The City of Pekin purchased the 1,000-acre Lutticken Farm property last July for $14 million to open the door for economic development in the northern end of the city, and hasten the planned extension of Veterans Drive to Interstate 474.
Western Hospitality Partners [WHP] walked through the door Monday when the Pekin City Council approved the sale of about 321 acres of the Lutticken property to the New York City-based company for $4.5 million [$14,000 per acre] so it can build a data center.
"We are seeing the future of our city," said Mayor Mary Burress.
The numbers associated with the data center are staggering.
The estimated annual property tax revenue that will go into Pekin's coffers when the data center is fully developed, in about five years, is $20 million, said Josh Wray, Pekin's economic development director.
More than 100 full-time employees are expected to be hired by that time.
Construction of the data center, which will have customers around the world, is expected to add more than $2 billion into the regional economy, Wray said, through construction jobs and building materials sales.
Wray said $2 billion is a conservative estimate.
"I think the actual regional economic impact of construction will be $5-$6 billion," he said.
WHP does have benchmarks it must meet, which pleased council member Dave Nutter.
"There are claw backs in the deal, which changed my vote from no to yes," he said. "We got it right this time."
Among the "claw backs:"
- WHP must provide $50,000 in nonrefundable earnest money that will be applied to the purchase price upon closing.
- Construction of the first building must begin within 18 months of closing, or the city can reverse the deal.
- Construction of the first building must be completed within 18 months of receiving the first building permit, or the city can reverse the deal.
- At least two buildings must be constructed within five years, or the city can reverse the deal for the undeveloped property.
- WHP has a nine-month due diligence period to work with utilities and do the required land studies at its cost. Two three-month extensions of the due diligence period are available.
City staff and WHP will negotiate a TIF funding agreement during the due diligence period.
"Given that this development will extend water, sewer, electric and natural gas to the Lutticken property at no upfront cost to the city, staff finds this (TIF) request very tolerable," Wray said.
Council approved the sale agreement 6-1, with Rick Hilst voting "no."
To clear the way for the sale of the land to WHP, the city will take out loans totaling $12.5 million from Morton Community Bank to complete the $14 million payment to Mary Jo Brundrett, owner of the Lutticken property.
"These loans show how far our city has come financially," Burress said. "Two years ago, no bank would talk to us."
The city originally intended to spread out payments for the Lutticken property over four years, but Brundrett asked that the city make the full payment for the property once it began selling land.
Brundrett will receive $12 million from the loans. The additional $500,000 is for costs ancillary to the city's purchase of the property like surveys, title work, legal fees and closing costs.
The first loan payment of $1.2 million is due in May 2026.
Proceeds from land sales on the Lutticken property will pay down the loan. Completion of audits of city budgets for past fiscal years will lower interest rates for the loans.
While the loans are for 20 years, the city hopes to pay them off with a balloon payment in the fifth year.
The council approved the loans 4-3, with Lloyd Orrick, Hilst and Nutter voting "no."
Last month, Pekin sold 66 acres of land in the Riverway Business Park to Singapore-based Epic Medical, which plans to build a $25 million medical equipment manufacturing facility there.
Longtime City Clerk Sue McMillan honored on the night she dies
This is Professional Municipal Clerks Week.
Sue McMillan, Pekin's city clerk since 1994, could not be at the council meeting Monday to be honored because she was ill, Burress said at the beginning of the meeting.
Burress said Tuesday that McMillan died at 9:12 p.m. Monday.
In addition to being involved in thousands of ordinances, resolutions, policies and meetings, Burress said, McMillan swore in every active Pekin police officer and firefighter.
"Most importantly, Sue probably helped almost every resident and business person in the community at least once, and she did it with her wonderful smile," Burress said.
Burress asked for a moment of silence at the start of the meeting to pray for McMillan and the families of 21-year-olds Chase Rhoads and Dawson Reese of Pekin, who were shot to death last week in rural Pekin.
"It's been a tough week for our city," Burress said.
Good Energy will look for good deal for residents and small businesses
Pekin residents and small businesses could soon be seeing a reduction in their electric supply cost.
That's because council Monday authorized city staff to re-engage with energy broker Good Energy of Peoria, which will be tasked with developing an 11-month aggregation program for the city with an electric energy supplier at a rate of no more than 11.1 cents per kilowatt hour for the length of the program.
The city's current aggregation program rate, negotiated by Constellation Energy, is 11.989 cents per kilowatt hour.
After the 11-month period ends, Pekin can join with other area communities for a longer aggregation program, normally two to four years.
Pekin residents and small businesses can opt out of an aggregation program and get their electric supply from Ameren, which has seasonally adjusted rates.
Good Energy was the city's energy broker at the start of its aggregation program in 2012 and according to city staff, saved residents and small businesses a cumulative $2.55 million -- compared to Ameren's rates -- until 2023.
Since 2023, the program under Constellation Energy has cost residents and small business owners $4.9 million compared to Ameren's rates, according the city staff.
The vote for a new electric supply agreement was 6-1, with Hilst voting no. He said he'd like residents to be able to opt in instead of opt out of an aggregation program.
During public comment, Pekin resident Matthew Johnson said he's against aggregation programs in general because "the government (in this case, the state) shouldn't tell people who to do business with."
Vacant building at 'dangerous' intersection to be demolished
A vacant building at the corner of the problematic intersection of Court and Washington streets will be torn down, and the city will then purchase the property.
Property owner John Neuman agreed to pay for the demolition of the former lawyer's office at 1024 Court Street, then leveling and seeding the ground.
In exchange, the city will pay Neuman $117,500 for the vacant property. Council approved the purchase 5-2 on Monday.
The property was appraised recently at $114,000. City Manager John Dossey acknowledged the appraisal was done with the building on the property, but he said it would have cost the city at least $60,000-$70,000 to demolish the building.
Council member Karen Hohimer said the intersection will be made safer as part of the Court Street rehabilitation project, and taking down the building will make it even safer. Wider sidewalks also will be built there.
"I've thought for many years that the intersection there is dangerous," Hohimer said.
Bryce Beckstrom, project manager for Hanson Professional Services of Peoria, told city staff that the building at 1024 Court St. reduces the sight distance in the intersection, so taking it down will improve safety.
Hilst and Orrick voted no on the property purchase.
Cannabis dispensary getting a $100,000 forgivable loan for renovation expenses
Council also approved these items Monday (no votes in parentheses):
- A Pekin Business Development District redevelopment agreement with Bracts LLC, which plans to open a cannabis dispensary downtown at 359 Court St. Bracts will receive a $100,000 forgivable loan from the city that will help defray the estimated $900,000 renovation cost. The loan is for two years at 5% interest, but payment will be forgiven each year if the dispensary generates at least $50,000 in cannabis tax revenue for the city. Bracts officials estimate the dispensary will generate $120,000 in cannabis tax revenue in each year. The revenue will go to police and fire pension costs. Bracts paid $297,000 for the building. The vote was 6-1 (Hilst).
- A three-year consulting services agreement with Texas-based Retail Strategies, which connects municipalities with national retail chains that are looking for new locations. The city will pay Retail Strategies $50,000 in the first year of the agreement and $45,000 in the second and third years for a total of $140,000. In his pitch to the council to hire Retail Strategies, Wray said an average McDonald's restaurant generates about $3 million in annual revenue, which equates to $172,500 in sales tax revenue for Pekin, more than the total cost of the agreement. The vote was 6-1 (Hilst).
- A three-year economic development marketing plan prepared by McDaniels Marketing of Pekin that focuses on attracting businesses, developers and residents to the city. McDaniels will be paid an estimated $184,695 over three years. The vote was 5-2 (Hilst and Nutter).
- A two-year contract with the Pekin Area Chamber of Commerce for management and staffing for city-sponsored tourism events. The chamber will be paid $21,900 in the 2025-26 fiscal year and $22,560 in the 2026-27 fiscal year. The flat fee will save the city about $5,000 annually. The vote was 6-1 (Hilst).
Court Street cost: $9.5 million
Council unanimously approved these items Monday:
- The award of a $9.5 million contract to low bidder Otto Baum Company of Morton for the Stadium Drive to 10th Street portion of the Court Street rehabilitation project. The city is responsible for $7.7 million of the contract for the two-year project with Illinois American Water picking up the remaining $1.8 million for water main work.
- A one-year lease extension for 10 school buses leased from Midwest Transit Equipment of Kankakee. The payment of $225,816 is due July 15. Leases on all 73 school buses used by the city will expire in July 2026. The city is exploring options to maintaining a school bus department.
- A payment of $71,101 to Texas-based Tyler Technologies to renew the use of its school bus routing software.
- The installation of a flow meter that will more accurately measure water from North Pekin that goes to the Pekin wastewater plant. Cost is $25,909. North Pekin also is replacing its flow meter through Pekin-based Britton Electronics & Automation in an effort to end the reading discrepancies between the two former flow meters, which were different types of meters. Pekin will attempt to recoup the cost of its new flow meter from North Pekin after the meter is installed.
- Payment of a not-to-exceed $45,000 to Wisconsin-based Hasting Air Energy Control to retrofit the Plymovent diesel exhaust extraction system in each of the three fire stations. Each system is more than 20 years old.
- Burress' reappointments of chairperson Drew Leman, Jack Steger and Liridon Rrushaj to the Pekin Economic Development Advisory Committee.
