Tag Archives: Wonderful Development

City of Peoria

Wonderful Development still sitting on launching pad

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At the request of come commenters, I’ve been trying to get information on what’s new with the Wonderful Development. As far as I can tell, nothing.

The City Council initially approved (by a 10-1 vote) an agreement in December 2008 with EM Properties to redevelop the Pere Marquette block, upgrading the Pere and building a pedestrian bridge across Fulton St. to the Civic Center. EM Properties couldn’t fulfill that agreement, so they came back in May 2010 requesting a new redevelopment agreement that was significantly different than the first one. The new agreement would have two hotels instead of one (i.e., they would still restore the Pere and make it a four-star Marriott, but would also build a separate Courtyard by Marriott on the block), and fewer rooms overall. They also requested $37 million instead of $39 million in bonds (i.e., taxpayer subsidy). At the time, the City reported on their Council Communication, “EM Properties has made modifications to their project and has now secured all necessary private financing.” The new redevelopment agreement was approved by a 7-4 vote.

The agreement required in section 3.3, “No later than ninety (90) days after the execution of this Agreement, the Redeveloper shall submit to the City the Design Concept Plan for the Project which Design Concept Plan shall contain the Exterior Architectural Appearance of the Project.” And in section 3.5, “No later than August 1, 2010, the Redeveloper shall submit to the City Schematic Drawings developed in connection with the design-build contract for the Project.” So, I asked the City, via a Freedom of Information Act request, when these documents were submitted.

Well, I didn’t find out exactly when they were submitted. All I received was a letter dated September 10, 2010, from the City’s Corporation Counsel Randy Ray to EM Properties, Ltd., that said:

This letter will confirm that your booklet entitled “Downtown Peoria Mariott Hotel Project — Hotel Site Plans” containing drawings dated May 3, 2010, satisfies the requirements of Section 3.5 of the Redevelopment Agreement between the City of Peoria and EM Properties, Ltd. concerning schematic drawings.

We would take this oportunity to remind you that in order to get a building permit for the Project, the Inspections Department will need professionally sealed construction documents.

Thank you for your cooperation in this matter.

In a follow-up phone call to Randy Ray, he stated that the booklet also included the Design Concept Plan and thus satisfied section 3.3 of the redevelopment agreement as well. However, section 3.4 of the agreement states, “The City shall within thirty (30) days from receipt approve or disapprove the Design Concept Plan.” And for the purposes of that section, the “City” means the City Council. Mr. Ray confirmed that the design concept plan has never come before the City Council, and said he will try to get it on the Council’s agenda in November. He thanked me for bringing it to his attention.

Meanwhile, you may recall that EM Properties was trying to get moral obligation financing through the Illinois Finance Authority to “finance a portion of the energy efficient upgrades of the 270-room historic Pere Marquette Hotel that will be renovated and converted to a Marriott and a ‘to be’ constructed 180-room Courtyard.” They had a big public hearing on it in March 2010. The last I heard about it was in May when the Journal Star reported, “EM Properties, the developer of the Marriott Hotel project, needs approval from the Illinois Finance Authority. The authority next meets June 8, and it’s unknown whether a request for a moral obligation bond supporting the hotel will be on the agenda.”

Well, it wasn’t on the agenda in June. In fact, it’s never again appeared on an IFA agenda. However, there are some related matters on the IFA slate. In August 2006, the current owners of the hotel, Pere Marquette Hotel Associates, L.P., entered into a participation loan with the IFA and National City Bank (now PNC). That loan should have been paid off March 31, 2010, but because of the pending sale to EM Properties, there was a request to extend the final maturity date until June 30. However, the sale didn’t close by then, so another extension was approved until September 30. The sale had not closed as of September 30 because a third extension was requested at the October 12 IFA meeting:

This is a third request by PNC Bank, and the Borrower, to extend the final maturity date beyond the originally scheduled March 31, 2010, maturity date in anticipation of the sale of the Hotel Pere` Marquette to EM Properties.

This request will provide an additional 120-day window for Pere` Marquette Hotel Associates, L.P. to close on the sale of the hotel property to EM Properties, LLC. Again, PNC and the other lenders expect this purchase to close by November 30, 2010.

Despite the expectation that the sale will close by the end of November, the extension goes through January 31, 2011.

I’m not sure what all this means, but I have to say these delays are awfully strange for a project that supposedly had “secured all necessary private financing” back in May.

General News

Probably no connection

19 Comments

On 11/17/2009, Gary Matthews of E. M. Properties contributed $10,000 to “Taxpayers for Quinn.” Previously, Matthews had given no more than $500 in a single contribution to any political candidate, most of them Republicans, according to campaign disclosures currently available online.

In a completely unrelated matter, Governor Quinn signed Senate Bill 2534 on June 19, 2010, giving Gary Matthews’ Wonderful Development a 25% income tax credit for qualified renovation costs with a cap of $10 million. The legislation is designed to be a “pilot” program for possible statewide historic tax credits of a similar nature, meaning that, for the time being, Mr. Matthews is the only developer in Illinois who benefits from this tax break.

Business, City of Peoria, State of Illinois

Hotel news recap

58 Comments

There were a couple of hotel-related news items over the weekend:

  • Gov. Quinn approved tax credits for the Wonderful Development. Incidentally, the Journal Star reported the bill number as SB2535, but it’s actually SB2534. The gist of Quinn’s comments was that these tax credits will help provide jobs for union workers, and that will spur economic growth that will actually generate more revenue for the state. “You put more people to work,” Quinn is quoted as saying. “They pay income taxes and other taxes. The key thing is more economic growth.” Koehler chimed in: “People say, ‘Doesn’t that drain money out of the state budget?’ No, it doesn’t. By the time you pay all those jobs and you are creating extra real estate value, the community and state are going to replenish all of that.”

    Are we supposed to believe these guys have suddenly converted to Reaganomics? Wasn’t it Gov. Quinn who proposed raising personal income taxes from 3 to 4.5% last year? And after he changed his proposed new rate to 4%, wasn’t it Dave Koehler who lamented, “From everything I’ve heard around the Capitol, there will not be any appetite for the income tax (increase) before the election. That’s too bad. I don’t agree with it, but it’s the decision I hear.” What? Why raise personal income taxes? Why not just cut corporate income taxes so the state can reap millions and millions of dollars from all the new jobs that would be created as a result? Or does supply-side economics only work on union-worker-built hotel projects at Main and Madison in Peoria?

    The paper also stated:

    The proposal potentially could reduce the project’s costs by $8 million, savings that are split between developer EM Properties and the city of Peoria. The City Council last month voted 7-4 in favor of a $37 million bond to assist in the hotel project. The tax credit could potentially drop that obligation to $33 million.

    Looking at it one way, this is good — the City’s obligation could be 12% or so less than originally planned. On the other hand, it’s actually a net increase of $4 million in taxpayer incentives, if one looks at tax incentives from all sources equally.

  • The Grand Hotel will be converted to a senior living center. Why? The hotel’s sales manager, Stan Marshall, explained: “[T]hose capacity needs [groups who come to Peoria for meetings or sports events] just aren’t frequent enough. There are a lot of holes in the calendar. We need a steady source of revenue.” Given that the Radisson (formerly Jumer’s Castle Lodge) closed last year, and now the City’s third-largest hotel is getting out of the hotel business, one would be tempted to think that there’s overcapacity of hotel rooms in Peoria. But I’m sure downtown hotel proponents will pooh-pooh such an obvious conclusion. After all, the whole rationale behind the Wonderful Development is this belief that Peoria’s hotel problem is undercapacity.
City of Peoria, State of Illinois, Taxes

Come watch the rich get richer

15 Comments

From my inbox, this notification from the City Clerk’s office:

WE HAVE JUST BEEN ADVISED AND YOU ARE HEREBY NOTICED THAT A MAJORITY OF A QUORUM OF THE CITY COUNCIL OF PEORIA, ILLINOIS, HAVE BEEN INVITED AND MAY ATTEND TO WITNESS ILLINOIS [GOVERNOR] PAT QUINN SIGN THE HISTORIC TAX CREDIT FOR THE PROPOSED HOTEL PROJECT ON MAIN STREET ON SATURDAY, JUNE 19, 2010, AT 9:15 A.M., AT THE PEORIA MARQUETTE, CHEMINEE BALLROOM, 501 MAIN STREET, PEORIA, ILLINOIS.

Please note this is not a meeting and no official action will be taken.

Tax credits for a guy making $9 million on this Wonderful Development, after he’s already received a $37 million gift from the city. That’s capitalism?

Thanks, State of Illinois. At least you can afford it. Oh, wait….

Business, City of Peoria

Kinseth pulling out of Peoria

37 Comments

The Journal Star reports that Kinseth Hospitality, owner of the Holiday Inn City Centre downtown, is bidding farewell to Peoria. The hotel will be managed by Pyramid Hotel Group of Boston. It’s unclear at this time who will actually own the property.

Kinseth was critical of the city of Peoria, which provided EM Properties Ltd. with a $37 million bond to reconstruct the Hotel Pere Marquette into a Marriott Hotel structure.

About a year ago, he wanted the City Council to support a $10 million City Centre renovation project with $8 million in assistance. That, however, did not go anywhere.

“Obviously, the city is not willing to support this hotel at this time,” Kinseth said. “In 10 years, we haven’t made a dime and spent tons of our money and worked very hard. We’ve never made any money on the hotel and worked very hard and care deeply about the hotel and staff. At this time, we can’t do it anymore. It’s time to move on.”

The assistance Kinseth sought from the City would have upgraded their property from a Holiday Inn to a Crowne Plaza Hotel. The plan was remarkably similar to the Wonderful Development, though far less costly. Yet the City wouldn’t even entertain Kinseth’s proposal, despite the supposedly dire need for more quality rooms downtown to support the Civic Center. Instead, the City is using the Holiday Inn’s property taxes and sales taxes to fund their competition to the tune of $37 million. It’s hard to blame Kinseth for giving up on Peoria under those circumstances.

City of Peoria, Economic Development, Peoria Streets

Peoria’s priority problem

33 Comments

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

City of Peoria

Does the Wonderful Development have all its financing?

19 Comments

I got the impression from the City Council meeting Tuesday night that all of the financing for the Wonderful Development (downtown Marriott) was in place, and all he needed was the City’s okay in order to start construction. But then I read this in the Journal Star this morning:

Before the conventions can be attracted, EM Properties, the developer of the Marriott Hotel project, needs approval from the Illinois Finance Authority. The authority next meets June 8, and it’s unknown whether a request for a moral obligation bond supporting the hotel will be on the agenda.

“Realistically, that may be too soon for all the materials to come together after the City Council decision but our team is working closely with EM Properties,” finance authority spokeswoman Marj Halperin said.

So the project is dependent on Matthews getting this IFA loan? Am I reading that right? If so, why was the project characterized as having all its financing in place in the days leading up to the City Council’s vote? Why did the council communication say, “EM Properties . . . has now secured all necessary private financing”? (I know, the IFA is public financing, not private — nevertheless, the council communication gave the impression that the City’s $37 million obligation was the only public financing needed for the project to begin.) Why was it not mentioned during the marathon City Council meeting?

City Council, City of Peoria

Liveblogging the City Council 5/25/2010

87 Comments

Hello everyone, and welcome to the Peoria City Council meeting for May 25, 2010. Hold on to your wallets, as a lot of your tax money is destined to be given to a private developer tonight. It’s also packed in council chambers. Outside there are a bunch of AFSCME employees chanting “chop from the top” very loudly to try to disrupt the meeting [note: the crowd was dispersed by the time the meeting got underway]. All the council members and the mayor are present, and we’re on our way. The clerk is reading the consent agenda now. As usual, I’ll be updating this post throughout the night, so please refresh your browser often to see the latest comments. Here’s the agenda:

Continue reading Liveblogging the City Council 5/25/2010 →

City of Peoria, Peoria Civic Center

Is the Civic Center expansion meeting consultant’s predictions?

39 Comments

In 2005, the Peoria Civic Center broke ground on a $55 million expansion project. The project was completed on March 1, 2007. The project was approved in part because of a study done by Charles H. Johnson Consulting, Inc., in 2002 which predicted a positive economic impact for the expansion. Peoria would be able to attract more conventions, bringing more people to Peoria, which would lead to higher sales tax revenues.

I thought it might be helpful to look at the predictions and compare them to the newly-expanded Civic Center’s actual performance. Let’s look at these three indicators: Event Days, Attendance, and Net Operating Income.

First, to be fair, I should point out that the Johnson report’s predictions are for “a stabilized year of operation after facility improvements are completed.” What constitutes a “stabilized year of operation” is open to some debate. It could be as early as the third year of operation after completion, or as late as the fifth or sixth. We only have numbers up through FY2009, since FY2010 won’t be complete until the end of August. So, while it’s been three years since March 2007 by the calendar, we only have numbers up through August 2009, or roughly two years after completion of the project.

Nevertheless, it’s worth looking at the trends even this early for two reasons: (1) the time leading up to a “stabilized year” is called the “ramp up” time, and one would expect to see the numbers trending upward even if they haven’t yet reached the predicted levels, and (2) the success of the Civic Center is cited as one of the biggest reasons (if not the only one) for approving the Wonderful Development (i.e., downtown Marriott hotel deal).

Event Days

The Johnson study predicted that the number of Event Days would rise from 510 (the total for FY2001) to 632 — a 24% increase — after expansion. Actual Event Days from 2001 to 2009 did trend upward to a peak of 607 in FY2008, but then dipped significantly in FY2009 to 575. Here’s the breakdown by facility (Theater, Arena, Convention Center), with the total shown in green:

When you look at the Event Days by facility, the Arena and Convention Center actually met or slightly exceeded predictions, whereas the Theater fell short in FY2008. However, increasing Event Days does not necessarily translate into higher attendance or more net income, as we shall next.

Attendance

The Johnson study predicted that Attendance would increase from 849,885 (FY2001 total) to 1,071,500 (26% increase) after expansion. Actual Attendance has indisputably trended downwards. Peak attendance was way back in 2002 when it reached 913,335. Since then, it has fallen every year except for 2008 when it bumped up slightly to 832,121.

It’s interesting that, even though Event Days trended upwards, attendance trended downwards. It’s attendance that we’re really after with the Civic Center, since it’s people who eat at restaurants, stay at hotels, and go shopping in Peoria, thus adding to our sales tax base. If attendance is going down, we’re losing money on the expansion. We would expect that to be reflected in the Civic Center’s Net Operating Income, and it is.

Net Operating Income

The Johnson study said the FY2001 Net Operating Income was $212,000. I’m not sure where they got that number. According to the Civic Center’s financial statements, there was a Net Operating Loss in FY2001 of $1,732,500. Even Operating Income Before Depreciation is only $78,333, although it’s at least on the positive side. I could find no reference to a $212,000 profit anywhere in the financial statement. It’s possible the amount was a preliminary figure that was revised subsequent to the report being published.

Nevertheless, Johnson predicted Net Operating Income of $1,519,000 after improvements. The actual picture of the Civic Center’s finances is not so rosy. From FY2001 to FY2009, the Civic Center suffered Net Operating Losses every year, and those losses are trending downward. FY2009 saw an all-time low loss of $4,273,556.

Much of this is a result of depreciation. If we look at Operating Income Before Depreciation, the trend from FY2006 to FY2009 is reversed, but still in the red.

At the current rate of increase, it will take somewhere in the neighborhood of fifteen years for Operating Income Before Depreciation to reach Johnson’s predicted levels.

Conclusion

While Event Days were close to reaching predictions before the downturn in business in FY2009, neither Attendance nor Net Operating Income show any signs of reaching their predicted levels.

Afterword

There’s one other prediction not related to the Johnson report that’s worth noting. That was the prediction in a March 24, 2006, memo from the Civic Center Authority to the Peoria City Council that stated:

The Peoria Civic Center Authority is not now and has not previously requested public funding for a hotel. We have always hoped that a private development would be interested by the Peoria Civic Center expansion and upgrade to come forward with a proposal. We hope that the community will enable such a development.

The Peoria Civic Center Authority is committed and continues to be committed to the success of the expanded facilities. We believe it can be successful without an attached hotel but more and larger regional opportunities will be possible if more and better downtown hotel rooms are available.

Six months after that was written, the Civic Center Authority started pushing for an attached hotel. So now, after $55 million in investment that we were promised would be successful without a publicly-supported, attached hotel, taxpayers are being asked to back another $37 million in public investment for not one, but two headquarters hotels — a Pere Marquette Marriott and a Courtyard by Marriott. To bolster hotel supporters’ predictions that these hotels will be successful and realize 68%+ occupancy rates, another study has been completed, this time by HVS International.

All indications are that the Civic Center expansion is failing and the predictions by Johnson Consulting were, to put it charitably, optimistic. Yet we’re going to follow the same process of relying on rosy predictions from consultants and promises of success from the Civic Center (and Convention and Visitors Bureau) to give $37 million toward a headquarters hotel.

Why should we believe all these predictions of success? What empirical evidence is there that this project will pay off for the taxpayers? There is none.

See also:
Journal Star editorial 5/23/2010
Wonderful Development agreement raises questions

City Council, City of Peoria

What’s the justification for the Wonderful Development?

38 Comments

The ordinance that would authorize the Wonderful Development (downtown Marriott project) to move forward includes this justification:

WHEREAS, the City Council of the City of Peoria finds as follows:

  1. That the buildings on the Project Site have remained underused for a period of at least one year.
  2. That the Project is expected to create or retain job opportunities within the municipality.
  3. That the Project will serve to further the development of adjacent areas.
  4. That without the Agreement, the Project would not be possible.
  5. That the Developer, EM Properties Ltd., meets the high standards of credit worthiness and financial strength as demonstrated by a letter from a financial institution with assets of $10 million or more attesting to the financial strength of the Developer.
  6. That the Project will strengthen the commercial sector of the municipality.
  7. That the Project will enhance the tax base of the municipality.
  8. That the Agreement is made in the best interest of the municipality.

Is this the standard for getting $37 million from taxpayers? I can think of all kinds of businesses that could make such claims — it will create jobs, strengthen the commercial sector, enhance the tax base, meet “the high standards of credit worthiness,” etc., etc. Is that really a justification for taxpayer assistance? Where’s the line at City Hall for those handouts?

I would also like to point out that the buildings on the Project Site have been underused for the past year and a half precisely because of the previous unfulfilled redevelopment agreement with EM Properties, whose “high standards of credit worthiness and financial strength” were not impressive enough to result in actual financing of the original project. Why would the current owner try to get tenants for the vacant buildings when he has an agreement to sell those buildings for imminent demolition?

And I take great issue with the contention the Agreement is in the best interest of the municipality. If the hotels (there are two now!) do not perform up to expectations, the bonds will have to be repaid from the general fund — a fund which is insufficient to provide the basic needs of the City. The City Manager is asking City departments for wage concessions to plug an anticipated $10 million budget deficit for 2011.

Supporters of the project will point out that defeating this project will not help the current budget crisis, and they’re correct. But what Peoria residents need to know is that approving this hotel project will create a future budget crisis. The MidTown Plaza project didn’t create a budget crisis in year one either, but we’re feeling its effects now. The same goes for the Firefly Energy loan guarantee. We won’t have to pay the piper for this hotel fiasco for five years or so, but mark my words, we will be paying the piper for it.