Redevelopment of Peoria, Illinois

Four Buildings Proposed for Redevelopment



On Tuesday September 22, 2009 City Council will consider proposed redevelopment agreements for four buildings. The first three buildings face Washington Street. The drawing above shows the three buildings from the perspective of the alley between 401 Water Street and Washington Street. The buildings will be interconnected.



The other building under consideration is the Edgewater Building facing the Illinois River and 401 Water Street.


The four buildings total 66,800 square feet. Costs are estimated at $6,790,000.


These great redevelopments will help continue the ongoing efforts to revitalize and renew the Heart of Peoria. They will bring jobs and vitality to the area.


Agenda Date Requested: September 22, 2009

Action Requested: APPROVAL TO ENTER INTO A TIF REDEVELOPMENT AGREEMENT WITH HGI, L.L.C. AND AUTHORIZE THE INTERIM CITY MANAGER TO EXECUTE THE NECESSARY DOCUMENTS. THIS PROJECT IS LOCATED IN THE CENTRAL BUSINESS DISTRICT TIF. (COUNCIL DISTRICT 1)


Background: The Redeveloper plans to completely reconstruct three adjacent properties:
408 SW Washington Street is a four story 24,000 square foot former retail store and warehouse. The property will be reconstructed into a first class office building. Renovations to include but not limited to a complete reconstruction and bringing the building into compliance with governing body codes for accessibility, fire and structural safety.

Estimated cost for complete renovations of this building are $1,800,000.00
412 SW Washington Street is one story 12,000 square foot former assembly, printing and warehouse building. The property will be reconstructed into a first class office building. Renovations to include but not limited to a complete reconstruction and bringing the building into compliance with governing body codes for accessibility, fire and structural safety.

Estimated cost for complete renovations of this building are $1,600,000.00
420 SW Washington Street will be a new 10,800 square foot building inside the existing fa├žade of a former retail store and warehouse building. The property will be reconstructed into a first class office building. Renovations to include but not limited to a complete construction and bringing the building into compliance with governing body codes for accessibility, fire and structural safety.


Estimated cost for complete renovations of this building are $1,140,000.00


Financial Impact: HGI, L.L.C. is asking for a TIF Redevelopment Agreement with a 50/50 split of the property tax for the life of the TIF. Conservative estimates indicate property tax on the increment would result in a total of $979,480 over the life of the TIF with $489,740 going to the City for infrastructure improvements (Exhibit A). The property is located in the Enterprise zone and the company is eligible to receive the sales tax exemption on building materials that is estimated to be $181,600; the City’s portion being $56,750.



NEIGHBORHOOD CONCERNS: There are no neighborhood concerns.



Impact if Approved: The City will enter into a redevelopment agreement with HGI, L.L.C. which will provide them with an incentive to redevelop and renovate the property. The redeveloper will receive 50% of the property tax increment over the life of the TIF and the City will capture the remaining 50% of the property tax increment to utilize for infrastructure improvements.



Impact if Denied: The City will not enter into the redevelopment agreement and the City will not capture the property tax for infrastructure improvements.


Alternatives1: None


EEO Certification Number: In Process



RELATIONSHIP TO THE COMPREHENSIVE PLAN: This project assists in achieving both the vision and goals of the Comprehensive Plan as follows:



Chapter 5 ECONOMICS--VISION: A HEALTHY, THRIVING ECONOMY; and GOAL: A.1. Provide an economic environment that supports existing and new businesses. A1.8. Consider providing public money to encourage private investment.



Agenda Date Requested: September 22, 2009



Action Requested: APPROVAL TO ENTER INTO A TIF REDEVELOPMENT AGREEMENT WITH IRON FRONT, L.L.C. AND AUTHORIZE THE INTERIM CITY MANAGER TO EXECUTE THE NECESSARY DOCUMENTS. THIS PROJECT IS LOCATED IN THE WEARHOUSE DISTRICT TIF. (COUNCIL DISTRICT 1)



Background: The Redeveloper plans to completely reconstruct the Edgewater Building. The structure is a two story 20,000 square foot former parking deck turned warehouse. It will be reconstructed into a first class office building with parking. Renovations to include but not limited to, a complete reconstruction and bringing the building into compliance with governing codes for accessibility, fire and structural safety.



Estimated cost of complete renovation is $2,250,000.



Financial Impact: Iron Front, L.L.C. is asking for a TIF Redevelopment Agreement with a 50/50 split of the property tax for the life of the TIF. Conservative estimates indicate property tax on the increment would result in a total of $882,591 over the life of the TIF with $441,296 going to the City for infrastructure improvements (Exhibit A). The property is located in the Enterprise zone and the company is eligible to receive the sales tax exemption on building materials that is estimated to be $90,000; the City’s portion being $28,125.



NEIGHBORHOOD CONCERNS: There are no neighborhood concerns.



Impact if Approved: The City will enter into a redevelopment agreement with Iron Front, L.L.C. which will provide them with an incentive to redevelop and renovate the property. The redeveloper will receive 50% of the property tax increment over the life of the TIF and the City will capture the remaining 50% of the property tax increment to utilize for infrastructure improvements.



Impact if Denied: The City will not enter into the redevelopment agreement and the City will not capture the property tax for infrastructure improvements.



Alternatives1: None



EEO Certification Number: In Process



RELATIONSHIP TO THE COMPREHENSIVE PLAN: This project assists in achieving both the vision and goals of the Comprehensive Plan as follows:



Chapter 5 ECONOMICS--VISION: A HEALTHY, THRIVING ECONOMY; and GOAL: A.1. Provide an economic environment that supports existing and new businesses. A1.8. Consider providing public money to encourage private investment.






Sealtest Building Latest Warehouse Redevelopment



This building is proposed for mixed use redevelopment, and will be considered by the City Council in October 2009.






















The Sealtest building on Washington and Street is proposed for a redevelopment agreement. The building will be converted to commercial and residential in conformance to the Heart of Peoria Plan, the Warehouse District Redevelpment Plan, and the Form Based Code.

TIF Works - Warehouse District up 11%

The graph and chart below show how effectively the two new Tax Increment Financing Districts (TIF's) have worked. Despite "The Great Recession of 2007-2009", Equalized Assessed Evaluation (EAV) has grown very rapidly in the TIF's, faster then the City as a whole and faster then School District 150. 150 lags the City because it's boundary misses the rapidly developing north side of the City.





We believe these numbers support the continued use of Tax Increment Financing. We want our older neighborhoods to thrive and improve, and TIF is one of the best ways to help that process.


Welcome new addition to the Warehouse District






Welcome new addition to the Warehouse District


Water Street Solutions is a great company that will occupy this building, eventually bringing 200 jobs to the Heart of Peoria. They assist farmers in improving their business operations through education and financial counseling.






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City Council Communication




Agenda Date Requested: September 8, 2009



Action Requested: APPROVAL TO ENTER INTO A TIF REDEVELOPMENT AGREEMENT WITH D & B DEVELOPERS, LLC AND AUTHORIZE THE INTERIM CITY MANAGER TO EXECUTE THE NECESSARY DOCUMENTS. THIS PROJECT IS LOCATED IN THE WAREHOUSE DISTRICT TIF. (COUNCIL DISTRICT 1)




Background: Darren and Becky Frye the owners of Water Street Solutions established D & B Developers, LLC to redevelop the old Peoria Post Office into a modern office building to house their business Water Street Solutions. Water Street Solutions operates in eight states with Peoria, IL being its headquarters. The company was founded in 1987 by local owners Darren and Becky Frye, to change agriculture one farmer at a time.


Water Street Solutions provides education and financial counseling through their online Water Street University courses and small forums. The Producers’ Kitchen Table allows them to coach producers to reach their true potential as Americas most important business men and women. In 2006 Water Street Solutions employed six. Today they have 76 full time employees and anticipate hiring 20 more this year. They plan on hiring additional employees over the next three years resulting in a total of 200 jobs located in the Warehouse District.

The Redeveloper plans to reconstruct the old Peoria Post Office building located at 601 S.W. Water St. They plan to take the existing warehouse and convert it into a modern two story office building that will have 19 offices, 2 conference rooms, 1 board room, and a common area with 76 cubicles. They also plan to construct an employee lounge and a training room that will seat approximately 50 people. Other features include an exterior deck that faces Water Street and a “green habitat” entrance way.



The Redeveloper will also design, bid and construct Walnut Street to City specifications/requirements and be reimbursed by the City on completion.Financial Impact: D & B Developers are asking for a TIF Redevelopment Agreement with a 50/50 split of the property tax for the life of the TIF. Conservative estimates indicate property tax on the increment would result in a total of $1,529,825 over the life of the TIF with $764,912 going to the City for infrastructure improvements (Exhibit A).


The property is located in the Enterprise zone and the company is eligible to receive the sales tax exemption on building materials that is estimated to be $156,000; the City’s portion being $48,750.




NEIGHBORHOOD CONCERNS: There are no neighborhood concerns.




Impact if Approved: The City will enter into a redevelopment agreement with D & B Developers, LLC which will provide them with an incentive to redevelop and renovate the property. The redeveloper will receive 50% of the property tax increment over the life of the TIF and the City will capture the remaining 50% of the property tax increment to utilize for infrastructure improvements.


Impact if Denied: The City will not enter into the redevelopment agreement and the City will not capture the property tax for infrastructure improvements.



RELATIONSHIP TO THE COMPREHENSIVE PLAN: This project assists in achieving both the vision and goals of the Comprehensive Plan as follows:


Chapter 5 ECONOMICS--VISION: A HEALTHY, THRIVING ECONOMY; and



GOAL: A.1. Provide an economic environment that supports existing and new businesses. A1.8. Consider providing public money to encourage private investment.