A group of 12 hotel owners in Peoria want the city to become one of the first Illinois communities outside of Chicago to establish a Tourism Improvement District.
The district would add a 1.5% fee on short-term sleeping room rentals, with the proceeds used to support initiatives to promote Peoria as a destination and attract more overnight visitors.
“Peoria faces a significant challenge. Investment in tourism has not kept pace with either inflation or competition, and our hotel partners have taken notice,” said JD Dalfonso, president of Discover Peoria — the branded name of the Peoria Area Convention and Visitors Bureau.
“In practical terms, we’re trying to compete in a much more expensive marketplace with fewer effective resources. At the same time, competing Illinois destinations are investing more aggressively.”
Dalfonso spoke during a public hearing on the proposed Peoria TID during Tuesday’s regular Peoria City Council meeting. The council is expected to take action on the proposal at the Sept. 23 meeting.
“We’re not asking this council for any money, but for the opportunity for Discover Peoria to work directly with our hotel ownership to generate more revenue for them, and in turn generate more hotel tax revenue for the city of Peoria,” said Dalfonso.
The proposal was crafted with guidance from the consulting firm Civitas Advisors, which assisted with more than 200 TIDs across the country, including the one in Chicago.
“Return on investment for cities and hotels is proven, which is why the destinations in Illinois and the lodging industry here have embraced this model,” said Tiffany Gallagher, Civitas vice president and deputy executive officer. “They are private-public partnerships that use an assessment rather than a tax, which ensures and secures benefits to the hotels and the partner city.”
The 12 hotel owners that petitioned the city in support of the TID satisfied a statutory requirement needing agreement from half of the entities subject to the tax.
“One of the most important elements of a TID is the buy-in and oversight from the hotel industry itself,” said Keenan Irish, vice president of government relations for the Illinois Hotel and Lodging Association.
The proposal calls for a five-year initial term, with possible renewal for up to 10 years. Dalfonso said estimates anticipate generating $700,000 in the district’s first year.
Rick Gaa spoke as a representative for Petersen Hotels and the Louisville Slugger Sports Complex.
“This is a very, very big deal for us as it pertains to Louisville Slugger,” said Gaa, noting the facility along Orange Prairie Road received national recognition four years ago. “These complexes are popping up all over the country. We’re surrounded now.
“Over the last 10 years, we’ve had about 3 million people come through our complex. It’s been about $100 million of economic impact, and we need JD and his team to have this tool in their toolbox.”
Matthew Dees, the owner and operator of the Travelodge hotel in the city, urged the council to proceed with caution.
“I’m supportive of this, but I want to caution everybody to really let’s make sure we get the results,” said Dees. “Let’s get the business in here, and if we don’t, then we should stop this tax.”
Other business
In an item pulled from the consent agenda, the council voted 9-1 in approving a $330,000 increase to the HOME-ARP grant funding for the Phoenix Manor permanent supportive housing development on the South Side.
In December 2022, the city originally approved an award of just more than $2 million to Phoenix Community Development Services to cover administrative costs when the residential project for homeless families was initially planned for a site on St. Mark Court, near OSF Saint Francis Medical Center.
The change allows that original allocation to be used instead for construction expenses, with the additional amount allowing for additional brick on the new building’s façade.
Council member Denise Jackson, who represents the First District where Phoenix Manor will be built on Krause Avenue, remains opposed to the development. She pulled the item from the consent agenda and cast the lone vote against the funding increase.
Separately, the council unanimously approved acceptance of multiple grants for the Peoria Police Department, highlighted by a $2.5 million competitive award from the Illinois Criminal Justice Information Authority [ICJIA] to continue the co-responder pilot program.
“We cannot stress enough how important it’s been to not only the Peoria Police Department but the citizens and the community of Peoria,” said assistant chief Erin Barisch. “It’s really designed to help victims. Victims that have gone through violent crimes, relocation.
“It helps offset the cost of vehicles, mental health services, relocation for victims of violent crimes, assistance that they may need.”
The other award amounts were: $361,000 from the Secretary of State’s office for continued operations of the Greater Peoria Auto Crimes Task Force [GPACT]; $154,000 from the Edward Byrne Justice Assistance Grant Program to allow for the purchase of 35 police helmets; and a $52,000 Organized Retail Crime Grant from the Attorney General’s office.
In unfinished business, consideration of a city code amendment to enhance enforcement against chronic nuisance properties was deferred for another 30 days to allow more time for staff to work on the proposal.
Peoria Area Association of Realtors president Leslie Rothan spoke out against the chronic nuisance ordinance update during public comments.
“Your proposed amendments don’t pose enough concern simply on the basis of fair housing issues,” said Rothan. “The effect and end result of your proposal could result in higher rents and fewer units available.”
