An 11-story downtown tower, a neighboring office building and an adjacent parking garage may soon become properties owned by the City of Peoria.
City manager Patrick Urich says the city has a deal in place to purchase the PNC Bank Building, the Creve Coeur Building, and the parking deck from Cullinan Properties for $1.75 million.
“We had some discussions with them about future development, and that led us to the city talking to them about purchasing the properties from them, and then working to find a developer that would take the properties and look at doing a mixed-use development project there that would include residential and commercial,” said Urich.
He said having the city buy the properties will allow them to take advantage of some development incentives.
“We looked at it as there's an opportunity to utilize the state and federal historic tax credits in the project, but that necessitates a longer holding period of the project after it's complete just in order to satisfy the requirements of the tax credit project,” he said. “That's not really something that Cullinan Properties wanted to do, which is understandable.”
Urich said the PNC branch and accounting firm CliftonLarsonAllen are the only tenants in the high-rise at 301 SW Adams St. He said the four-story Creve Coeur Building at 304 SW Jefferson Ave. is currently vacant, and the parking facility has approximately 450 spaces.
The proposed purchase is slated go before the City Council at next Tuesday’s meeting. Urich said Peoria does not intend to keep the properties long-term.
“We're also asking the council for some money for some due diligence work just to do some assessments of the property,” he said. “Then our staff is working on a developer solicitation in order to try and find someone to come in and do the type of development and leverage all the potential tools that are there.”
In May, Cullinan Properties purchased the three buildings for $1.25 million from New York-based Ladder Capital Corp. But in the ensuing months, Cullinan and the city were unable to finalize a redevelopment agreement.
Urich said he believes the city’s $500,000 price increase over what Cullinan paid less than four months ago is justified.
“Obviously, Cullinan incurred some costs that were involved in that by hanging onto the property and doing their due diligence, and we recognize that,” he said. “And as the discussions went forward, in order for the city to control the block, this is the price that we agreed to.”
Public records show the property was acquired by 301 Peoria LLC for $208,000 through a quit claim deed in Sept. 2019. Before that, it sold for $2.65 million in 2016 and $5.95 million in 2008.
Urich said the city will borrow money from its general fund for the purchase that will be repaid through the development’s future Warehouse District TIF proceeds. He said he’s optimistic the move will lead to a desirable project.
“We feel that there will be interest, and with the type of tools that are available for development, we'll be pretty aggressive about trying to find a developer to come in and work on the project,” he said.
