A state-sponsored economic development incentive could facilitate a revitalization and transformation of the Northwoods Mall site in Peoria.
The city intends to establish an Illinois STAR Bond District, which stands for sales tax and revenue, with the hope of attracting destination-based retail, entertainment and tourism opportunities.
“This is a huge opportunity for Peoria for economic development, for tourism, for entertainment,” said Mayor Rita Ali.
“I think it allows us to reimagine the Northwoods Mall area and what it can be in terms of housing, entertainment, recreation, tourism, retail, commercial — all those exciting things — in the center of our city.”
The STAR Bond program, managed by the state's Department of Commerce and Economic Opportunity [DCEO], allows a portion of future sales tax generated by the new development to be reinvested toward covering eligible project costs, such as public infrastructure.
The city would be able to repay money bonded for development costs through incremental or new sales tax collected within the district, while the state would pledge all or a portion of the incremental sales tax collected to service the bonds that will finance the development.
Assistant City Manager Kimberly Richardson said Northwoods Mall, built in 1973, is an ideal site for a STAR Bond district to spark major construction efforts.
“The area that we’re looking to create the bond makes sense. It’s located adjacent to a highway, and it also meets our criteria related to the parcel ownership,” Richardson said in her presentation to the Peoria City Council during this week’s meeting.
“So the area would be the mall itself, along with the adjacent properties that the mall ownership currently owns.”
Richardson said the STAR Bond program is intended for projects much larger than developments using tax increment financing [TIF District] incentive.
“Your capital investment has to be at minimum $30 million over the course of the of the of the plan,” she said. “You have to bring at least $60 million in revenue and bring in 300 new jobs.
“Now, the bond does have a limit: You can either have 50% of the cost of the project or $75 million, whichever is less.”
Currently, the only active STAR bond district exists in downstate Marion, where city officials are working to turn the stagnant Illinois Star Centre Mall into a retail and entertainment hub called “The Oasis.”
Richardson said the STAR program was expanded statewide last year, with Peoria in the designated “central region” that can have up to three projects.
“As of today, we know that we’re the only ones that are going to be moving forward with a project that is required to be submitted to the state by Jan. 1,” said Richardson.
Summit Properties USA, the owner of Northwoods Mall, has expressed interest in redeveloping the property to add more retail and other opportunities. Summit has been identified as the project’s master developer.
Many council members expressed strong support for the idea.
“I’m very enthused about this as well,” said Tim Riggenbach. “We talk about the state of Illinois and the burden that we often feel. Well, every now and then they come up with an idea like this.”
“Overall, I’m in support of this type of funding mechanism because it’s utilizing tax dollars that are generated here and coming directly back here to our local area,” added Alex Carmona, who typically opposes using public tax money to incentivize developers.
“I think this is actually a very proper one that will come back to our city for nothing but benefit.”
The city council unanimously approved setting a Dec. 8 date for a required public hearing that would be the initial step in a lengthy approval process.
“We need to really do something big, something major, to really revitalize and transform this property, and STAR bonds can be the answer to help us to accomplish that,” said Ali.
Northwoods TIF expansion
In a separate matter, the council approved the three necessary steps to expand the current Northwoods Mall TIF District that was established earlier this year.
The move adds a contiguous stretch of commercial and residential property along the Sterling Avenue corridor, southward from Interstate 74 to Newman Parkway.
“I believe that was the right move, and it’ll be great for Districts 1, 2, and 4 — and the entire city of Peoria — as we look to ensure that this gray area of our city maintains strong and stable,” said council member Andre Allen.
All three portions of the agenda item passed on 9-2 votes, with Carmona and Kiran Velpula opposed.
