Beautiful Downtown Peoria

Beautiful Downtown Peoria

Monday, September 15, 2008

HIZ TIF and BDD - Executive summary

Hospitality Improvement Zone (HIZ)
Tax Increment Financing (TIF) District
Business Development District (BDD)
Executive Summary

The map below shows the area to be included in the Proposed Hospitality Improvement Zone (HIZ) Tax Increment Fiancing (TIF) District. The proposed Business Development District (BDD) covers the same area plus the Civic Center area to the southwest of the map.



The City of Peoria is considering the creation of a Tax Increment Financing District (TIF) and a Business Development District (BDD) in downtown Peoria. The purpose of these Districts is to help the Hospitality industry improve, bringing more investment, vitality, tax base, and jobs to downtown Peoria.

TIF INTRODUCTION – PROJECT AREA

The proposed Hospitality Improvement Zone TIF is irregular in shape and is generally bounded by Main, Monroe, Fayette, Adams, Hamilton, Madison, Fulton, Monroe, William Kumpf and M.L. King Drive. The Project Area is approximately 26 acres in size and contains a total of 49 tax parcels. Approximately 6 acres of land are dedicated to streets, alleys and other public rights-of-way, leaving 20 acres of net land area, which is classified as improved property.

The BDD is slightly larger then the TIF. It includes the Civic Center property to the south of the TIF.

TIF ELIGIBILITY

The Project Area is being designated using the criteria for an improved “conservation area.” In order to be designated as a conservation area, 50% or more of the buildings in the Project Area must be 35 years of age or older.

The Project Area contains 32 buildings, 27 of which meet the age threshold, representing 84% of all buildings. The eligibility analysis to determine whether the Project Area qualifies for designation under the TIF statute included the following tasks:

Exterior survey of the condition and use of each building

Field survey of environmental conditions involving parking facilities, public infrastructure, site access and general property maintenance

Analysis of existing land uses and their relationships

Comparison of surveyed buildings to zoning regulations

Analysis of current platting, building size and layout

Review of previously prepared plans, studies, inspection reports and other data

Analysis of real estate assessment data



Exterior building condition and site conditions surveys of the Project Area were undertaken on June 24-25, 2008. At least 3 factors of 13 factors that are defined in the TIF Act must be meaningfully present and reasonably distributed with respect to improved property.

Six factors meet this requirement with respect to the proposed Hospitality Improvement Zone TIF. These factors include:

Obsolescence – evidenced by the age of structures, deferred maintenance, inadequate provision for service and off-street loading, and vacancies, especially on upper floors, that reflect economic and functional obsolescence.

Deterioration – with respect to private property, including site improvements buildings, and maintenance with respect to windows, doors, fascia and other trim elements that are beyond normal repair. Most tax parcels exhibit deterioration with respect to site improvements and buildings. Deteriorated public infrastructure, including alleys, sidewalks, and street pavement is also found throughout the Project Area. Deterioration was identified with respect to 84% of all tax parcels and 59% of buildings.

Inadequate utilities – due to the age and capacity of utilities and the lack of separated sanitary and storm sewers. The City is under an EPA mandate to develop a plan the reduce pollutant discharges from the existing combined sewer system. The central water system is old and electric service is also in poor condition. Utility upgrades will be needed to support new development in the Project Area.

Excessive land coverage or overcrowding of community facilities – with closely spaced, multi-story buildings that are obsolete and deteriorating, inadequate provisions for off-street loading. During the field survey of building and site conditions, numerous instances of delivery trucks off-loading supplies from public streets were observed.

Lack of community planning – illustrated by parcels that are generally of inadequate shape and size to meet contemporary development standards, and uses (such as adult entertainment and the work-release facility) that are incompatible with the desired image of the area as a convention and meeting center anchored by the Civic Center and major, high-quality hotels. The current land use pattern evolved under a planning philosophy that is no longer considered desirable in Peoria. In particular, the emphasis on large surface parking lots to serve various commercial and civic land uses consistent with planning philosophy common from the 1950’s through the 1980’s. This approach has given way to an emphasis on compact mixed use development that energizes activity at the street level and the use of parking structures, as articulated in the Heart of Peoria Plan.

Lagging or declining EAV – the EAV of the Project Area has declined in two of the last five years and lagged that of the City for two other years, meeting the statutory test for the presence of this factor.

In addition three other factors are present to a more limited extent. These factors support designation of the area as a Tax Increment Finance District, but were not used to establish eligibility of the Project Area for TIF designation. These factors are:

Excessive vacancies (13 of the 32 buildings, 41%, were either fully or partially vacant. These vacancies contribute to the image of decline and disinvestment and serve as an impediment to attracting new private investment.

Presence of structures below minimum code standards (affecting only three buildings – the theater, Amvets and parking deck – based on the presence of significant deterioration or limitations on use of upper floors related to life safety issues)

Deleterious land use or layout (affecting only the block in the northwest portion of the Study Area, where an overcrowded car repair shop and used car lot conflict with the commercial/residential mixed use character of the remainder of the block).

REDEVELOPMENT PLAN

The Plan seeks to encourage redevelopment and repositioning of the Project Area as a vibrant regional conference center that provides adequate hotel facilities to support the Civic Center and other hospitality-oriented businesses. The Plan is intended to improve Peoria’s ability to compete as a regional conference center by expanding and upgrading hotel facilities. The Plan recognizes that new investment in hotel, commercial and mixed-use property is needed to improve and revitalize the Project Area.

Redevelopment projects to be undertaken in the Project Area are intended to:

Rehabilitate existing hotels and commercial buildings in the Project Area;

Encourage development of new hotel facilities;

Encourage redevelopment of large surface parking lots into appropriate commercial and mixed use development; and

Provide public and private infrastructure, open space, streetscape improvements and other amenities to support private investment.



The Plan seeks to:

Make the downtown a viable business, tourism and entertainment center;

Provide an economic environment that supports existing and new businesses;

Make Peoria aesthetically desirable;

Provide safe and efficient infrastructure and utilities;

Provide for the orderly transition from obsolete uses to economically sustainable land development patterns;

Create an attractive environment that encourages new hotel and other hospitality-oriented uses;

Increase the Project Area’s tax base;

Encourage redevelopment of parcels that are underutilized and vacant;

Reduce or eliminate deleterious conditions within the Project Area; and

Improve public facilities and amenities.


Public intervention is needed to achieve the City’s development objectives for the Project Area, prevent the Project Area’s decline and encourage private investment. Revitalization of the Project Area will take time and cannot be accomplished without creation of public/private partnerships.

Despite investments made by the Pere Marquette, Mark Twain and Holiday Inn over the past decade in an effort to bring their facilities closer to the expectations of the current hotel market and investments by other commercial property owners, the taxable value of the Project Area as consistently lagged the economic growth of the rest of Peoria. Between 2002 and 2007, the taxable growth for all of Peoria averaged 6.2% annually, compared with 2.0% for the Project Area.

Repositioning the Project Area to make it a more competitive urban place will require significant new public and private investment.

LAND USE PLAN

The land use plan is intended to serve as a guide for future land use improvements and developments within the Project Area. The land use designation for the Project Area is Hospitality Mixed Use. The intent is to develop a vibrant mix of hospitality-oriented facilities that are integrated into the broader fabric of the downtown land use pattern. Within this framework, residential, commercial and institutional uses are appropriate complimentary uses. These uses are consistent with the redevelopment goals of the TIF plan, Peoria’s Comprehensive Plan and the Heart of Peoria Plan.

HOUSING IMPACT STUDY

The Project Area includes 4 buildings with residential units, 63 of which are inhabited. One mixed use building is vacant. Two other mixed use buildings contain units that are occupied by households. The final building is the DOC work-release facility with 26 dormitory-style rooms that can accommodate up to 200 inmates. Under U.S. Census definitions, the work-release facility is classified as “group quarters” and residents are not considered to be households.

FINANCIAL IMPACT ON TAXING DISTRICTS

Increased service demands for most taxing districts are expected to be moderate because they are already serving the Project Area. Upon completion of the Plan and Project, all taxing districts will share the benefits of a substantially improved tax base. To the degree that taxing districts experience increased costs as a result of implementation of the Plan, the City may enter into agreements with the affected taxing district in accordance with the provisions of the Act.

BUDGET

Over the 23 year life of the TIF, incremental property tax revenues are expected to be generated from new private development in the Project Area. These new property tax revenues may be available to support a variety of eligible redevelopment activities including infrastructure improvements, streetscape enhancement, rehabilitation and other eligible activities. The 2007 EAV of the Project Area is approximately $12,250,600. By tax year 2032, following substantial completion of development of the Hospitality Improvement Zone TIF Redevelopment Project, the EAV of the Project Area is estimated to be approximately $136 million.

BUSINESS DEVELOPMENT DISTRICT (BDD)

The BDD is a separate district. it covers the same area as the proposed TIF, and also the remainder of the Civic Center property to the southwest of the District. The BDD allows the City to enact an up to 1% sales tax on hotels and businesses. The money would be used to help hotels and businesses improve their properties. Citizens who wish to know more about the plan are invited to review a copy of the complete plan at the Economic Development Office.


FURTHER PUBLIC REVIEW

Citizens who wish to know more about the plan are invited to review a copy of the complete plan at the City Clerk office, or at the Economic Development Office temporarily located at 505 E. Monroe Street, Peoria, Illinois. You can also send comments or questions to Craighullinger@gmail.com, or call at 309 494 8640.

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City Planner, Colonel, Marine Corps Reserve Retired, Vietnam Vet, married to Beth Ruyle