over.

Peoria Civic Center

Little-known law of the universe: Civic Center lots must charge more than other lots

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If anyone can explain this to me, I’d appreciate it:

If nearby city-owned garage fees are hiked $1 per vehicle for concerts, hockey and basketball games next year, the Peoria Civic Center then might have to increase its parking costs. … “We’re usually 50 cents ahead of (the garage fees) . . . we’ll have to look at it,” [Civic Center General Manager Debbie] Ritschel said. “Usually people are willing to pay more when you are closer.”

Huh? Why the moral imperative that the Civic Center lot must cost more than city parking garages? And what’s Ritschel’s definition of “closer”? I would contend that the city garage across Jefferson is just as close as the Civic Center lot across Monroe. How curious.

City of Peoria, Peoria Civic Center, Taxes

Higher taxes draw tourists?

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That’s what “two downtown hotel executives” (Donald Welch of the Hotel Pere Marquette and Sami Quereshi of the Holiday Inn City Centre) told the Journal Star. They are quoted in the paper as advocating a quarter-percent increase in the overall HRA tax to “draw large conventions and out-of-towners to Peoria.”

A quarter-percent increase in the (HRA) tax could generate $750,000 to $800,000 to the tourism reserve fund, allowing the Peoria Area Convention and Visitors Bureau to market the Civic Center and other venues to larger-scale conventions and events….

“The impact [of the tax increase] on the individual is insignificant,” [Welch] said. “The impact to the community to have a fund to attract conventions, out-of-towners, is huge.”

Well, that certainly defies conventional wisdom, doesn’t it? Ironically, there was an article in the State Journal-Register yesterday that says the exact opposite. Apparently there’s a proposal by a city alderman to raise Springfield’s hotel tax, and hoteliers are speaking out against it:

Michael Fear, general manager of the Hilton Springfield downtown, said the higher tax would raise only a pittance for the city but could rob Springfield of its competitive advantage when it comes to tourism. “It’s a bad idea,” Fear said. “We are able to attract conventions because of our tax rate. For large meeting planners, 1 or 2 percent can be thousands of dollars. It may be the difference between coming here and not coming here.”

In Springfield, the hotel tax is 10%, so the proposed increase would put it up to 11 or 12%. Here in Peoria, the hotel tax is 11.5%, and a quarter-percent increase would raise it to 11.75%. In Springfield, a tax rate that high would “rob Springfield of its competitive advantage when it comes to tourism.” In Peoria, a higher tax rate “could draw large conventions and out-of-towners to Peoria.” If anyone can figure that out, please explain it to me.

I also love the way hoteliers have turned Economic Development Director Craig Hullinger’s original proposal of a voluntary hotel tax into an overall HRA tax increase proposal in a little over a week and a half. That didn’t take long, did it?

This proposal should be blown out of the water immediately. The HRA tax was supposed to be temporary and for a single purpose — to support the establishment of the Civic Center. It was never supposed to be permanent nor a source of revenue for other agencies (although that hasn’t stopped the city from funding agencies like ArtsPartners from the proceeds).

Besides, didn’t the Civic Center just spend $55 million for expanded convention space so that that development would bring in tons of tourists and boost our economy? Didn’t the council just approve extending the HRA tax another 30 years for that effort? What, that wasn’t enough? Now we need to raise the HRA tax even more?

Hey, I have an idea: why don’t we all just set our money on fire instead?

Peoria Civic Center

Another new scoreboard? So soon?

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ScoreboardBeginning Monday, workers will start assembling and then installing a new video scoreboard that Bruce Ashley promises will be a crowd-pleaser.

”It’s going to reach out and grab them,” says the Civic Center’s operations director.

The $850,000 scoreboard by TransLux Corp. will hang in the center of the arena, as the current one does, but it will have four sides of high-resolution, full-color video, capable of showing live shots.

That was written by Jenni Davis and appeared in the Journal Star just five years ago, on August 20, 2002. What’s in the Civic Center budget for FY2008? A new scoreboard to the tune of $700,000.

Why? Does an $850,000 scoreboard only have a lifespan of 5-6 years? Is it even paid off yet? I notice one of the entries on the Statement of Cash Flows is “Long Term Liabilities,” which includes “principal amount of scoreboard debt, land acquisition debt, and club room / suites debt.” And according to their financial statement from 2004, “The Peoria Civic Center has a note payable with final payment due November 2007 for the scoreboard purchase.”

In looking up information on the Civic Center scoreboard, I found pretty wide-ranging opinions. Bradley’s website praises it in this statement from 4/21/2007: “In recent years, the arena has undergone some major renovations benefiting Bradley Basketball. A multi-million dollar scoreboard with a four-sided jumbo video panel was hung in 2002 and the Braves are playing on a court that is only three years old.” They obviously exaggerated the price, but seem to be happy with it nonetheless.

On the other hand, the Rivermen hate it. The Rivermen Fan Advisory Board had this stinging criticism in January 2007: “The video scoreboard quality is very poor, and the images and voice are out of sync. (The Civic Center is looking at the possibility of purchasing a rear-projection system.)” In fact, their dissatisfaction goes back at least until July 2006. That was less than four years after the $850,000 scoreboard was installed.

If the scoreboard is that terrible, then I think it’s fair to ask why the Civic Center spent so much money on such a poor product. That’s a lot of money to flush down the toilet. Also, what steps are being taken to make a better purchase this time?

It’s probably just coincidental, but I did happen to discover that former Rivermen Vice President of Sales/Marketing Mike Nelson, who worked for the Rivermen in 2003, “served two years as the Midwestern Regional Manager for the Trans-Lux Scoreboard Co.” before he worked for the Rivermen. The current scoreboard was purchased from Trans-Lux.

Update: Some commentators over at the Peoria Pundit are saying the Civic Center purchased the scoreboard used and got it for a bargain. I have no way of verifying that information at this time. But if they did, then I would have to assume the “new” $7 million scoreboard they want to get is used, too. And is this really better than buying new and getting more life out of the scoreboard? Is buying a used scoreboard more analogous to buying a used car or a used computer?

Peoria Civic Center

Civic Center FY2008 Budget

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You may remember that I filed a Freedom of Information Act request with the Peoria Civic Center to get a copy of their “itemized budget.” Here’s the response I received from them in today’s mail:

PDF Link PCCA FY2008 Budget (PDF, 1.3M, 35 pages)

Actually, I got it in a nifty blue report cover with colorful dividing tabs. One page is even in color. What you will see, though, is a black and white PDF copy of it with the dividers removed (however, if you use the “bookmarks” feature on Adobe Acrobat, you can see where the divisions were and what they are titled).

The original information the Civic Center Authority gave the City Council included:

  • Budget Highlights
  • Statement of Income
  • Schedule of Events
  • Capital Expenditures Budget

The information I received today has all of that, plus this information:

  • Budget Ordinance
  • Budget Narrative by Shaun Schoonover, Director of Finance
  • Statement of Cash Flows
  • Indirect Expenses
  • Capital Expenditures Budget [Detail]
  • Fiscal Year 2008 Business Plan Narrative

It certainly is more detail than was disclosed before–especially the “Indirect Expenses” page. Take a look at it and let me know what you think. Have they come clean and vindicated themselves?

City Council, City of Peoria, Peoria Civic Center

What’s the Civic Center trying to hide?

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Tuesday’s Peoria City Council meeting included this intriguing exchange:

[audio:https://peoriachronicle.com/wp-content/uploads/Audio/PCC-Budg-Req-091107.mp3]

The Peoria Civic Center submitted this five-page budget summary document to the City Council. Councilman Sandberg asked, “Is there an itemized budget that culminates in this four or five page document that the City Council has before it? And if so, where is it available for either the council or the general public to review?”

Peoria Civic Center logoDebbie Ritschel, general manager of the Civic Center, answered, “We do have an internal document, councilman, that is significantly longer than the document you get and we’d be happy to sit with you and go over with you at any time…. It is not a public document.” She went on to say, “We’ve always considered [the itemized budget] work product,” and further stated after additional questioning, “We have always considered this an SMG budget between SMG and the [Peoria Civic Center] Authority and then have created then the public document off of that.”

Well, whenever a governmental entity takes your tax dollars and then says you can’t see how they’re planning to spend it because that information is confidential, you know something is rotten in the state of Denmark. I submitted a Freedom of Information Act request today to get a copy of the itemized budget. It will be interesting to see how they respond (they have seven days to do so).

First of all, the Peoria Civic Center Authority is established by state law (70 ILCS 200/205, known as the “Civic Center Code”) and is “a political subdivision, body politic and municipal corporation,” so there’s no question that it’s a public, governmental entity. Thus, it falls under the Freedom of Information Act, which states, “[e]ach public body shall make available to any person for inspection or copying all public records.” Just to drive the point home, the Civic Center Code itself states (70 ILCS 200/205-60), “All records of the Authority shall be open to public inspection at all reasonable hours.” See that first word there? “All.”

The State of Illinois’ FOIA Guide states that a document is “a public record under the Act if it was prepared, or was or is being used, received, possessed, or under the control of any public body.” It’s clear the itemized budget was received and is under the control of the Civic Center because it was from that document that they created the summary document.

Now, it’s true that “[p]reliminary drafts of memoranda in which opinions or policies are formulated [are] exempt from disclosure” — I’m assuming that’s what Ritschel meant when she called the itemized budget “work product” — but an itemized budget upon which a summary document was based can hardly be considered a “preliminary [draft] of memoranda.” They submitted the summary budget document to the City Council; are they seriously going to argue that their summary is based on nothing more than a draft memo?

In short, I believe the itemized budget is a public document and should be open to public inspection and copying. They haven’t provided any good reason for it not to be, and the fact that they want to keep it under wraps makes me suspicious of them. I have to wonder, what are they trying to hide?

Peoria Civic Center

It’s very clear, HRA taxes are here to stay

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Peoria Civic Center logoAltogether now: “…Not for a year, but forever and a day….” How do I know?

Though the latest phase of revitalization is nearly finished, the overall effort isn’t complete. [Former board chairwoman Rebekah] Bourland said she envisions replacing the building’s glass arcades and adding a more user-friendly entrance from Monroe Avenue.

“The Civic Center is a work in progress,” she said. “To really do ourselves justice, we need to be thinking about the next step.”

Of course, they’ll be able to pay for these and other “next step” improvements out of the Civic Center’s profits… er… hmmm… I guess there aren’t any profits, are there?

In time the Rockies may crumble
Gibraltar may tumble
They’re only made of clay
But HRA taxes are here to stay