It’s all over but the shouting.
The Journal Star reports that the City has notified Gary Matthews that they are terminating the redevelopment agreement for the Hotel Pere Marquette and surrounding properties.
In short, the three-page letter states the city is within its rights to pull out of the agreement because it is after Dec. 31, 2010 — the date at which the city could unilaterally withdraw under the terms of the deal if certain benchmarks were not met — and that there still are significant details missing on the financing Matthews’ business, EM Properties, was required to obtain. Indeed, it states that what has been provided thus far is “nothing close to what the city could prudently accept” as evidence. […] Though city lawyers believe the letter sent to EM Properties is adequate notice to terminate the agreement, City Council members will be asked to formally ratify the decision in a vote at their Sept. 13 meeting to confirm they agree with the move.
Letter Terminating the Wonderful Development
And so dies the vaunted Wonderful Development — a project that was so time-critical that it had to be approved practically overnight three years ago without any public input and as little notice as legally possible; a project that was going to be constructed “immediately” according to Matthews in May 2010; a project, the financing of which the Council was assured by Mr. Matthews was all in place over a year ago; a project Mr. Matthews was so confident about that he loudly and publicly blew off Councilman Gary Sandberg’s questions, saying “Just vote no, councilman”; a project that was going to cost the City of Peoria taxpayers up to $37 million, most of which was going to go into the pockets of Mr. Matthews and the owners of Big Al’s; a project that was going to relocate Big Al’s to a piece of property immediately adjacent to a day care facility; a project that ultimately fell apart like a house of cards.
City leaders will no doubt bemoan the cancellation of this project and say it’s a sad day for Peoria. And there may indeed be some unfortunate outcomes. The fate of the Pere Marquette would seem to be in question, for instance. But the losses that would have resulted had the project come to fruition would have been far worse. The City simply can’t afford the debt service on up to $37 million in bonds. No matter what they tell you, that project was never going to pay for itself. Their predicted occupancy rates and revenues were about as likely to come to pass as the Cubs winning the World Series.
On a positive note, I just want to express my appreciation to Mayor Ardis and City Manager Patrick Urich for finally pulling the plug on this project. You just know there was no small amount of pressure placed on the City to contribute even more toward making this project a reality, but to their credit, they said enough is enough. They didn’t let Matthews come back to the well a third time looking for more concessions and/or funding.
My hope is that, out of this abject failure a better project will arise: one that is privately funded and likely to succeed; a truly wonderful development.
UPDATE: I contacted Randy Ray to find out the disposition of the Franklin Street lot. Here’s his response: “The contract with Main Street Trust and Al’s for the Franklin lot terminated by its own terms because closing did not occur by July 31.” So, in other words, Big Al’s will not be moving, and the City retains ownership of the lot adjacent to the bus depot.
So? Does this mean that Big Al’s still gets to move? Didn’t we (the city) sell him that lot? If the city did sell him that lot (and it was for a song of a price) can’t Al now sell it for what it’s really worth? Or does this hotel deal going down the drain have the lot sale to Big Al’s also going? I am confused on this part.
Emtronics. I recall reading that the sale of the lot of Big Al’s was contingent on the project going forward. Yes, I beleive the lot sale goes down the drain, too!
A victorious day for CJ! Congrats!
Look for the Pere to close shortly, IMO
I encouraged the Council to support Matthews by giving him lots of encouragement, but not a dime of taxpayer money. I still think the rehab of the Pere (without the 2nd tower) is a worthy goal, but this path was not the right way. I think there are other ways to get this done that do not involve trying to feed at the Public trough.
Conrad, there may be another way to rehab the Pere but it hasn’t happened in 30 years–nobody has found it yet. The Pere will become the Hilton again, IMO. Shuttered and a huge eyesore and a significant problem for downtown as well as the PCC.
This is the worst blog I’ve ever seen! First of all you’re crazy if you think a private development is going to come in and do the same thing! There’s no such thing as a private development anymore! Also, there is a horrible misconception that this money is just sitting in a piggy bank to hand out…it’s not. This money is not going to go towards fixing our streets or hiring police officers. This money is a bond and will go to a development of some sorts, the question is what do you want that development to be. Also, I am calling bs on the city! Why else would they spend thousands of dollars on a study that says this project is a good idea and already sell the City property to Al for his new building if they had no intentions of making this project work. Either this project will happen or the city will get sued! Would you rather money go out the window for being sued or go into the community for economic development!
The Holday Inn was refurbed as the Sheraton with Private dollars, Amy. If it works for that hotel, it should work for the Pere!
Somehow the Four Points by Sheraton was able to be financed privately, so I don’t see why some private developers can’t or won’t do the same for the Pere Marquette.
Big Al’s move near the transit center never made sense anyway, so he should just stay where he’s at and start his Madison Theatre project. As for the Civic Center using the fact that they aren’t connected to a hotel as their excuse for poor performance — I just don’t buy it. They are not profitable because of poor management that doesn’t REGULARLY attract the types of entertainers that create regional attention and fill the space.
Amy — No misconception here. I’m very aware that the City doesn’t have the money “just sitting in a piggy bank to hand out.” That’s the problem — they don’t have the money! They would have to borrow it through general obligation bonds, and then the taxpayers would be on the hook to repay it, hoping that the revenues generated by the project would cover the bond payments. But they wouldn’t have. Thus, the general fund would have had to make up the difference, and it’s THAT money that could have gone to police and fire and road maintenance. There’s no such thing as a free lunch. Taxpayers would have had to pay the piper eventually, just like we’re doing now with the failed MidTown Plaza.
Also, the City did not “already sell the City property to Al.” The sale was contingent on the hotel deal going through. No hotel, no sale.
C J, neither you nor I know if this would have been true: “hoping that the revenues generated by the project would cover the bond payments. But they wouldn’t have”.
Amy, additionally, they raised the sales tax rate in the Central Business District, making it less competitive. They knew this was coming, because that money was shifted to the warehouse district last meeting and the meeting before that, money was pulled from that to the Pere for a new refrigerator or freezer (not sure which) for $15,000 when I didn’t think there was a restaurant left in the Pere.
District 150. The Pere may close, it could become something else. If you want downtown lofts It would seem to be the place to put them, other communities have even put them into old high schools. But it won’t be successful without crime getting under control. Tweek the stats all you want, but it is a problem and it is increasingly more violent Chicago Housing was allowed to give their residents vouchers and first month’s rent and a some moving expenses for their problem folks to come to Peoria. Parole places more and more of it’s population in district 2 (us), and that’s only part of the problem.
Amy — Calm down. I am glad to see a resolution to this issue. I hope something positive will come from it and I hope Peoria’s downtown will be revitalized one way or another. Walk around some day or evening. You’ll see what I mean. Downtown is dead and it is sad that it is that way. I will hope and pray for wise choices made in the future by our leaders. Now the question is, what happens with those three (or is it four?) currently closed ‘businesses’ next to the adult entertainment venue?
D150 Observer: It’s all about probability. We don’t know if the sun is going to come up tomorrow either, but it probably will.
Comparing whether the sun will come up to whether a hotel will succeed or not is a silly comparison CJ.
CJ I understand your way of thinking regarding the bonds, but this is why our city is at a stand still because they’d rather look at the negative instead of what the potential positive outcome. Have you ever thought of the potential dollars that this project can bring to the city so that they can spend more on streets, cops, etc. There has been more evidence leading to this project paying for itself than the mere opinion that it won’t. In my eyes if an international company like Marriott is willing to stake 30 years of investment into the community who am I or you to think otherwise. Obviously Marriott is successful for a reason. The city is doing nothing but turning down the chance to create more jobs, jobs for people who will take their paycheck and spend it in the community boosting sales to the whole area and more tax dollars to the city! I’ve heard a lot of criticism of this project, but never once in the past three years has anyone brought a better alternative to the table. Would you rather bring visitors to the area or let the Pere go bankrupt and turn into low income housing?
Amy doesn’t get it – IT WASN’T HAPPENING!!!! It likely WASN’T GOING TO HAPPEN!!!!!
I’m glad this monster died – it never added up for the taxpayer.
With the cooler weather last wk, I went for extended walks at lunch downtown. Now I have to say I’m used to being panhandled in PIA, so I’m not going to discuss how the panhadlers have gotten more frequent and aggressive. Anyhow, walking the streets of downtown I started to notice more empty storefronts, sidewalks in disrepair, and weeds all over. There was a general worn look, and in some spots seediness. Why is the COP not maintaining it’s streets and sidewalks? With an eagerness to borrow $37m to give a developer for a speculative development, why not the willingness to borrow to fix what you should?
Get out of the COP and D150 if you can…
But where will the people going to the museum stay?
You guys just don’t see the future if this project fails. Amy, your husband must work construction otherwise I can’t figure out why you got your panties in a bunch. MidTown Plaza is a prime example of failed. We, the taxpayers are paying for that and because of that and other failures, we have less police and fire and city crews to fix the streets. You know it’s bad when the city re-strips streets right through the potholes and cracks.
Here’s what will unfold. The Pere will go broke. It will be abandoned. Sully will buy it for a dime on the dollar and every kiss ass politician that kisses this guy will bend over backwards to install a round about at Main and Madison and then our local politicos will shower State funds on Sully to turn the Pere into high end apartments and a grant will be obtained for a sky walk to the City Hall and Civic Center buildings so our mayor and pals won’t have to walk among the regular people.
Ummmm……Emtronics didnt’ Sully die? I know politics in Peoria are a bit strange but to the best of my knowledge we don’t usually “shower” money on dead people.
Emtronics clearly doesn’t let silly things like facts get in the way of his diatribe.
As for all the empty storefronts that were mentioned — I can’t say I blame existing businesses for leaving that area rather than have to deal with the hostile climate that the city was creating by forcing them to compete with new businesses being brought in to the Pere Marquette, which would have been subsidized by the city and their bonds. I certainly don’t intend to patronize any business that is unfairly competing against our local business owners, and I’m more than happy to take my business to Kellehers, owned and operated by Mike Sullivan (Sully’s brother).
Zombie Sully then.
when i was downtown today there were 3 officers at the post office, did something happen? If not then why were they there? I’m not sure having more officers would solve anything if the officers don’t go to the problem areas.
If the city is so poor, why are they spending money on the warehouse district before anyone is even there? This isn’t Field of Dreams where if you build it they will come. At least the hotel would have brought construction jobs and a national player. Seems to me the city just has their pet projects they want to spend money on and can always find money for them. I wonder if the City Manager will take a pay cut to help the deficit? My guess is not. Everyone always goes after the public people but I think Government does the same thing; only looks out for themselvs.
Mahkno – people that are deceased are not “zombies”. Maybe your sensitivity chip is on low battery.
All — Mike “Sully” Sullivan is the one who died. Pat Sullivan, his brother, owns Kellehers and is involved in the Warehouse District redevelopment.
Amy — I’ve heard those arguments before. You can see my responses to many of them in this post and its comments from 2008 when the project was first proposed. There are many reasons to doubt the success of the project.
Pagtem: You might be taken more seriously if you wouldn’t spout anti-government, Tea Party nonsense.
Not only Midtown Plaza, but other debacles as well such as the Gateway Building. Imagine the 25+ year “temporary” 2% HRA tax going to pay for extra police, etc. instead of supporting the Civic Center. The same Civic Center that was supposed to draw restaurants, bars, shopping etc. to downtown (or so we were told). I think the citizens of Peoria deserve better than continually bailing out failed/failing enterprises with our tax dollars in lieu of basic services.
If the hotel was SUCH a great idea, Marriott has enough money to build it without our incentives. I can’t believe they require every community in which they build to front $40 million dollars…….
If Peoria has to spend 100 grand in legal fees to fight GEM for a while, it’ll be well worth it to do away with this project.
It’s really quite simple, the schools suck, the crime is bad. Until you fix those two things, people (and their tax revenues) will continue to get the hell out of dodge.
Yes When I said Sully, I meant Pat Sullivan, (some call Pat “Sully” a very common Irish nickname for Sullivan) Mike’s brother who has a huge investment in the warehouse district and this city has all of a sudden paid attention to this district with blocked streets, and monies from the State and city for various improvements.
My comment was tongue in cheek type comment but I’ll bet not far from true. There were no facts involve except one. Some dickhead didn’t like my post. There’s a surprise.
They interviewed Pat Sullivan on the news tonight, regarding the purported collapse of the hotel project.
I have no idea why he is now the media darling in this city.
He has all of the charisma of wet cardboard.
Regarding his “huge investment” in the proposed warehouse district, I’d like to know exactly how many of his own dollars he has invested in the multi-million dollar plans for Washington Street. And, why is it just fine to Pat Sullivan to dump that much public money into one street in Peoria, when so many other ones are falling apart; and yet it was dead wrong to dump public money into a hotel project?
Oh, forget that. I know the answer.
I think his logical next step is politics. And, we’ll all be poorer for that.
Itchy — The hotel is a private development. Washington Street is public infrastructure. That’s the difference.
C.J., no matter what sort of spin you, the city, or Pat Sullivan want to put on the “public” aspect of Washington St., the end result is that it is dumping millions of public money into a project that, if it even works, will benefit only a handful directly; most of which, is Sullivan himself.
On many levels, the proposed changes to Washington St. are worse than the proposed public investment in the GEM hotel.
First, there is nothing wrong with Washington St. now. It is not un-safe. Pedestrians are not being run over. It was just re-surfaced, with IDOT money, last year. There are numerous viable businesses along Washington St., which are paying into the public coffers with sales tax revenues. However, these are not the types of businesses that the Peoria movers and shakers want. So, they’re going to do what they can to move these viable businesses out, and replace them with “Peoria Heights South.” And, it’s no coincidence that Pat Sullivan wants it that way.
Second, by removing the Rte. 150 sticker from Washington St., these movers and shakers have now made all of the future maintenance, including snow plowing, completely off of our dime, instead of the state’s.
The “public” use of Washington St. is to have it safe, paved, etc. for traffic to move freely, and pedestrians to cross safely. That’s it. What the proposed changes will do is POSSIBLY bring different types of businesses in, while forcing existing ones out (especially during construction); create a zone that will ONLY help out those businesses that are new (maybe); and tie up traffic by condensing it from 4 lanes to 2; and really mess it up with a pretty turnaround.
You, the City, and Pat Sullivan, can hang whatever you want with a “public” tag on it for Washington St., but in the end, it will benefit only a few, and will be havoc for a number of others.
I’d rather have the hotel with my dimes going into it, than this Pat Sullivan-fueled monstrosity.
Rte. 24, obviously, NOT Rte. 150.
Sorry about that.
Itchy Brother: BINGO!
It sounds like it isn’t the Chamber pulling all the strings in Peoria, it is Pat Sullivan! When did he become the power broker in Peoria? 🙂
Dist150. That’s what I have been asking for some time? When did Sully, oops, Sullivan (for those that don’t know the difference) become the almighty? Since when did the warehouse district become the number one priority? What about the crumbling pad? The money losing Gateway Building? The fact that Hooter’s may leave. (just a rumor) . All of a sudden it’s street parties and round abouts. Sullivan must have nude pictures of the Mayor and council people at a party or something.
Why doesn’t this city worry and fix about the crap we have that is broken? The lack of development around Wrig….I mean O’Brien Field? The Mid-Town Plaza desert? The crappy streets? (They want to tear up a newly paved Washington Street and make it 2 lane so people can stand on wide sidewalks and duck behind fancy concrete planters and watch the traffic crawl by. The planters make excellent ash trays and urinals for the homeless.) I don’t get this but the very very last thing we need, is Sullivan to get elected to anything!