A newly created economic incentive area aims to spark redevelopment along Peoria’s West Main Street corridor.
Yet, the city council member for the district that contains most of the target area was the only one voting against establishing a tax increment financing [TIF] district.
“I find myself in a really hard position because obviously I know this is my district,” District 2 council member Alex Carmona said during Tuesday’s meeting. “I love Main Street. I love Bradley University. I want that corridor that goes all the way down to the [Illinois] river to be awesome for everybody. But it’s going to come at a cost.
“Like I said, if this works out well, that whole area will be paying an exorbitant amount of taxes when this is all over. Their property values will increase, taxes will increase, the neighborhood’s property values and taxes will increase.”
Carmona’s remarks prompted an immediate pushback from Mayor Rita Ali.
“I have to say, I disagree with 99% of what you just said, and I don’t know what that 1% is that I agree with,” said Ali. “But we are not increasing property taxes, and this is not intended to increase property taxes. We are working to improve our economy.
“Doing nothing does not help growth in our city. This is an area of our city that needs incentives; it needs growth and development.”
The West Main TIF area extends generally between Monroe and University streets, from the downtown business district to the Bradley campus. The city’s intention is to remove blight and stimulate economic growth.
While a TIF is active, tax revenue generated above the original tax base level is set aside for reinvestment within the TIF district. An assessment of the West Main district prepared by Jacob & Klein and The Economic Development Group projects the generation of nearly $55 million in cumulative tax increment over the 23-year life of the TIF, with anticipated private investment of $82.7 million.
“TIF funds are also utilized to make public improvements inside the TIF district that would not necessarily come from the general fund of the City of Peoria or from our general capital dollars. In order to do that,” said City Manager Patrick Urich.
“This is designed to grow the tax base; that’s what TIF districts fundamentally are established for, is to grow the tax base. They’re not designed to grow the tax rate. A developer, a private developer, invests in their property, and they receive a portion of their higher value that the taxes that they’re paying based on that higher value comes back to them in a form of reimbursement.”
The city council’s action included three approvals: adopting the redevelopment plan, identifying the project area and setting up the financing mechanism. All three measures passed on 9-1 votes, with Carmona dissenting and Denis Cyr still on a leave of absence.
Carmona said he believes inflation is causing an artificial increases in property values, consequently forcing owners to pay more in taxes.
“What it looks like [for] us to our rising property values is actually just a diminishing of our buying power,” he said. “This is one of the reasons why I’m against this, because that increment is going to grow, and show false organic growth.”
But council member Tim Riggenbach said Peoria’s TIFs have already proven successful in generating redevelopment, pointing to the Warehouse District and the East Village Growth Cell.
“I think we all hear a lot about TIFs and some horror stories and some success stories, and I think in the last number of years, this council has gone a long way in ensuring that our TIFs are more successful than they were 30 years ago,” said Riggenbach.
“I simply look at it as, ‘Where would we be without the TIF?’ We’d be where we are now,” added council member Mike Vespa. “But with the TIF, I expect, based on past successes, that we’re going to be generating money, and that money is going to come from outside. And that money is going to be creating more jobs, keeping our people employed, and these are all good things for the city.”
Although he voted to approve the West Main TIF, council member John Kelly said he remains skeptical of their true impact.
“I don’t think they really have created that much for us,” he said. “I think we’re at a point in TIF administration that it’s not probably going to do any harm. I’m not so sure it’s going to do much good, but I don’t think it will do harm.”
“A lot of what I’ve heard in this discussion was either theory, philosophy, or just plain inaccurate on both sides of this argument,” said council member Zach Oyler, expressing that inaction would be detrimental.
“We’ve had and continue to have several areas which are extremely affected by blighted buildings and challenged neighborhoods and difficult economics, and the reality of the situation is that developers need the TIF incentive funding to make the economic deals work.”
In a separate action, the council approved scheduling an Oct. 27 public hearing for a proposed amendment to the Northwoods Mall TIF District. The amendment would increase the size of the existing TIF to include properties along the Sterling Avenue corridor between Interstate 74 and Newman Parkway.
