Did you know that your property taxes indirectly support Lakeview Museum? Karrie Alms does. She’s a community activist and frequent commenter here at the Peoria Chronicle. While doing her usual detailed research, she came across a property tax levy fund titled “Fund 123 MUSEUM PEORIA PARK.” That caught her eye, so she asked Park Board President Tim Cassidy about it. He explained:
Presently Lakeview museum owns and operates museum operations. The PPD [Peoria Park District] owns the land and building and allows Lakeview to use it under an agreement that is now several decades old.
Mr. Cassidy also confirmed that Lakeview does not pay rent for its use of the building, and “the amount of [the] museum fund levy going to Lakeview museum facility is $189,234 per the 2009 budget.” Not having to pay rent or upkeep on the building and grounds surely helps Lakeview’s bottom line and also explains why they didn’t include funds for capital improvement in their pro forma for the proposed downtown museum.
So, what happens if/when the museum moves downtown? As I reported in a previous post (“Is Peoria’s History Getting a Back Seat?” July 13, 2007) after talking to museum officials, “When the new museum opens, Lakeview is planning to hang on to its building at Lake and University to be used for storage because there’s not going to be enough storage space at the new museum. In particular, there’s not very much space planned in the new museum for special, climate-controlled storage of fragile pieces.” However, it doesn’t appear that the Park District has agreed to let the museum continue to use the building. Cassidy told Alms:
If Lakeview museum left the site to go downtown [its] continued [use] of present site would be subject to further agreement based on PPD needs for the facility. […] PPD has no final plans for Lakeview facility use if museum leaves. It remains open for discussion, although one use considered is a senior recreation/leisure facility for programming needs.
Cassidy also said that continued use of the Lakeview building “has never been approved by PPD. In fact specific request has not been made for PPD to formally act.”
If the new museum is unable to use the current Lakeview building for storage, they will have to find storage elsewhere. Without a rent-free (i.e., taxpayer-subsidized) facility to use, cost of that storage would impact the museum’s profitability. The Museum Collaboration Group can’t just assume they will be able to continue using that building (rent-free, at that) when their lease expires in 2012. Off-site, specialized storage costs should be figured into their pro forma.
The Park District/Lakeview Museum arrangement also raises another question. In the ground lease the Museum Collaboration Group signed with the City of Peoria for the old Sears block, it has this interesting provision:
11.2 Permitted Assignees. Notwithstanding anything in this Lease to the contrary, Tenant may assign Tenant’s interest in the Lease as follows:
11.2.1 Peoria Park District. Provided the District (“Peoria Park District”) agrees, the Tenant may assign Tenant’s leasehold interest in this Lease to the Peoria Park District, subject to the following: (i) Tenant shall not be relieved of any of its obligations under this Lease and Redevelopment Agreement; (ii) the Peoria Park District shall be obligated to observe the terms and conditions of the Lease applicable to Tenant; provided, however, that the Peoria Park District shall have no personal liability to Landlord, Tenant or any third parties with respect to the Lease, the Redevelopment Agreement or the Real Property, with such liability limited strictly to Tenant’s leasehold interest in the Lease; and (iii) the Landlord shall be entitled to enforce the provisions of the Lease and the Redevelopment Agreement directly against the Tenant, who shall continue to have available to it all the rights and obligations of the Tenant under this Lease and Redevelopment Agreement notwithstanding such assignment.
The “Tenant” would be the Peoria Riverfront Museum, and the “obligations under this lease” would include repair, maintenance, alterations, and additions to the building and grounds. If the museum were to assign its interest in the lease to the Park District, then the Park District could use its funds — i.e., Peoria property taxes — to maintain the building and grounds. Here you can check about student loan interest deduction with guide of an experienced firm like taxfyle. That would certainly be more than taxpayers bargained for if they approve the sales tax referendum on April’s ballot.
No deal has been made to assign the lease to the Park District at this time according to Cassidy. But the legal language is in place and could be acted upon if the sales tax referendum is approved and construction of the facility is allowed to proceed. It’s something to think about when you go to the polls on April 7.
I will be voting yes.
The benefits far outweigh the negative.
peoriafan: What does the benefits vs. the negative list look like from your vantage point? Thanks.
Peoriafan,
I always believed everyone was entitled to their own opinion…….., but now…….?
An infinite number of studies on museums of comparable size, population, etc show that museums have not, and will never contribute to an areas economic growth, at least not significantly. These studies are based on hard data collected over the years.
PRM has what?!?!? PROJECTIONS based on questionable data/stats [which, again, has changed repeatedly over time]?!?!?!?
How do YOU REALLY stand to gain Peoriafan? Is your name going up on one of the walls?
http://www.buildtheblock.org/
Did anyone see this blurb @ pjstars website?
http://www.pjstar.com/homepage/x1596621480/Planned-museum-a-14-1-investment-return-economists-say
http://www.polldaddy.com/poll.aspx?p=1319598
Sorry Bradley econ professors, when the chairman of the “Friends of Build the Block” committee is also the director of the Bradley Public Service Institute nothing that comes out of Bradley reads as an independent analysis.
I attended the union press conference today. Professor Scott from Bradley addressed the 60 present by stating “Basic data provided by the museum comittee……
Enough said?
Merle,
Once again I tip my hat to you.
I may even let you buy me a coffee one day.
Bean Counter,
Heard a loud roar from BU students who found out their CAT [paid] internships were given the heave-ho! Like a great many people around here, they are wondering where the millions for visitors center/museum is coming from.
These so-called professors have disgraced themselves and the University. Nobody listening to these clowns (there is another word I chose not to use), would enroll in the B.U. accounting program.
For some reason the comment interface for the latest J Star museum article is down. I can access every other article but the one about the BU guys……
mouse’s comment give insight. if those so opposed to the museum don’t understand the difference between accountants and economists…
still voting yes.
Curiously the comments are turned off on the recent museum article on the PJS website.
14 to 1 returns? Slam dunk? If this is such a GREAT deal, then surely this project should have NO problem getting FULL private funding. The economy is in the tank, so surely there are a good many investors looking for such a sure fire investment. Right? If this museum is so damn good why is it not fully funded privately?
PJS recent poll on the subject:
http://www.polldaddy.com/poll.aspx?p=1341055
54% in favor?….
Mahkno,
I know. Readers were able to post comments for a couple hours after yesterdays museum article hit. After that…….nothing. Even today, it is the ONLY article on J Star web site that can’t be accessed.
At least Merle the Pearl was allowed to add his 2 cents.
Poll: Can be voted by anyone, including those who live outside of Peoria County. Additionally, just remember the potential use survey conducted for the Riverplex formerly known as the RecPlex. People / zip code areas surveyed, many were in Tazewell County. Voting on April 7th will be the key. So tell a friend to Just VOTE NO.
$570 million in 20 years???? That’s what Bradley economists are suggesting the museum will bring in “economic growth”…
$28.5 million a year… $78,082 a day… every day for 20 years…
http://www.pjstar.com/news/x1596621480/Planned-museum-a-14-1-investment-return-economists-say
“Lewer said that the project would create 1,100 jobs during the 25-month construction phase, stimulate the local economy and have a high-impact return – $572 million over 20 years – with low burden public funding – $40 million raised through a quarter-of-a-cent sales tax increase.”
“Scott and Lewer contend that the actual dollars of economic impact the project would generate is broken down into three components – money spent and business development during construction of the Block ($210 million), operation of the two facilities through the years ($205 million) and the amount of money visitors will spend at the museum and the visitor’s center over 18 years ($160 million).”
WOAH!!! Talk about cooking the books! Let’s just make up numbers.
The Museum will bring in $365 milion over 20 years just by itself. Let’s see…
$18.5 million per year…
$50,000 each and every day of the year for 20 years
$2,833.33 each and every hour (if open 24 hours) of each and every day (if open 365 days) of each and every year for 20 years.
No wonder our economy is in the toilet with these kind of wizards.
YEA Merle!
“I’m contending that these projections are based on things that wouldn’t hold water,” Widmer said. “They’re projecting that the Block will do better than just about any comparable museum anywhere in the United States. I don’t believe the numbers, and none of my friends believe the numbers. They’re not even close.”
with low burden public funding – $40 million …. oops — that would approximately be a $61.88M burden for public funding … oops …. someone forgot the interest over 20 years.
kcdad: How would the additional $21.88M in low burden INTEREST for public funding adjust your ‘per year and per day’ figures?
Oh, how does one separate the PRM’s numbers of projected success from the Cat Visitor’s numbers of projected success? Apples and oranges mixed together.
Show us the math —- let’s see your work to get full credit for your answers just like on a school math test.
A= what we guess it will cost
B= what we guess we can raise to pay for it
C= what we guess is the revenue it will bring in
D= what we guess the economic impact on the community will be
E= OUR PROMISE OF SUCCESS
A + B + C + D = E
It’s simple arithmetic… Geesh!
cyni·cal (sin?i k?l)
adjective
believing that people are motivated in all their actions only by selfishness; denying the sincerity of people’s motives and actions, or the value of living
sarcastic, sneering, etc.
Cynic
peoriafan is right, kcdad. Remember Hanlon’s Razor: “Never attribute to malice that which can be adequately explained by stupidity.”
(That was a joke, peoriafan — don’t take it personally.)
🙂
Capitalism is selfishness… ever read Ayn Rand?
I do NOT know why you guys need to make this SO difficult?!?!
Taxpayers can expect a 14-1 return on their investment……!
What ever that means, its sounds good to me!!!!!!
Who does the 14-1 return go to? And is that over a 20 yr. period of investment?These economists, obviously hired by the Build the Museum group, admit their projections are just that, projections based upon attendance mainly, and other factors which are also projections. Once again, Peoria owns the most valuable piece of land in the area, why are we letting it go for something as tenous as this! But go it will, as this referendum is rigged to succeed by the arts people and the wealthy. It’s not that the tax oneach of us is that much, it’s just that it is a bad idea for all of us being rammed down our throats by a relatively small group of people.
Another yes vote…in fact, my house we will represent 3 yes votes.
In very simple terms, the money that has been committed will NOT go
somewhere else in the community. It will just go away. The referendum
represents such a small amount of money taxed on entertainment dollars spent…not on food, or medicine or even a car purchase. It’s seems so easy to
me. In these hard economic times, wouldn’t it be nice to bring in more jobs to the downtown area and bring in new venues that will enhance the appeal of our town to visitors and/or potential new residents to support our current businesses. How about using positive energy to build a better Peoria.
Hope,
I too want some positive energy. It can start with building something that complies with the Heart of Peoria plan, that is New Urbanist in design, whose design focuses on form and not function. Sadly I think Peoria is going to drop the ball on this one and leave the public holding the bill.
karrie,
When someone asks, how much do you tell them you paid for your house? do you quote the sale price, or the mortgage price, including interest.
If your argument is this is a 62 million dollar building, then shouldn’t it also hold that property taxes should be levied against the value of a mortgage and not the value of the house?
So, in essence, what you’re arguing for is a big spike in property tax bills.
The money will just “go away”? What does that mean?
Where do think it will go when it get flushed down the PRM toilet? It will go into the hands a very few people who will get very rich from it and you will see nothing but an IMAX theater out of it. (Are they going to put an IMAX in there?)
KCdad,
The money that is pledged towards this project will simply not be collected.
Hope,
One thing you, and a few others out there should keep in mind is that most people who post here with a NO VOTE on the museum, are not entirely against the idea of a museum.
This museum project [PRM] has been a bust since the beginning. Raising taxes [again] is just one of countless problems the ‘public’ has had with this particular project. Funding has been a major problem. One campaign after another failed to gain public support and/or the necessary funding. Why?
People ‘outside’ the immediate PRM group have asked countless questions, developed many interesting ideas, and offered up a great many suggestions. These people have been systematically ignored. Why?
I have always been an advocate [as has many others] of renovating the current Lakeview – expand, re-organize, re-design, etc….
Renovate an existing building downtown. There are any number of historically significant buildings downtown that could be transformed into a museum at a fraction of the cost, and still leave the Sears block open for some REAL economic development.
Museums are wonderful. If there was anyone involved with the PRM group who knew anything about museums, maybe this project would have gone forward. As it is, it has all come down to a ‘YES’ or ‘NO’ vote. Not very promising. The current economic problem will heal, but it will likely take years.
The latest CAT layoffs are INDEFINITE! Do you really think a ‘museum’ right in the middle of downtown Peoria is going to attract big business and cause economic growth? This project will not improve the standard of living for anyone but the 12 full-time Lakeview employees who will be moving in.
I emailed PJStar and asked why the comments were turned off for this museum story. Here’s the response I was sent:
“I’ve already checked, because you weren’t the first one to ask today. Our Web guy said the discussion had devolved rather quickly into name-calling rants and blatantly false statements of fact. The museum people called – I think I heard him right — to point out the factual errors and asked that certain comments that were provably false be removed. But instead of deleting certain individuals, the Web guy just shut it down. He doesn’t have time to closely monitor one story all day long – he has other things to do — so he made the judgment call.
That’s the best answer I have for you.
Hope that explains it.”
Is that disturbing to anyone but me? The “museum people” called and the end result is the public comment section is shut down?
Wow.
I’m in with a yes vote as is my wife.
I personally know both presenters from Bradley. Robert Scott is top of his field and his research, findings, conclusions and recommendations should be taken seriously. To say that their research was in any way bought or bias is simply not true and actually insulting to Mr. Scott and his collegues.
Why is it so hard for the majority of posters to find good with progress in Peoria? I will probably not come back here as
the negative vibe is not constructive or even entertaining.
Don’t shoot the messengers, Joe.
“the negative vibe is not constructive or even entertaining.”
Joe, maybe you should read some past postings.
I’ve yet to find a more well-researched blog on happenings in the city of Peoria. But then again, there are some criticisms levied so it probably wouldn’t interest you.
Just curious, would you say that One Technology Plaza, PeoriaNext and the downtown ballpark are some examples of what you would categorize as “progress in Peoria”?
Don’t forget to include the Gateway Building.
Joe,
If you are so familiar with the professors in mention, just whose data did they use to develop there outlandish ideas about this museum?
How about if we take their ‘data’ and do an independent study through a university not linked so closely to CAT?
And really Joe, this project has been in the works for years, and only now these two BU econs come forward? Sounds like PRM getting desperate.
MAZR,
Now….can I please yell conspiracy!!!
This is getting out of control. We are worrying about name calling, etc, and the PRM and J Star are getting away with censorship!?
That alone would warrant a NO VOTE.! Nothing like leaving the Arts and Sciences in the hands of ________________________ [fill in the blank].
New Voice:
“These people have been systematically ignored. Why?”
Do you really need to ask? Can you not imagine how fatiguing it is to be brow beat encounter after encounter with “experts” voicing their opinion and flinging their disgust to and fro?
mazr,
it’s only disturbing to you.
Glad I could help clear both points up. Seriously, lighten up. If you folks really want to be heard on new urbanism, than make that case. if you want to be heard on the weakness of projections, then make that case. Throwing spaghetti against the wall to see what sticks only makes a mess. i think some of you have made good points, but gosh a crickey, they’re superficial. Dig man, dig. If access to documents is a problem, and public funding is involved then FOIA. Didn’t someone mention the PPD owning the current museum location…
cheers
ed, for some reason when you comment, I am reminded of the spirit who used to talk to the “grasshopper” in the Kung Fu series.
Gang Boss: I see you like to chew. Then perhaps you should chew… on my fist!
[smashes fist on table]
Po: [voice-over] The warrior said nothing, for his mouth was full.
And then he swallowed…[swallows]
Po: …and then he said: “All right, let’s fight!”
Po: There is no charge for awesomeness… or attractiveness.
SEE WHAT I MEAN???
NV: Agreed, several of us are for museums, just not this museum plan. Still other citizens do not want the museum moved from the current location. I really do not feel that the citizens of Peoria were given ample opportunity to weigh in on what ‘they the people wanted.’ If ‘they the people’ had designed the museum, I think that there would have been public support and the museum quite possibly would have already been built.
ed: No, it is still a public facility being financed with sales tax revenue. Peoria County is acting in a banking / financing function vs. a construction function. Sales tax collected and passed to the PRM as the majority of the bricks and mortar and labor costs to build a public facility, in this case a museum.
The value is said to be approximately $35M (approximately $40M – approximately $5M in issuing/bonding costs). For that $35M plus $5M, taxpayers are really paying approximately $62M.
Value $35M. Cost $62M. Property tax to be collected $0.00 because it is a ‘public facility’ to be owned by the County or perhaps by the PRM or the City or ?. The proposed 4th amendment to the Redevelopment Agreement has not been presented for public review. It may or may not be being negotiated in executive sessions by the County and/or City with PRM and/or CAT. The public does not know at this point.
However, there is really no value to the building unless, someone is willing to give taxpayers money or something else in trade for the building.
Because taxpayers are going into debt, there is a missed opportunity cost of $27M which could be better utilized for something other than interest and issuance costs over twenty years if this project is to be built as planned.
Under the same statute, a 1/4% sales tax could be raised to enhance public safety and/or public transportion? What could $35M – $62M over twenty years be the used for in these areas? How would public safety and/or public transportion uses improve the ‘quality of life’ for the citizens of our county?
***********************************
Say you are voting Yes on the referendum. You would be hoping that the museum would be successful and meet projections. In fact even if you vote No on the referendum, you would be hoping the museum would be successful to avert any potential operating expense shortfalls from being born by taxpayers.
Say worst case scenario, the museum were not successful. What then?
What types of adaptive reuse are possible for a ‘public facility’ built as a museum with a planetarium and an IMAX theater? Any ideas?
******************
ed: Please help me to understand … Is it prudent public policy to raise public money and then hand that money over to a not for profit organization to be responsible for contructing a public facility (even if the county, in this case, were able to have some type of county representative on the construction committee)?
*******************
Thank you for taking the time to ask the questions! 🙂
karrie
you didn’t answer my question.
did you hypothetically buy a $150,000 house, or did you hypothetically buy a $325,000 house, when you consider the cost of a 30-year mortgage on a house with a sale price of $150,000 at 6%?
ed:
I hypothetically purchased a $150,000 house and had to pay $325,000 because I was willing to go into debt to purchase the home. I did not get any economic value for the $175,000 in interest paid.
If a house is valued at $150,000 and I pay $150,000 in cash, then the value and the cost are the same. If a house is valued at $150,000 and I pay $325,000 over a 30-year mortgage at 6%, the value is still $150,000 and the cost is $325,000.
The principle works the same for anything that you purchase on credit or go into debt to purchase. You lose purchasing power because you do not get any value for the interest being paid. The entity holding the debt is the one who gets the value of the interest that you pay.
Look at the current housing situation —- now we have people who hold mortgages who are ‘upside down’. The value of the house is less the the original mortgage (original value) which they have been paying principle and interest. And before the housing crisis, this situation can occur when the real estate market goes down in your area.
Property taxes are based on the assessment. The Fair Market Value is estimated to be at three times the assessed value. When anyone goes to sell their home —- many market factors influence the selling price as well as what an actual buyer would be willing to pay for your home. You sell anything at the price that someone else is willing to give you in return. Therefore, the value of the home is what you ACTUALLY receive for the home.
Your wrote above: So, in essence, what you’re arguing for is a big spike in property tax bills.
NO, I am not arguing for any increase in property taxes. Taxpayer monies need to be spent on BA$IC$.
I hope that I answered your question — if not, then let me know.
Ed,
Brow Beating? As far as I know the PRM has NEVER fielded or sufficiently answered questions from anyone ‘outside’ their circle. If they are ‘demanding’ that taxpayers foot most of the bill for this project, then they had better be ready to “brow beat” ’till the cows come home.
As far as your challenge to Karrie….. lets just say that buying a home is a far better investment than this museum project. O.K., given today’s economy, even home buying is a risky business, but compared to a multi-million dollar, tax funded museum……….?
Diane, you’re in the home selling/buying business…..comments?
LASTLY.
Mazr’s report was 100% accurate. The J Star shut down the comment section of the last museum article. This is shocking! That the Star did this at the behest of the “museum people” is, in my opinion, borderline criminal [time to bust out the Constitution]. This isn’t the first time the PRM has resorted to strong-arm tactics. Apparently this museum project cannot fly on its merits alone…?
ED’s inability to find a problem with any of this has given me a unique insight! I am not sure who ‘Ed’ is exactly, but I am willing to bet he is a newly arrived immigrant, coming from a country where political intimidation is a way of life………
the value of your asset at the end of 30 years is equal to the amount you paid. houses appreciate on a fairly linear scale. the economic value you get is an asset equaling its value at the end of satisfying its cost.
in general.
its disingenuous and cynical for you to write “$40 million …. oops — that would approximately be a $61.88M burden for public funding … oops …. someone forgot the interest over 20 years.”
no one “forgot” about the interest. who doesn’ t know that borrowing equals interest costs? but, there is also an opportunity cost to using cash.
It’s 40 million. going around quoting 62 million confuses the issue and appears to be an attempt to emotionalize the underlying value of the conversation at hand.
Let me ask you this, if who ever puts up the 40 million had that in cash to do so, would it change your opinion? no, because you’re all about new urbanism, right?
there have been plenty of publicly funded private enterprises nation-wide. baseball stadiums (New York, San Francisco, Marion, IL…) convention centers (Rosemont, Tampa, Denver…), etc, etc…i’m too lazy to specifically call out more 🙂
NW,
it’s not that i have an inability to find a problem, it’s that i’m trying to sharpen the arguments. the anti-museum crowd is drowning in red herrings and ad hominem arguments; i simply trying to wade through your logic.
in my country, we say damn the man.
My folks think they will vote yes, because of the IMAX theater… and ONLY because of the IMAX. They will two of the 93,000 visitors (probably during the day, so two of the 44,000 day visitors). They will go once or twice a year.
I would go to see the IMAX… I love that wrap around screen. What is the ongoing cost of having an IMAX theater… is it anything like other theaters, where they run at a loss except for concessions?
Will we be paying for this theater with salt and sugar taxes?
I haven’t weighed in on the Museum project because I am still undecided. On one hand I must admit the concept of having something to do/ somewhere to go in the winter with 2 little kids is extremely appealing. We spent a day (and a night) in Springfield at the Lincoln Presidential Museum and had an awesome time. We are still talking about it to this day. It seems odd that Springfield can somehow have a museum of that quality, yet Peoria does not.
I also appreciate the fact that for once, local government is not looking at the property tax to fund a project. By proposing funding of this project through an increase on sales tax, it is an opportunity to catch “outside” dollars and keep them in Peoria. It seems that so many leach on the city services of Peoria and don’t throw back into the kitty…it’s good to see the reverse in this case.
On the other hand, my brain has a difficult if not impossible task of reconciling building a museum at the same time the very same people that are pushing for the museum project are endorsing closing some of our schools. It is discouraging to see the passion, the expense and effort that is going in to the museum project but yet, once again, our deteriorating school situation is being overlooked and glossed over while our children continue to be shortchanged.