A development firm says it has retailers interested in the former Pekin Bergner's property, but will need financial support from the city to clinch the deal.
Cullinan Properties wants to demolish the former Bergner's at East Court Village to make way for a new development that would include a Marshalls, Ross Dress for Less, and Five Below.
Four anchor stores would occupy around 72% of the 55,000-square-foot space. An additional 13,000 square feet would be dedicated to smaller shops.
Diane Oberhelman is chairman and founding partner of Cullinan Properties. She said the developer is ready to spend $43 million of its own money on demolition and construction, but the company is seeking $9 million from the city.
"Relatively speaking nationwide, this would be considered a very good ratio, if you will, of investment for the city return," she said.
The proposed deal also includes various tax incentives, such as 100% reimbursement of business development district sales taxes, municipal sales taxes, and home rule tax revenues through 2044, or until Cullinan reimburses the city's $9 million. That includes a deferral of $2 million already owed.
Oberhelman argues that Cullinan Properties' plan for East Court Village will serve as a springboard for additional third- party developments, similar to East Peoria's Levee District.
"It not only builds the retail base, but adds to the potential for hotels, potential spin-offs, gas stations, restaurants, so many things that are exciting, really built to the retail base," she said.
A Cullinan Properties market study showed Pekin is currently "leaking" potential retail business to other nearby communities, particularly when it comes to apparel sales. It's estimated the new development could recapture over $16 million in sales leakage and generate up to two million visits a year. That also could result in up to $3.8 million in new sales tax revenues if those shoppers also spend $50 to $100 elsewhere in Pekin.
Pekin Mayor Mary Burress said the city is admittedly lacking in some retail options.
"Probably most of us here are guilty of what you're calling leakage," she said. "We all go to East Peoria, Peoria, Bloomington, shopping. So we've got to do what we can to pull business here."
The City of Pekin has a couple of options for raising money for the redevelopment. The city could issue bonds, though the city's lack of financial audits over the past three years could negatively impact interest rates. Oberhelman said area banks may be willing to work with the city on a loan at a lower interest rate.
The Bergner's space is the last vestige of the former Pekin Mall that was opened in 1972 and was razed 30 years later. The Bergner's department store chain closed its stores in 2018.
Oberhelman said time is of the essence, as too much of a delay could cause the retail businesses to lose interest and move on. She said the next steps are to build a council consensus of support for the project and work with city staff to hammer out more details.
If all goes to according to the current timeline, she said the new shopping center could be open in 2025.
