UPDATE (7:56 p.m.) — Peoria City Council has unanimously voted to move forward with a $57 million hotel and apartment complex proposal in downtown Peoria.
Council members voted Tuesday night on the city council agenda item.
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PEORIA, Ill. (WMBD) — Peoria City Council will hear a proposal on Tuesday to transform a dormant section of SW Adams St. into a $57 million hotel and apartment complex.
Florida-based Fulton Hotel Development LLC owns the former Sully’s Bar on the 100 block of SW Adams St. The proposal would raze the former bar and adjacent Illinois Central College building to construct a 140-room hotel and 50-apartment complex with a pool, gym and rooftop bar.
Upon the project’s completion, the city would reimburse the developer’s capital costs as part of its Downtown Conservation Tax Increment Funding (TIF) program through 2036, when the program expires.
Peoria City Manager Patrick Urich said the agreement places the financial burden on the developer, not the city.
“From the city’s perspective, there’s really not a lot of risk on behalf of the city,” he said. “We’ve agreed to give the developer whatever property tax increment that is generated by the property would be shared with the developer to reimburse his expenses after the hotel is constructed. So there’s no money upfront, it would be after the hotel is constructed.”
The city will also offer $3 discounted parking for hotel guests and will extend the business district that covers hotels downtown for tax purposes.
“That would add an additional sales tax on the property and the hotel tax. That’s used to offset capital expenses…So if there’s any revenue that comes from that fee it would come back to reimburse the capital expenses of the developer…The only public involvement is the discounted parking and any incremental TIF revenue that’s generated on site,” said Urich.
Urich said when the TIF was established in 2013, the city assessed a base value on every property. Sully’s was assessed at $15,600 while the ICC building was non-taxable. The developer will be reimbursed based on the new value, minus the original assessment.
“So if the developer puts $57 million into this site, those taxes are going to go up. They might go up to be almost $1 million a year. So what would happen is the developer would be able to receive reimbursement for expenses,” he explained.
Once the TIF expires, all property tax revenue will go to the city.
If the council approves the proposal, it will kick off an agreed-upon timeline of completion to be eligible for the TIF reimbursements. Constructions plans are due by April 1, 2024, with groundbreaking in January 2025. The hotel would open on August 1, 2027.
