The City of Peoria is considering a funding plan to help the Twin Towers Place downtown condominiums pay for necessary repairs and renovations.
But City Manager Patrick Urich points out that no money has been allocated quite yet. Rather, Peoria may look to establish a special service area [SSA] to generate the estimated $2.5 million in funding.
“They had a fire a number of years ago that exhausted all of their reserves, and they approached us – at the same time, we were doing work in the parking structure,” said Urich. “So we knew that they had some work that they were obligated to pay for there.
“We knew that they had some challenges from a from a cash flow standpoint. They also had some challenges from a financing standpoint because many of their lending institutions weren’t comfortable with just loaning them money to be able to do that.”
Urich said the SSA designation gives municipalities “an enormous amount of flexibility” to levy funds for providing services within a defined geographic area. Peoria has used SSAs in several other locations, such as around Junction City, the Louisville Slugger sports complex, and the Westlake and Grand Prairie shopping centers.
“In this case, we have a neighborhood – the Twin Towers condo association – that instead of having streets to maintain, they have fire suppression systems to maintain because instead of a horizontal neighborhood, they are a vertical neighborhood,” said Urich. “There are a number of properties in there that are going to be paying back any money that is put up front to make the improvements on the property over time.”
Should the SSA get approved, Urich said the city is still deciding whether to front the funds for the Twin Towers repairs by using a city bond or a bank loan. But he says Peoria would be paid back in full over time through the condo residents’ property taxes, and the city’s financial risk would be minimal.
“Property taxes generally get paid at about 98%, so they’re generally paid at a really good level. We feel that we would have adequate security with them,” he said.
“If we do a private loan, then all we are is the financing mechanism and there’s no city dollars involved. In fact, other than us issuing a bond, from our credit standpoint, that’s really the only exposure that the city has.”
Urich points out the city still needs to approve the creation of a Twin Towers SSA, with the first step in the process being a public hearing scheduled for July 14.
“That gives us time to send notice to all the affected property owners,” he said. “Those affected property owners have the ability, if a majority of them decide that they don’t want us to proceed with this, then that will stop the process – and we can’t start that process back up for two years.”
