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
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 façade 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 $1,800,000.00
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 façade 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.
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.
Market Research Update
In and Near Downtown Peoria Housing
Good news:
The link below is the update on the in and near downtown housing market research from Tracy Cross, the premier housing market research firm in Illinois.
More info below:
The Warehouse District is adjacent to downtown Peoria and the Illinois River, just south of I-74. The City of Peoria wants the area to convert to a great mixed use redevelopment area, with loft apartments, condos, offices, shops and resturants.
Redevelopments in the District will get the Enterprise Zone incentive, which means no sales tax on building material. The Warehouse District Tax Increment Financing District (TIF), which has over 21 years left. It takes a while to plan and build and get the building assessed, so a new redevelopment will probably have about 20 years of property tax incentive.
Property taxes are almost 2.8% of fair market value, so you can figure on about 56% of the new market value you create coming back to the redevelopers over the next 20 plus years.
The standard city warehouse agreement gives 1/2 of the tax increment back to the developer, with the other 1/2 going for infrastructure, which can include parking lots and decks.
Most of the buildings were built before 1936, and can therefor qualify for a 10 to 20% Federal Historic Tax Credit.
Property taxes are almost 2.8% of fair market value, so you can figure on about 56% of the new market value you create coming back to the redevelopers over the next 20 plus years.
The standard city warehouse agreement gives 1/2 of the tax increment back to the developer, with the other 1/2 going for infrastructure, which can include parking lots and decks.
Most of the buildings were built before 1936, and can therefor qualify for a 10 to 20% Federal Historic Tax Credit.
The entire area is in a Hub Zone. This great program enables small businesses who qualify to get the equivalent of minority business status. Read it on the blog under Hub Zone. http://hubzonepeoria.blogspot.com/
The area qualifies for a grant from the City to help low and moderate income buy homes. The grant is $10,000, and single persons earning under $35,000 are qualified. There is also low interest mortgage money available. More info on the blog. http://housingpeoria.blogspot.com/
The area qualifies for a grant from the City to help low and moderate income buy homes. The grant is $10,000, and single persons earning under $35,000 are qualified. There is also low interest mortgage money available. More info on the blog. http://housingpeoria.blogspot.com/
Banks also have some additional mortgage down payment assistance programs.
The City is also developing the Peoria Urban Living Iniative with partners Methodist, OSF, Cat, Bradley U, the County, School District and City. This study is looking at possible additional incentives to get companies to help employees live close to work and in the downtown area.
More info on the blog below. Check out the Warehouse, TIF, Hub Zone, etc under:
http://www.peoriaed.blogspot.com
http://www.peoriaed.blogspot.
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