With new historic tax credits and more than 15 projects in progress, the redevelopment of downtown is well on its way.
Last August, I introduced iBi readers to the Downtown Development Corporation of Peoria. Since that time, the DDC has been making progress in its goal of redeveloping Peoria’s downtown. As of the writing of this article, we are currently working on more than 15 development projects, three quality-of-life projects and one infrastructure project, as well as partnering with more than 10 properties to find developers. With the financial support of over 60 businesses, we are actively engaged with the City of Peoria in facilitating development in the downtown.
Historic Tax Credits
In September, the City of Peoria’s application to add Peoria’s Warehouse District to the National Register of Historic Places was approved by the National Park Service. With this designation, federal and state historic tax credits became available for the rehabilitation of properties considered contributing structures in the Warehouse District. These credits reimburse developers for 45 percent of their qualified development costs. The DDC has assisted in this process by sponsoring workshops for property owners and developers, and coordinating site visits by the Illinois Historic Preservation Agency to perform an initial walk-through of more than 12 buildings, several of which are proceeding with construction this spring.
Through this process, we have identified issues that need to be resolved for these tax credits to be fully utilized. Many medium to small developers are unable to take full advantage of these tax credits without the assistance of investors who can utilize them. The DDC has identified experts in this field who have brought investors to the table who can utilize these credits. We are also developing a pool of local investors who can participate with these developers and take advantage of these credits—local investors assisting local developers, keeping the economic benefits here in our community.
In addition, the State Historic Tax Credit program ends on December 31, 2016. The DDC is assisting the City of Peoria in its efforts to extend the program and to seek minor changes in the legislation so more property owners can take advantage of its benefits, and more of these historic buildings can be rehabilitated, preserving the structures and providing economic benefits to the city and the state.
Residential Units in the Downtown
One of our primary focuses has been to encourage the number and diversity of residential units in the downtown. We know there is unmet demand, as the Tracy Cross & Associates study, updated in 2013, found sufficient demand for downtown housing to support the development of 210 new units every year for more than five years. This spring, we expect to see close to 200 new residential units under construction in the Warehouse District, and are likely to have another 200 to 300 new residential units under construction in 2016. More importantly, these new units will provide a diversity of products at varied price points, enabling the opportunity for a more diverse income level and age range to find housing downtown that meets their individual needs.
Consistent with the Tracy Cross study, most of these units will be rental units. Experts have seen that the demand for rental properties is increasing, as more households are choosing to rent rather than buy. There are many reasons for this, such as the legacy of the housing crisis in 2007, the large amount of student loan debt, our increased mobility, smaller family sizes and the delay in starting families. The reasons aren’t as important as the fact that developers have identified the market demand and are providing the products that consumers desire.
Retail and Commercial Growth
Along with our residential population in the downtown, we will begin to see growth in retail and commercial businesses to serve and employ this growing population. Many businesses are discovering what many of our downtown companies have already experienced: that being in downtown Peoria is a wise decision for their business and their employees. Being in the heart of the city provides an opportunity to more easily collaborate with other professionals, both professionally and socially.
The DDC receives inquiries on a regular basis from businesses exploring the possibility of relocating downtown. Our experience is shared by commercial brokers, who are seeing an increased demand for retail space in the Warehouse District. We expect to see both new and existing businesses make the move to the downtown, especially in the Warehouse District, once some of the redevelopment projects are completed and new space is available for rent.
Parking and Other Challenges
While we work toward the development of the downtown, we will be faced with challenges. One that we are currently working on is parking. With the downtown’s growth, there will be an increased demand for convenient and affordable parking. The DDC and the City of Peoria have been working to stay ahead of this issue. We are working with developers to address parking needs at the front end of development to ensure that tenants and customers can easily live, work and recreate in the downtown.
The City is balancing the need to be proactive in addressing these issues and being prudent with taxpayer’s resources. It is taking a forward-thinking view of parking by encouraging alternate forms of transportation, while recognizing that parking design and placement is crucial to enhance pedestrian corridors, and being mindful that while we are providing an urban lifestyle, there will continue to be a need for automobiles. The DDC supports investments in infrastructure that are consistent with smart growth development and that rely upon a combination of public and private investment. We will assist as we can in addressing these and other challenges as they arise.
In August, I commented on the perception many have that we are caught in a “Catch 22,” in that we cannot have residential growth until we have the retail and commercial businesses to support that development, and that those businesses will not be developed until the residential demand exists to support them. I predicted that we would be able to do both concurrently, and that we would begin “where we can.” The past five months have shown that this is what is occurring. The mixed-use residential units are being developed to serve existing demand, and businesses are looking to move into those newly renovated spaces.
As we move forward, the future of Peoria’s downtown is bright. There are many committed leaders, both civic and business, who are focused on making sure the growth and development of our core city continues and is done in such a way that these investments will provide generations of central Illinoisans with a dynamic urban community. I remind readers that this effort will take time, and there will be challenges as we move forward. However, none of these challenges are new to urban redevelopment, and other communities with fewer resources have overcome these challenges, as we will. We will continue to make a difference in the development of our downtown “where we can.” iBi