Pekin will loan developer $5 million toward re-utilization of former Bergner's property
The city of Pekin will loan Cullinan Properties $5 million to redevelop the former Bergner's at East Court Village.
That's less than what the developer had originally requested. Interim city manager John Dossey said the loan will be paid out in two $2.5 million tranches.
The first payment would happen this year, but only if Cullinan secures agreements with three commercial retail tenants leasing at least 5,000 square feet each by the end of this year. The second $2.5 million would be paid out after 20% of construction costs have been verified by the city and spent by Cullinan. That money wouldn't be paid out until May 31 of next year at the earliest.
The first $2.5 million payment would come from available business development district funds still available this fiscal year due to road project delays. The second payment would need to be included in the next city budget. If deadlines are missed, Cullinan would incur a one-time penalty payment of 15 of the current outstanding loan balance, and the developer would be required to meet with city officials twice a month.
Cullinan Properties will pay back the loans at 5% interest. The city will provide tax rebates to the developer to help make those payments, but Pekin will also now get 20% of the municipal retail and home rule sales tax revenue from the development. That's a projected $88,000 a year in new net revenue for the city after the rebates are factored in.
The council voted 5-2 to approve the agreement at Monday's meeting.
Council member Dave Nutter said the new redevelopment agreement is a better deal for Pekin than what was in place.
"I hate to use this term, but we sold out the farm; we gave the farm away on it. Well, we're going to keep some of the farm this time, and we're going to grow it and it's going to get better. It's a great incentive. We need development. The timing is right," he said.
Council member Lloyd Orrick was a no vote. He said he's against the city serving as a banker.
"I just can't believe it's going to be good for our 31 and a half thousand residents. I don't see how they're going to benefit from this," Orrick said. "I know Cullinan is going to benefit from it. But I don't see how our...other than they get a place to shop. Is that a benefit to them?"
Mayor Mary Burress said she believes it is.
"The 31,000 people that are in the city of Pekin will benefit from shopping in their own town instead of going to East Peoria, Peoria, Bloomington, Springfield," she said.
Under the new redevelopment agreement, the current Bergner's building will be reused rather than demolished. Cullinan Properties CEO Matt Beverly said they've worked with the stores to make sure their formats can fit within the existing building.
"Without tearing it down and rebuilding, these tenants can get open," he said.
Cullinan projects some of the stores could begin opening by the summer of 2026. Marshalls, Five Below, and Ross Dress for Less are among the retailers interested in the space.