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Distillery Labs lands a $2 million federal grant. What that means for the project and its timeline

Distillery Labs banner
Tim Shelley
A banner advertising Distillery Labs hangs on the future physical site of the innovation space at 201 SW Adams, the former ICC Thomas building.

It's been more than three years since plans for a downtown Peoria innovation hub were first announced.

Now dubbed Distillery Labs, the business incubator landed $10 million in state money toward capital investments in the former Illinois Central College building at 201 SW Adams.

That fell a bit short of what was needed to get things rolling, but a $2 million CARES Act grant from the U.S. Economic Development Administration is giving the project the extra boost supporters of the project have long awaited.

"Now that we know that this is going to be able to be built with that additional $2 million in EDA funds, we can finalize all the different programming elements inside the building, hopefully get through construction drawings early next year, with maybe swinging some hammers by springtime, is the goal." said Distillery Labs executive director Paul Leamon.

Distillery Labs is a collaboration between the University of Illinois System, OSF HealthCare, ICC, and the Greater Peoria Economic Development Council. It's also part of the Illinois Innovation Network, the centerpiece of which is Chicago's Discovery Partners Institute.

"It really does help expand, and really, maybe complete the vision," said OSF HealthCare CEO Bob Sehring, noting the grant allows for expanded options at Distillery Labs not possible with the state money alone.

Tim Shelley
The former ICC Thomas building as seen in 2019.

The retrofitted Thomas Building features two floors and a rooftop space, with a communal café and reception gathering space, co-working areas, and rooms for educational programs and workshops. Plans are for at least 200 tenants to work out of the building at any given time.

Work there will focus on health care, manufacturing, and agriculture, with particular focuses on food systems and autonomous vehicles — and the intersectionality among those sectors.

"I can think of dozens of crossovers between healthcare and food, for example, and between autonomous mobility and farming, you know," said Greater Peoria Economic Development Council CEO Chris Setti. "Whether that's drones or self driving combines, there's so (much) interplay. So actually, having all those those three disciplines kind of meshing with each other actually can be greater than the sum of its parts."

Setti said fostering entrepreneurship and innovation is at the core of the GPEDC's regional economic development and growth strategy. He describes it as a team approach, incorporating not only Distillery Labs, but also other organizations like the Minority Business Development Center, SCORE Peoria, and the Illinois Small Business Development Center at Bradley University.

"Distillery Labs, obviously, it's a facility, and it might be kind of the representative part of the entrepreneurial ecosystem. But really, it's about the programming it offers, and that programming is offered not only in the building, but it's going to be throughout the community," Setti said. "You know, it's just as important for Pekin and Morton as it is for Peoria, as well. So it's a physical location, but I think it's really going to be an important player in our economic development landscape."

Leamon said the entrepreneurial ecosystem is historically disconnected. Part of the value of a facility like Distillery Labs is beginning to share more resources and break down some of the conventional silos, he said.

Tim Shelley
The new OSF HealthCare ministry headquarters is located just across Adams Street from the Distillery Labs building.

Sehring sees Distillery Labs as a central location on a larger "innovation corridor," also incorporating entities like the new OSF HealthCare ministry headquarters across the street, Caterpillar, the University of Illinois College of Medicine Peoria, Bradley University, and the Peoria Ag Lab.

"Not all innovation is going to live at Distillery Labs, certainly, but does it serve as a great convener, for a lot of those different pieces that want to come together or work around a particular idea or innovation?" he asked.

Sehring said there's value in bringing people of different backgrounds and expertise together. For example, he said OSF and Caterpillar have recently begun to collaborate more in some clinical areas, such as acoustics and audiology. But he said that first requires the space for that conversation to occur — a place like Distillery Labs, for instance.

Ultimately, the goal is to attract private investment. Leamon describes it as a mix between corporate innovation and Main Street entrepreneurship.

"We're actually beginning to work on things, rolling out our Smart and Connected City programs, so that (means) autonomous mobility among other things... and getting a lot of interest from corporates that maybe not even reside in Peoria today that have interest to say, here's a playground for entrepreneurship and innovation," Leamon said.

Tim Shelley
Western Avenue makes up one leg of the Peoria Smart and Connected Cities loop.

That loop is bounded roughly by Main Street, Western Avenue and Washington Street, encompassing much of downtown, South Peoria, and the West Bluff. It would serve as a testing ground not only for smart mobility, but 5G, IoT devices, and other technology.

Sehring said fostering that kind of environment means removing roadblocks and making things easy for budding entrepreneurs to create and innovate. That calls not only for access to capital, but also expertise.

He said Peoria can offer those things at a lower cost in more expensive metros like Chicago, Boston, or San Jose.

"It's the kind of supportive ecosystem that has all the tools and resources I need, but in a low cost environment. And I think that, you know, that's another potential win for for the community, for sure," Setti said.

Setti said creating that kind of a vibe can be a powerful attraction tool not only for entrepreneurs, but people in general as the city of Peoria looks to grow its population.

Distillery Labs is part of a longer-term innovation vision for the city of Peoria, said Leamon. Ten years down the road, he said he'd like to see the incubator offer a space from everything from companies with major venture capital backing looking to partner with larger organizations, to medium sized firms ("15, 20 more Natural Fiber Weldings"), to back-of-the-napkin ideas still in the earliest concept stages.

"I've seen this in other ecosystems across the Midwest. I was in Indianapolis for about eight years. And I think Peoria is probably about five to 10 years behind where Indianapolis was, and I saw this ecosystem growth through Indianapolis," Leamon said.

The Distillery Labs name itself harkens back to another age when Peoria was the whiskey-producing capital of the world. Through Caterpillar, manufacturing then came to define the city for nearly a century. Now it's undergoing another transformation centered around health care. But Sehring said he doesn't want to see things stop there.

"The health care ecosystem is quite strong in Peoria, and it is helping to sort of remake or reimagine the city," he said.
"(In) five to 10 years, I'd like to see the city reimagined again. Not that I'd like to see health care be de-emphasized. I think it can actually benefit greatly."

Despite the pandemic and other delays, Leamon said he's more excited about Distillery Labs' prospects today than when he onboarded a year ago.

"There are more assets here and the foundation is stronger than than I would have imagined over a year ago. So, I think the future is so bright, and I'm glad that the EDA grant has finally came through and we can get this building moving," Leamon said. "But again, it's not just a physical structure. It's an initiative. It's a movement. It's an ecosystem that's community wide."

Distillery Labs is now projected for a fall 2022 opening date.

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Tim is the News Director at WCBU Peoria Public Radio.