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'The City Finally Has a Future:' Pekin Pins Revitalization Hopes on New Business District

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Tim Shelley / Peoria Public Radio
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A wayfaring sign on Court Street in downtown Pekin.

The Pekin City Council approved the creation of a new Business Development District along the Court Street Corridor.

Council members didn't mince words Monday night, saying the city's previous reluctance to offer such incentives led to major retail developments heading instead to Peoria and East Peoria.

"This is an opportunity that hasn't come our way in a couple decades," said Pekin Mayor Mark Luft. "And if we pass up this opportunity, we're either going to stay completely idle - where you see Pekin right now - or it's going to continue to move backwards. And that's just the reality of it."

By Luft's reckoning, the city has missed out on at least $51 million worth of developments by "not staying in the game."

The Business Development District (BDD) created by the city council on Monday will impose a 1% sales and hotel tax increase to generate $3.5 million a year for economic development and capital improvements. To defer that new tax for residents, the council will reduce the city's property tax levy by 10%, and scale back capital improvement fees for sewer system upgrades over the next several years.

Luft said he doesn't think that added sales tax will make a difference.

"Anybody who's gone to Grand Prairie or the Levee District, when's the last time you walked into a retail store to buy something, to go get something, and when you walked in, you stopped at the service desk and asked what their tax rate was?" he asked.

Many council members echoed the thoughts of councilman Lloyd Orrick, who said the city is pinning its hopes of revitalization on this effort.

"I believe the city's finally going to have a future that it can help make brighter," said Orrick. "Because if you look back, the way we've went, from the mall, to half a mall, to empty. We've got a future, all right, but it's going downhill. And I believe this action will make that turn around, to where we'll start seeing a brighter future."

Many of the city's retail woes began with the closure and subsequent demolition of the Pekin Mall in 2002. The only vestige of that space, Bergner's, closed in 2018 when parent company Bon-Ton declared bankruptcy.

But Cullinan Properties, the owner of successor outlet East Court Village, sees an opportunity--provided the right incentives are in place.

Cullinan, which also was behind the Shoppes at Grand Prairie and the Levee District, said it's willing to invest up to $14.1 million to renovate the former Bergner's space to attract at least three new tenants, provided funds from the BDD and other loan and tax incentives are offered by the city.

Sean Garrett, Cullinan's manager of acquisitions, said there's several national retailers interested in the property, but incentives are needed to seal the deal.

"They have literally hundreds of opportunities across the country as far as where they want to locate their new stores," Garrett said. "So it's a really competitive market to attract new retailers."

Garrett said he's hoping to begin getting contracts signed soon, with renovation efforts hopefully beginning by summer 2021.

The incentives obligate Cullinan Properties to finish up the renovation work within two years. The firm also will donate an acre of land to the city for stormwater retention. Incentives cannot exceed the $14.1 million it is promising to invest in the former Bergner's property.

The hope is a revitalized Bergner's space leads to more energy at East Court Village and the Court Street corridor at large.

"If you bring an anchor, the others will follow," Garrett said. "The three retailers we're hoping to bring here, this will be an anchor to the entire development. And then with that, there will be spinoff opportunities to attract to East Court Village Shopping Center and the city of Pekin."

Council member Karen Hohimer called the BDD a "win-win" for Pekin, citing multiple people she's talked to about the proposal recently.

"They said 'it brings in money, but it also brings in people who want to move to Pekin, who want to move here, and want to send their kids to school here,'" she said.

Councilman John Abel noted the BDD strategy has worked well for East Peoria.

"We always get told, why does East Peoria get this, and we don't? Why do they get this, and we don't? They have three business development districts. It's our time to step up," he said.

For his part, Luft said bolstering the city's retail presence has been a major priority since he was first elected to the council in 2015, noting it's no longer possible for a city to attract these businesses without incentives and momentum.

"I can't buy this jacket that I'm wearing in Pekin. So I have to go somewhere else and buy it. So I have to give them our BDD money. I can't buy these shoes here, either. We're the largest community in the county, and you can't buy a pair of dress shoes or a suit in our town. It's time for us to step up and take the lead, and put ourselves back on the map."

Luft called the BDD creation vote the most important the current council has taken since it was formed 17 months ago.

Council members Rick Hilst and Michael Garrison voted "no." All others voted "yes."

The new BDD sales tax and corresponding relief measures go into effect July 1, 2021.

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Tim is the News Director at WCBU Peoria Public Radio.