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.
“And under no circumstances should we give a $9 million fee to a private developer to build a private hotel for his private profit.”
Amen!
and Amen!
Hullinger is right in that we need to level the playing field vis a vis greenfield versus redevelopment. Incentives only go so far.
We need to disincentivate converting farmland into ‘developed’ land. This needs to happen at the state level. To some degree the market is helping right now. Farm commodities continue along a super cycle trend to go up in value, which in turn helps drive up the value of farmland, making it less attractive to developers. More still could be done.
One step would be to stop referring to farmland as ‘undeveloped’. It is far from undeveloped. There is much more too it than simply planting some seeds and watching them grow.
We need to view farmland as a public asset that should only be allowed to convert with a compelling demonstrable need. Like, is there a shortage of housing? Simple market demand is not enough to demonstrate that. There would need to be insufficient vacancies. What that magic percentage number of housing stock that is unoccupied would be, is debatable but it would have to be at a level that discourages new development in favor of redevelopment and density.
Some California communities have tackled their sprawl problems by adding on fees to extend City services to “greenfield” developments. It recoups the cost and is an effective dis-incentive to keep on sprawling.
Mahnko is absolutely right. Until sprawl is controlled and how we label certain assets the inner cities will die.
Yet I see so many comments in various blogs and PJS complaining about “People Welfare”. It’s not ok to help a family on hard times with $400 a month for rent and food, but ok to give a private developer $9 mlllion dollar fee to build a hotel, which, if successful, will continue to put money in his pocket?
Don’t get me wrong, I do hope the hotel does get built, the Pere renovated, and becomes a successful stimulus to reinvigorate downtown Peoria. I just think Mr. Matthews should have went after more private financing or investors so the city didn’t have to put out as much.
I suspect that much of any proposed profit on the Pere after opening will go to investor’s pockets, not Matthews. Like most developers, I again suspect that he makes much of his money off development fees and his investors get tax write-offs as well as cash flow from the operation. Most developers only own a small piece of the finished product if any at all.
The vast majority of developers are extremely cash poor and leveraged to the hilt. That is why it doesn’t take much of a economic downturn to force them belly up.
“Other people’s money” is generally their creed.
Sadly, Hullinger and the majority of our Leaders have embraced the terribly mistaken belief and approach of, ‘Developers go where they are certain they can develop and get a great return’.
Why have our well-educated and professional Leaders forgotten and/or consistently disregard the fact that an entrepreneur/developer is supposed to be one who manages and assumes the risks of a business or enterprise?
Let’s stop this senseless ‘developer welfare’ and use the economic tools as they were truly intended to be used!
Well, in the case of the Pere, no developer can make it without assistance. In fact, it is probably questionable with assistance. That is just a reality. Unfortunately, the city has the PCC to worry about and a hotel is crucial to it’s success, IMO.
The classic “rock and a hard place”.
District 150 Observer: Really? No developer can make it without assistance? How was the Mark Twain able to make it without assistance?
Mark Twain and Pere are much different properties. You notice the Pere has been deteriorating and for sale for 2 decades with nobody stepping to the plate. Also see the Holiday Inn City Center.
Please, Mark Twain was in a similiar state, until the new owner bought and reinvested profits back into the business, something that is supposed to happen. An old hotel in Bloomington was bought recently (private money) and will be remodeled,(private money), incentives from the city….the council “might” consider a TIF after the remodeling is complete, no guarentees. Was the project scrapped without incentives…um no….We give away our shirts to developers. What is the return on investment. First of all, banks haven’t lined up to finace the project. Banks are in business to make money and will extend a certain amount of risk to gain profit. If larger banks are not interested then that is a great indicator that the project is not going to return $.
PCC does not need the Pere renovation to be successful. What was recommended was a full service hotel. The idea of a sky way, which means that people will be walking the same distance to the hotel as they would by going outside means that distance is not the issue. Pere was pretty much full service, well until the restaurants kept shutting down. Regardless the sale and urgency of the deal developed with tax dollars and without public input was that a full service hotel was a must. What we are getting is a courtyard for the same price. Pay for Caddy, get a pinto (although the pinto has a sunroof).
What is continually being ignored is why are People choosing to stay in East Peoria in the first place. It’s shiny new, perhaps some, but visitors feel safe across the river. They have restaurants and shopping across the river. they have a skyline view across the river. None of the items is slated for change with this project. NONE. Crime is ignore to the point in the most recent budget that consent was set out to lay off 13 MORE police officers. When folks get up soon to give their speeches remember that was federal money. Perhaps thanks to Chief to applying for it, perhaps thanks to our federal representative would be appropriate. the budget was set to allow for additional crime, additional casualities.
Other offers were made to improve hotel room stock, but were denied. All at a lower price. Name branding is not necessarily as important as marketing. Stayed in a historic hotel in Az this summer. not a chain, just a cool place with a lot of history. quite frankly if the debacle of a museum can be sold to the public then staying at the Pere could be also.
I continue to submit that visitors doing any type of research look at what there is do in the community and what is happening. More murders, higher rates of violent crimes are not attractive reasons to stay downtown. Higher taxes for going out are not attractive reasons for going downtown.
CJ, I would agree we misuse incentives. The excuse I keep hearing are “other cities are doing it.” and “if we don’t East Peoria will”. There will be other deals and other opportunties, you create or wait for a good one.
Regarding other expenditures, such as the museum and the infrastructure on Washington street. I keep hearing..from leaders….CAT invested $53 million..should we turn that away? and We have $10 million from the state (ummmmm BROKE)to put towards it, how can we turn this deal away.
Easy, Every few months I get an incentive invite for a new vehicle. most recent one was for even $2000 more than the last one I received. this deal is to be used upon my trade in of my current car and on top of my best deal. It is a fantastic deal. I would be silly to turn it down, right? except I really can’t and don’t want to swing a car payment, increased insurance on the new car,etc. So in the long run, it is less expensive to make due what I have last until I can afford something that I want. Our leadership doesn’t think that way and we keep spending money we simply don’t have (all levels of gov’t). The desire is so strong to continue to spend money on what “THEY” want vers what we need, that the natural gas tax is born, essential services are decreased. On a state level, let’s borrow money we can’t possibly pay back and also jack up fees, taxes and the income tax by 2/3.
This is the preamble to my dissertion. Grab a brewski and do some reading. We must be vetting each and every candidate for skills, talents, energy, consistency, reliability, accountability to make the best choices for these five seats.
Additionally what is the actual return on our investment? Is the hotel or the museum going to create family wage jobs? Maybe a couple of management postions in the hotel. So we’ll be generous and say 4. Are they creating other family wage business opportunities. most likely not. food service delivery, most likely won’t be hiring an additional truck driver to drop off supplies and would they live in Peoria to boot? shop in Peoria. No. Sale taxes, maybe some from gift shops, some from retaurants. HRA taxes. some, but that is the golden fleece and money goes to civic center budget in the red. Some other restaurants. Maybe if there is something touristy, but if crime isn’t addressed, then back in the car and off to somewhere safe to shop and eat. so, not a lot for a few hundred million. Construction jobs are short term and are subsidized by unemployment for off times. So perhaps a small burst in tax money from that.
“no developer can make it without assistance. ”
You are amazing. Sing praises to entrepreneurship and capitalism, and then apologize for it and say we have to subsidize it…
How can anyone NOT see the hypocrisy and irony?
A lot of good points.
Good incentives for a business are usually low property and other taxes, good city services, and low crime. Creating Enterprise Zones rarely does the job because most business see enterprise zone as “crime ridden”. I know I would ask myself, “why is the city giving me all this help to build here?”. The other case would be the enterprise zone is pushed through by helping a political supporter (like fire fly) for an area they want already and that certainly was never meant to really stimulate.
Did anyone know that East Peoria pulled a large chunk of funding from CVB? They have been a longtime member of the Peoria Convention and Visitors Bureau, but word is they are getting ready to go it alone. We the tax payer are putting out the risk, and more than likely, East Peoria, with its well developed family friendly side of the river, will reap the benefits of visitors, business and leisure, coming to town. In fact, they are building a full service holiday inn in east peoria this year. The downtown hotel is a must because of the councils poor choices to do the civic center expansion, but they need to create incentives for people to stay in Peoria vs East Peoria when visiting.
Even though we need the hotel because of the Civic foolery, we should take a look at the occupancy figures coming out of Bloomington, IL where the city had given John Q Hammonds (same owner as the EP embassy) millions to build the full service Marriott. It is not driving more conventions and travel to the area. Instead, the city is facing one of the worst years they have ever had and a over supply of hotel rooms is hurting everyone.
Greenspace development that draws tourism to Peoria is just as good as downtown development. It still creates tax dollars and keeps our economically blood sucking neighbors, East Peoria, a little less out of the mix.
The only travel East Peoria generates is the east side center, and as they add more hotel rooms, Peoria will not see any of the rooms nights from teams traveling. Peoria would do well to subsidize tournaments and develop a world class sports facility in greenspace. We have the hotels already, and parents love to live vicariously through their athletic children.
Also, a casino, which we shunned, is source of funds for East Peoria’s private subsidized development. If we brought in a nice casino downtown, it would do more for those hotels and the civic center and museum combined.
I hope that was not too far from the topic.
I stayed for an extended period of time last summer at the Embassy Suites. They were always busy . . . many, many conferences, wedding groups, business travelers, and then the softball players came . . . it was amazing. I would never have believed so much would be going on in July and August.
Also, police seemed to patrol the area at all times of the day and night.
Charlie, you know you took one part of D150’s sentence out of context (without the qualifier “In the case of the Pere”) and made an overreaching generalized statement about capitalism and subsidies. You can make a better argument than that.
Thanks Jon, that was taken totally out of context by Charlie. I have never said that I would have approved the tax money for the Pere. I just said it is a difficult property that nobody has had any serious interest in for decades.
I do think the PCC needs better hotel rooms downtown to thrive and an attached hotel is very important to groups.
I also think the Pere’s 270+ full service rooms and the Courtyard 117 limited service rooms are the right mix. Courtyard is a very popular hotel with business people and has a different price point for travelors.
I understand the perception that crime is more of a problem in Peoria than E Peoria.
Some here are taking what I said to lengths I never intended.
Let me add that the Embassy Suites is a very nice hotel. I think part of its success (note-part) is that it is nicer than anything in downtown Peoria. There is no doubt in my mind that a renovated Pere and new Courtyard will attract many of those visitors back to downtown Peoria, especially many of the Cat guests.
Many forget about Cat–they badly want a first class destination hotel downtown—within walking distance of headquarters AND the new visitor’s center. Cat WILL support a renovated Pere.
perception of crime? the gunshots once again in my neighborhood were very much real. and I live on a main drag that visitors will utilize to get to other parts of town. A convention of doctors had their cars vandalized in the parking deck of the Pere. Will that group meet here again, I would guess not and they will tell all their friends not to come here either. If CAT will support a renovated Pere then certainly banks would think that funding the project would be worth risk if a fortune 50 company was backing it. They did not fund the project. Tax payers are dumping huge amounts into a private project with a low return rate. So the CAT factor didn’t help. This is a privately made deal with the powers that be, behind closed doors, and funding with tax dollars.
If the concern is an attached hotel, then hotel should have been built on the lot adjacent to the civic center, which was one of the proposals. It was not. therefore I challange the need for an attatched hotel.
well, Mackinaw is “safer” than E Peoria. Elmwood may be “safer” than Mackinaw. People use a great number of factors in deciding where to stay–cost, safety, location, hotel brand (which is huge by the way), hotel condition, access to public transportation, parking, hotel offerings, nearby attractions, attached to convention center, etc)
Again, I never said I would have supported the $37 million subsidy. Just making some observations on the Pere, PCC and Embassy Suites and some issues involved.
I stand behind what I have written. We will just have to disagree on those things.
More than one person has taken what I said and run with it way further than they should have.
Paul is a wild-man on fire………..!
District 150,
“Cat WILL support a renovated Pere.”
Does that mean CAT will support the Pere with ‘bucks’, or just throw a lot of business their way?
Cat will throw a lot of business their way–Cat business is crucial to a downtown hotel. They supported the old Pere with bucks including renovating a floor, called the Cat floor. I suspect they may support the new Pere with bucks also, but, of course, I am not privy to any of that.
If you limit the scope of the disucssion to a few points and limit those points to a couple of comments, I could sell you a spot in hell as a sunny, warm, dry vacation spot.
brand name is not the end all beat factor either. the Pere was a Hilton as one point. price, amenities, attractions in surrounding area and those are all trumped if you think you will be mugged or shot on the way out of the hotel
Paul, hyperbole galore!
I never said “brand name is the end all”. You are setting up a strawman and then knocking it down.
And yes I can make limited comments. I didn’t know that wasn’t allowed here.
I missed one item that is crucial these days in hotel selection—the particular “points” system for the hotel chain. The Marriott points system is easily the most popular of all the chains. Many, many people base their hospitality decisions on the point program that they belong to. That is just reality.
Again, I have never said that I think the downtown hotel project will be successful or not. I have never seen those projections nor results from the current Pere.
I just think the project has some good points and I understand the city’s viewpoint and why they are doing what they are doing. I think it is not black and white, but gray. Too many people here do not even try to see both sides of an issue.
I have seen both sides of the arguement. If there is a need for a hotel, then build it, but not with tax dollars. The idea which was sold that we must have is a full service hotel that is attached to the civic center and that with such due speed that there could not be any public discussion about the use of the tax dollars before the deal is made. What we are getting is a renovated hotel and a courtyard. Court yard is not a full service hotel. In order to “attach” the hotel to the civic center, a skyway has to be designed, which is not really any more convienent than walking on the street, but that it might be a bit warmer 3 months of the year. What would have made sense for this hotel that again, “WE NEED” would have been to build a full service hotel on the civic center lot, there is space, and especially given the skyline a taller hotel would match anyway. It should have been done without the taxpayer money. This is private enterprise. It Marriot wishes to fund the building of a hotel, then let them. No reason we should pay for it. What was sold, isn’t what was bought. Not to open the museum debates, but I could support a museum and intially did with the design and promises of an IMAX, the interesting planaterium, etc. I didn’t feel it would be a money maker as it is a museum, it has become something else entirely. Again, what was sold, isn’t what was bought. There was significant work to spin these projects to the public, to use maximum amounts of public monies. Neither project could get the private funds. Free market would dictate that the projects that can’t be funded don’t move forward. Hence I don’t have a Swiss Chalet…funding…
crime rates have escalated. A full police force was not funded in the budget, therefore has not been a priority. The hotel and museum were a priority therefore funding was obtained. There arguements you have made were made presented by the councilman behind the hotel project and by the developers in some cases word for word. Again, points or not, name brand or not, if visitors feel safety is a factor, they will pack up their tourist dollars and head elsewhere.
Ummmm… Mr. Hullinger, nice reflections. Do any of your former coworkers agree with you.
Where were you during those 28 years of service while the city has been quietly morphing into another East St. Louis?
Excellent posts by you and many of your readers, CJ
Government incentives for business development is always controversial. Let me respond to some of your points.
Many older cities and regions around the country use Enterprise Zones. There are large number of incentives bundled into the Zones to try to incent development or redevelopment in the zones.
The original intent of the zones was to try to attract redevelopment back into poor areas. When you look at the Peoria map you see that a large part of the zone is in the poor south end of the city.
But around the State enterprise zones were quickly expanded to include industrial areas and some commercial areas that are not blighted, as you can see from the Peoria map. This was an effort to compete with other areas and States for economic development.
The incentives in the Enterprise Zone are not that great. The two big incentives are sales tax for building material for new or improved facilities. The sales tax is mostly paid to the State of Illinois, the City and a little to the County. So these three governments are willing to forgo the sales tax on building material for a new facility that will produce jobs and property tax. Pretty good trade off, I would say. And so would most people, I think, especially with our high unemployment.
The other large incentive is 5 years of property tax abatement for industrial development – not commercial. And School District 150 and the Dunlap School District do not participate – each government decides whether it wants to participate or not. So the other governments did decide to participate – and I think for pretty logical reasons. They give up 5 years of the new property tax for new industrial developments that generate jobs and permanent tax base.
Pretty good deal, I would say.
Now lets consider a typical meeting with developers that occur frequently (we hope). A developer approaches the EDC or City and says we have a company that wants to open a facility in the Midwest. We are looking at Indiana, Illinois, and Iowa. We will invest $5,000,000 and will create 60 jobs. Your area looks good. We are checking out incentives.
We know that they will get a good incentive package from communities in the other states and around Illinois.
We discuss our incentive package and tell them we will work with them and the State on State incentives. We sell our town as hard as we can.
The developer will typically sum up all his findings on a spread sheet, and figure out the best place to build.
So we are in competition with numerous other communities. You can decide to compete or not.
I say compete.
Thanks for the response, Craig. So, Double-A’s Pizza — they were checking out incentive packages in Iowa and Indiana, and Peoria’s ED department successfully lured them to Illinois?
Craig said “The other large incentive is 5 years of property tax abatement for industrial development – not commercial.”
Is Double A’s pizza an industrial or commercial entity?
“The incentives in the Enterprise Zone are not that great.”
So why bother, then?
Well, we would not want to lose Double A Pizza to the County, would we? Sales tax and property tax.
Double A Pizza is commercial and therefor did not get property tax abatement. Just the one time sales tax abatement for building material.
When you are talking to a commercial or industrial prospect, it is nice to have some kind on incentive. Other towns and States have incentives. It is nice to have some here.
Craig — Nice for whom? It certainly was nice for Double-A Pizza. They got an $80,000 business development loan from the City at a low interest rate to move to a parcel outside the City — then the Econ. Dev. Dept. comes back four months later saying we need to also give them Enterprise Zone status with sales tax abatement (worth $400,000) to keep them in the City. So now all the other pizza joints in Peoria are subsidizing Double-A’s (and Peoria’s) expansion. It is nice to have some kind of incentive, if you’re on the receiving end of it. I think they could have been just as successful without taxpayer assistance. This was a greenfield development in a high-growth area, not an in-fill development in a depressed area where incentives may have been warranted.
“It is nice to have some kind of incentive, if you’re on the receiving end of it”
I hope Craig is not one of those that complain about ‘entitlements’ for people and then goes on about how important it is to give this “incentives” to businesses.
CJ Wrote: “Craig — Nice for whom? It certainly was nice for Double-A Pizza. They got an $80,000 business development loan from the City at a low interest rate to move to a parcel outside the City — then the Econ. Dev. Dept. comes back four months later saying we need to also give them Enterprise Zone status with sales tax abatement (worth $400,000) to keep them in the City. So now all the other pizza joints in Peoria are subsidizing Double-A’s (and Peoria’s) expansion.”
The small shopping center was in the County and all that business would be in the County, with the City not receiving any property tax, sales tax, or utility tax. So for the price of a one time sales tax abatement on building material plus a low interest loan to the small business the city got permanent property tax, real estate tax, and utility tax. And we got more jobs in Peoria and convenience for the people who live nearby the shopping center.
The sales tax abatement is for material sold anywhere in the State of Illinois. The only loss to the city was for the material sold in the City.
Pretty obvious this was a good deal to the city – to any reasonable person, I think.
“Pretty obvious this was a good deal to the city – to any reasonable person, I think.”
Sure – in the short term. Not so great in the long term. Has the City given Double A’s an unfair advantage in the local pizza market? What will you give Firehouse if/when they want to do something similar? How about a floral store or some other business? What will you do for the next Firefly?
Yea, I get it. If Peoria doesn’t do something, then East Peoria will. Or Bloomington. Or, you name it.
Is it all just a race to the bottom?
CJ had a post about incentives and game theory. I think the Prisoner’s Dilemma game explains this situation well.
“In the Prisoner’s Dilemma, each player pursuing his own self-interest leads both players to be worse off than had they not pursued their own self-interests” and it “demonstrates why two (cities) might not cooperate even if it is in both their best interests to do so.”
Craig — That land was completely surrounded by the City except for the UP rail line. The City could have annexed it by ordinance and still captured the revenue of which you speak without giving any incentives at all.
But even if that hadn’t been the case, I still think it was a bad deal for the City because we don’t need to be incentivizing greenfield development (at least, any more than we already are by extending roads, services, and infrastructure out there). Developers are doing just fine out on the fringes of town without additional taxpayer help. We need to be incentivizing infill development because our city is hollowing out. If we spend our incentives where they’re not needed, they become ineffective where we do need them.
I agree with want Jon said, as well.
Most cities including Peoria seldom force annex a property. Tends to make people very angry. Far better to use the carrot, not the stick.
Many people make the argument that the city should not have annexed so far to the north. I disagree. The city of Harvey and Chicago Heights did not aggressively, and they ended up being majority poor. Not a good thing. Joliet, Aurora, and Peoria aggressively annexed and have managed to get solid middle class neighborhoods.
That new development was going to go somewhere. It wouldmhave gone to other small towns around Peoria. And that would have been bad for the City and region.
All these decisions took place before I came to Peoria 5.5 years ago. And I live in the Heart of Peoria. I think the city made the correct decision to expand north.
Craig, the carrots have a cost – and too many turns your skin yellow-orange. We got a lot of donkeys who are wondering why they didn’t get any. I guess they could up and leave the city for a greenfield development and get their incentives, too. Kinda cheapens the whole notion of incentives. Incentives for that result?
With the economy as bad as it is today I don’t see how anyone can argue with relatively small incentives that create jobs. And it appears likely that we are heading for a double dip recession.
Many people are very angry with government for this situation. I am also. But that is not a very good reason to halt efforts to attract businesses and jobs.
And businesses are smart and go to the community where they can get incentives.
Craig,
what jobs are you creating? A hot dog stand is going to pay employees $45,000 a year so that they can afford to buy a home and invest in the community? The vast majority of the jobs “created” are low paying and do not provide benefits. How does that help our community in the long run? What type of tax bases does it support. Earlier you mentioned that we needed to expand to capture the middle class..but those tax dollars are not sustaining a middle class they are increasing our impoverished one. How many family wage jobs come with the museum…I guess 1. the proposed hotel..maybe 2. Are you thinking that maids are going to earn enough to feed their family? The Warehouse district. Millions to make developers rich, but again, what types of jobs will it create in the long term. It coincides well with Dist 150 turning out kids that can’t read or do basic math. Kids coming from parents who can only add up the LINK benefits. It’s a bad strategy.
Manufacturing jobs aren’t sexy so the local media devotes passing coverage. Examples:
Yinlun USA, Inc. – Announced in March that 100 mostly engineering jobs will be created at new Morton HQ over next 2-3 years.
Solazyme – Announced in March that up to 50 jobs will be created manufacturing algal oils at vacant PMP Fermentation plant in Peoria.
Cook Medical – Announced in May that teflon manufacturing facility will be built next to existing campus in Canton. Will create 30 jobs.
Excel Foundry & Machine – Announced in May that 30 new positions will be added after expansion at Pekin facility; hints further expansion is planned.
Aventine Renewable Energy – Perhaps job adds in recent PJS Sunday editions, is planning to start operations at ethanol plant located south of Canton (probably 30 jobs).
I forgot to add Wheelworks North LLC in Pekin. I believe at least 35 jobs, and maybe up to 50 will be created as that facility gears up production.
what jobs are you creating? A hot dog stand is going to pay employees $45,000 a year so that they can afford to buy a home and invest in the community? The vast majority of the jobs “created” are low paying and do not provide benefits. How does that help our community in the long run?
Craig replies:
CJ, we will have to agree to disagree on this one. When you have high unemployment all jobs are welcome. And retail jobs are often entry level jobs for young people to make a few bucks and learn how to function in the work place. Try telling some of the unemployed that we don’t want those jobs.
For a low one time incentive the City of Peoria will receive permanent and ongoing property tax, sales tax, utility tax, convenient shopping for the neighborhood, and jobs.
I would take that deal any time any where.
I’m not at all comfortable with that strategy, Mr. Hullinger. Focusing on retail development alone seems futile, as a static population will only buy so much. The recent City Council action on Coney’s will probably result in hurting both Emo’s and Coney’s, while the City gives Emo’s, a longtime Peoria business, a figurative kick in the head by backing a competitor. I think focusing on bringing in enterprises that will provide head-of-household wages and will bring more population in to the area are a better bet. A by-product of more people with money to spend will bring in retail and other services anyway. While there is an emphasis on high tech and medical, I’d also argue that it might be good to go after more manufacturing concerns, as well as heritage industries like brewing and distilling. Peoria has so much potential; I think we need to be better in our economic development efforts. Backing hot dog stands doesn’t seem like a good use of public funds.
Conrad Stinnet wrote; I’d also argue that it might be good to go after more manufacturing concerns, as well as heritage industries like brewing and distilling
The brewing industry has experienced much consolidation in recent years, but according to this article, the Kentucky bourbon industry is experiencing growth not seen since before Prohibition: http://www.newsmax.com/US/BourbonBoom/2011/06/21/id/400742
Export sales seem to be the main driver, and expansion markets most certainly exist for other liquors, so perhaps Peoria should prepare for growth (all three local ethanol companies – ADM, Aventine and ICP – already manufacture and ship bulk alcoholic beverages) and new players? We were, after all the “Whiskey Capital of the World” from 1880 to 1917 because of the combination of local grain, water, coal and railroads. And liquor exports could be handled via “Container-On-Barge.”
Our city and region like all other cities and regions needs all types of employment. We want well paid jobs for all of our people. And most places including Peoria have plenty of jobs for highly educated people such as engineers and medical practioners.
All jobs are good jobs. My blog below has a few articles where I explain how I think we should pursue businesses.
http://planningnews.blogspot.com/2011/08/this-is-article-we-are-writing-about.html
http://planningnews.blogspot.com/2011/08/next-fostering-small-business-growth.html
http://cityplanningnews.com
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