Peoria recently agreed to spend $1.75 million to buy the downtown PNC Bank Building, along with an adjoining office building and parking deck.
But the deal has raised some eyebrows, partly because Cullinan Properties paid $500,000 less for the buildings just four months ago.
In part one of our latest monthly interview with Peoria Mayor Rita Ali, she explains the benefits of the acquisition and how the purchase agreement materialized.
In Thursday's second part of our interview, Ali addresses the city's anti-violence efforts and the demise of the Cure Violence initiative.
This transcript has been edited for clarity and brevity.
The City Council just agreed to buy the PNC Bank Building and two adjoining properties for $1.75 million. How did this deal with Cullinan Properties to purchase these “Tower On Adams” properties materialize?
Mayor Rita Ali: It came about when we were approached by Cullinan Properties about their recent purchase of the building, back in April or May. We had hoped that they were going to develop the building, especially the PNC Building and possibly the parking deck.
But we had decided that our teams and their teams would work together to kind of brainstorm possibly a joint effort or the city providing some guidance on the tools that we had available for developers. Ultimately, they decided that they did not want to go forth in developing the building, and they decided that they wanted to sell all three of the structures.
How do you respond to speculation that this is somehow some sort of sweetheart deal that's been arranged for Cullinan, where they're profiting a half-million dollars after only owning the property for four months?
Mayor Ali: Right, well, they claim that there's been no profit gained from the sale, that they had a lot of expenses that they put into the deal over the several months that took place. I don't know; I can't verify that.
But I do believe that the price that the city is going to purchase the buildings for is a very fair price. I do believe that when they acquired the properties at $1.2 million – that that was the sweetheart deal, that they really got it for a great price.
We know that there's interest from developers. We've been contacted already from developers that are interested in this facility, this building. Our interest is primarily a combination of commercial and residential units.
That's the trend; that's what's happening in progressive cities across the nation. This building would be an ideal place for people to live and shop and have conveniences, such as retail or boutiques right in that historic building. It's an amazing building.
How concerned are you about some sense in the community that there's already too much commercial vacancy downtown and this might not be as smart an investment?
Mayor Ali: I just want to provide some assurance that part of our strategic plan is to bring life back to downtown Peoria. This gives the city control over this major building, in terms of who's going to develop it – making sure that we get the right developer that's not going to let this building just sit and rot and decay over time. We want something to happen fairly quickly, we want to keep it moving.
By purchasing the building, it does give the city that sort of control. We want a thriving downtown. We want to turn these buildings that are – some of them have more vacancy after COVID, because more people aren't working downtown like they once were.
But people do want to live downtown, and this is an opportunity to take a structure like this that is partially vacant right now – it has a few tenants in it, but has a lot of vacancy now – and to turn it into a combination of commercial and residential facilities.
You touched on it, but exactly what kind of development do you envision for these properties? How do you approach developers about those intentions?
Mayor Ali: I think we share a vision, and I'm very interested in the city providing an “open house.” Certainly it’s going to be a competitive process for developers to bid on, but I'm interested in opening the building up, allowing developers to come in especially, but even those (people) that are interested in seeing what it looks like on the inside these days, to be able to have an open house, to be able to come in and look at the possibilities for what this might become.
Again, our interest is a combination mixed-use with residential and commercial uses, because that's what's happening. That's what's working; that's where the interests are in our downtown as well as downtowns throughout the country.
Some of the council members expressed, aside from the importance of the building, that the parking structure is also very vital, particularly with its proximity to the Peoria Civic Center. Do you anticipate that the city would possibly retain or share ownership of the parking structure?
Mayor Ali: I think that's a possibility. Certainly, anyone that develops the PNC building itself is going to want parking and that’s the parking facility that’s most reasonable. The Peoria Civic Center also has parking needs, and that's right across the street from the Civic Center and the Civic Center parking lot.
So it makes sense that it may be owned by the developer with some shared parking spaces from the city. We've done that with other lots that were commercially owned by private entities.
What are the conditions of these buildings and the parking deck itself, with the due diligence that's going to be required?
Mayor Ali: We already know that the parking deck is going to require some maintenance and some upgrading. That maintenance and upgrading will likely be over half-million dollars, maybe $1 million. But it definitely needs some investment and some work.
Again, we're looking at who's interested in the package of three, or maybe it has to be unbundled. It was purchased as a bundle, but perhaps it has to be unbundled and there might be interest in the Creve Coeur Building as a separate project.
City manager Patrick Urich said that this is anticipated to be a short-term public ownership, relatively speaking because with the historic tax credits, there is some time component to that. But what is your anticipation for how long the city would retain ownership, and what's your expectation for return on a $1.75 million investment?
Mayor Ali: Well, I would say less than a year. I'm not going to say six months, because I don't want to lead anybody with false expectations. But I would hope that within a year that it would change hands to a private developer.
We're probably going to get some help from Downtown Development Corporation. They're good at attracting developers, and we hope that others will spread the word and attract developers that will be willing to invest and that we can get a return on our investment.
