The Peoria City Council has approved a $324 million biennial budget, with fund balances being used to cover a $33 million gap in expenses over projected revenues.
The adopted spending plan is about $3 million higher than the city staff's original budget proposal, and it represents a spending increase of more than 5% from last year. Among the extra additions is $1.2 million in fire department overtime pay to staff a 24-hour rescue crew.
In his latest monthly interview with WCBU reporter Joe Deacon, Peoria city manager Patrick Urich discusses what the city council added to the budget during its weeks of deliberations.
Urich also talks about how new ownership’s plans for the adjacent Pere Marquette and Courtyard by Marriott hotels will help revitalize the downtown area near the Peoria Civic Center.
This conversation has been edited lightly for clarity and brevity.
The City Council this week approved the $324 million budget for the 2024 fiscal year. How much did the budget change from your original proposal over the course of deliberations?
Patrick Urich: Really, we just had a few modifications. We had the addition of some funding for Moffatt Cemetery (Freedom and Remembrance Memorial) that was included. We had the addition of a multi-use path running from Morton Square Park down to the riverfront that Councilman (Tim) Riggenbach wanted to have. Then we had the addition of the fire rescue overtime for the fire department to staff the fire rescue squad 24/7.
So, what do you see as the biggest advantages of this spending plan for the next year?
Urich: Well, I think the biggest advantage of the spending plan is we have resources to focus on the council’s strategic plan that they've just recently adopted. We have over $100 million of capital improvements. The majority of that is going into drainage projects and roads, so we're really excited that we're going to be able to kind of lean in this next year and do a lot of infrastructure work for the community.
But also, we've got some major vehicle needs that we have for our police department and for our fire department that we'll be investing in, as well as doing some facility work. We are going to be replacing our fire station on Northmoor (Road), which is Station 16. We've received a $5 million grant from the State of Illinois that is going to allow us to basically tear down the existing station and rebuild a new station there, as well as probably building in some community center space and space for our police department to have a substation there as well.
And what's the timeline for that project?
Urich: That's probably going to take us two years by the time we start. We'll do the design work right now, and then it'll take us probably two years to get through construction.
As you mentioned, one of the things that was put back in the budget during the deliberations was the reinstatement of a fire (rescue) crew. How was the staff able to work that $1.2 million expense into the spending plan, and how is this expense sustainable in future years?
Urich: Well, I think what we're looking at is: this is two people manning a rescue squad 24 hours a day, 365 days out of the year. So it's about $1.2 million of overtime expense. If we were to staff it with new employees, it would cost about $1.5 million. So it's actually more affordable for us to do this right now on overtime, and that's something that as we look to the future that we'll continue to do.
When we opened up an engine company last year with the SAFER (Staffing for Adequate Fire and Emergency Response) grant – we reopened Fire Station 8, just off MacArthur (Highway) – we applied for a federal grant for that. What the grant does, though, is it locks in your headcount at that level when you add in those 11 people as staff. So at this point in time, I really don't anticipate us applying for another federal grant for those additional positions, simply because it locks in our headcount and I’m just still concerned about what the economy may bring in the future. This at least provides the city with some flexibility.
Earlier this week, a ceremony welcomed the Pere Marquette hotel’s new Texas-based ownership firm. What does this mean for the city's hopes of realizing the full potential of that area?
Urich: It's very important. The one thing that the prior ownership group, which was really INDURE – which was the real estate arm of the electrical workers’ pension fund and some of the local banks here that were part of that ownership group – really weren't operating the space to its fullest potential. Coming out of COVID, they had basically shuttered the Courtyard and they were just operating out of the Pere.
Now, Shreem (Capital) is operating the hotel; they've got the Courtyard up and running. The Starbucks downstairs is operating in the hotel. They're looking at bringing back a full-service restaurant back into the restaurant space. They're in discussions to talk about bringing somebody in to look at the space underneath the parking deck, which is currently vacant. So if they're able to do everything that they want, it's exactly what the city needs.
We're still carrying debt service from the original deal, and will for the next 20 years. It's only about $1.5 million a year, but that's something that we still have to see the taxes on that block generated in order to pay that back. So we're in discussions with the new owners, and will likely bring forward at the next council meeting or redevelopment agreement that will talk about how we're going to work together to create the proper incentive structure for them to do everything that they want to do.
Back when those hotels were built originally, obviously the city had a vision for what it wanted that area to be with the (Peoria) Civic Center. So how does this move closer to that vision?
Urich: This continues that vision. I think the city all along – and this precedes me; I think this goes back to when the original discussion about (renovating) the Pere Marquette in 2008 – the city was interested in having a convention center hotel, a hotel that could be tied to the Civic Center. There's the (pedestrian) walkway; we wanted to have that connection just because it's so close to our Civic Center, to be able to generate the bed days of people staying in downtown Peoria and I think that continues and will continue for a very long time. It is in the city’s interest that we have hotels in downtown Peoria that can be there for Civic Center events and for other people that are coming to stay and visit Peoria.
How did the partnership with Childers to lease space in the Gateway Building develop, and what benefit does the city get from this agreement?
Urich: We've had the Gateway space for a long time, and when it was built, there wasn't a lot of events space in the community. We've seen over time that the demand for that space had wavered a little bit, and we had some discussions with Childers about possibly reinvigorating that space and doing something different with it, and we worked out an arrangement with them to do it.
They've been able to kind of lean in and refresh the space, and we're looking forward to their operating the space. So I think that's how we needed to look at it, is: how can we create a public private partnership that's going to work? We're very happy that they've decided to work with us on the space, and we hope that they're very successful.
We've heard the city is interested in buying a little piece of land from WTVP, and would also like to use some of the parking spaces. What are the reasons behind this and when might this happen?
Urich: So, in between WTVP and the Sealtest building is an area that's called Depot Street, and it's privately held in that stretch. So WTVP owns it, and they have parking in that area. But from Oak Street to Persimmon is where we're looking at extending Depot Street and then putting in 300 parking spaces. So we're looking at just acquiring a small construction easement that we'll need when we're doing construction, but then a small piece that we're going to need permanently, really at Oak Street where Depot Street would connect in to make the street a public street. So that's a small piece of property that we're going to need to acquire from them.
If I'm not mistaken, the city now owns the Avery building on the north end, why did the city purchase this property? And what are the plans for it?
Urich: So this property had been – the taxes had not been paid on this property, and it was getting ready to go through the process, and we talked with the county treasurer about acquiring it as an abandoned property. Once you go through that process of where a property has been abandoned and the taxes haven't been paid, the city can acquire that property; under Illinois law, that's something that we can do.
So we did that, we acquired the property. Our hope is to do some work in there and to get it ready to be leased up and/or sold. We're going to try and look at finding either a tenant or find somebody that will buy the building. There's a lot of parking that's involved with that, or in that building as well. There's really two buildings that are connected: there's the older Avery building that fronts Adams Street, and then there's a newer building in the back. But our hope is that we'll be able to find somebody that will lean right in and acquire the building.
What other noteworthy actions did the council take this week?
Urich: Well, in addition to adopting the budget, the city council had two redevelopment agreements on the agenda, one of which was with Distillery Labs. Distillery Labs, for some reason, the State of Illinois has made the determination that they should be paying property taxes on the old ICC (Illinois Community College) building that they're renovating. So, we worked out a deal to basically rebate them the taxes back. They’re a nonprofit that is there; they're designed to really focus on generating new businesses and focus on entrepreneurialism and downtown. We're an investor in Distillery Labs, so this was a way to really kind of pass that money back. They didn't anticipate that they'd have to pay taxes, so that's one thing that we were working on there.
Second, we have the Edgewater building, which is on the riverfront – literally on the riverfront. That is right next to – Ameren has a building at the corner of Liberty and Water Street, and it's right next to that building, right next to the old Hooters building. A developer is looking at putting in five luxury residences, as well as some other retail space, potentially. So we worked with them to do a redevelopment agreement where they'll get a rebate of about 50% of their taxes for the life of the TIF (tax increment financing) that they'll be paying. So it'll offset about probably 20% of the redevelopment costs that they have. But it's another good deal for downtown Peoria, and it shows, again, that there's still demand for residential development in Peoria.
With the budget now approved, there's no need for a special meeting next Tuesday now. So what's on the horizon for the next council regular meeting?
Urich: So I think at our next city council meeting coming up on (November) 28th, we'll probably have a redevelopment agreement with the owners of the Pere Marquette, and I then think there's probably going to be a few items that we'll have that we'll need to wrap up for the end of the year. But we're down to two meetings left: We have this meeting on the 28th, and then on (December) 12th, we'll be looking at the final meeting of December of the year – looking forward to starting the new year and leaning in on all those capital improvements.
