Tariffs put in place by the Trump administration could mean less purchasing ability for the City of Peoria.
City Manager Patrick Urich says the biggest concern for municipalities from the president’s fluctuating trade policy is if the broad tariffs on goods result in increased inflation.
“Higher inflation isn't good for a number of reasons, and one of those is that the city's buying power when we're trying to build infrastructure projects is diminished and we have to spend more money for the same project,” said Urich.
“That's something that is a concern for us, so we'll keep an eye on that and have to watch. But as of right now, it's just probably too early to tell.”
At this week’s Peoria City Council meeting, Finance Director Kyle Cratty admitted there is some trepidation regarding how tariffs resulting in higher prices on consumer goods could have a negative impact on the city’s tax revenues.
“It’s definitely a concern I have. Obviously, there's been a lot of information put out in the investor community about what the impact of this has, and I think the ‘R’ word [recession] has been thrown out a few times,” said Cratty. “Usually what that means, right, is uncertainty, it can mean people hold their money. So it will be something we continue to watch.”
Cratty said he’s initially watching for returns on hotel, restaurant and amusement tax revenue, because those figures have only a one-month lag compared to a three-month lag for sales taxes.
“So if we start to see some weakness in our hotel receipts or our restaurant receipts, I think that's going to be the leading indicator of, okay, maybe there's some trouble coming.”
Urich says city administrators also are keeping an eye out regarding how the Trump administration will handle funding for cities like Peoria that have a Diversity, Equity and Inclusion Office.
“They're starting to send out some guidance, but we don't have clear direction yet on a number of fronts, whether that's justice grants, infrastructure grants, environmental grants,” he said. “We just don't know yet, so we'll see.”
While the Trump administration has taken steps against DEI initiatives on several fronts, embracing Diversity, Equity and Inclusion is one of the six priorities identified in Peoria’s five-year strategic plan.
Earlier this month, concerns over potential impacts on federal grant funding led two council members to vote against the city’s donation of a fire truck to an organization assisting relief efforts in Ukraine.
PNC Bank Building update
Urich said Peoria is still working on the Request for Proposal [RFP] for downtown's PNC Bank Building.
The city council approved a $1.75 million purchase of the building from Cullinan Properties late last year. Urich says they're fine tuning the RFP to find the right developer.
“I'd hoped that it would have been out a month ago, but we've had some additional work that we wanted to do on that,” said Urich. “I think we'll be getting it out here in the next couple of weeks, and getting it out to the public so that interested developers can take a look at it.”
Council members defended the purchase saying it was important the historic building – and the associated tax credits – end up with the right developer. Some want to avoid a similar situation to the Chase Bank building, which has been swamped in code violations with an unresponsive owner.
Urich said the city had no involvement in the recent sale of the historic Spurck Mansion because it’s a private transaction.
“We'll make sure that the new owner knows some of the challenges with the building,” he said. “But as long as they're building it to code and making the improvements to the property that any other private developer would do when they buy a piece of property, that's something that is between them. Certainly we'd love to see the property developed.”
The more than a century-old property on Knoxville Avenue has been in a state of disrepair for several years following a fire in 2019. Developer Kim Blickenstaff’s KBD Group sold the mansion to a California firm at a loss earlier this month.
New city council
While results of this month’s election are not yet official, it appears most of the current city council will remain intact when the new terms begin May 6.
“Certainly when you have most of the elected officials coming back, I think that really helps from a continuity standpoint. People know what we've been working on,” said Urich.
The only seat that’s certain to change is in District 2, where Chuck Grayeb chose to run for mayor instead of seeking another term. The race between Alex Carmona and Estrella Diaz to fill the vacancy remains too close to call.
Urich said the city staff has a duty to work in tandem with whomever the elected officials may be.
“We want to make sure that they are fully informed about what's going on, so that they can make the best decision on behalf of the residents and the citizens of Peoria,” he said.
“That's something that we're certainly prepared to do. We'll do a deep orientation, as we always do, and try and get the new council member – or members, as the case may be – up to speed.”
