It’s been one year since Caterpillar — long considered the face of Peoria — announced the unthinkable. The company decided to pack up its global headquarters and set sail for the Chicago area. The manufacturing giant also said it would scrap visions of a expanded downtown base before eventually choosing Deerfield, Illinois, as its new home.
The news on January 31, 2017, initially sent shock waves throughout the city of Peoria. For many at the time, it was the city’s worst nightmare come true — leaving much uncertainty.
“Caterpillar is always going to be in the DNA of this community. So a year ago — it was a kick in the gut to catch our breath for certain,” said Jeff Griffin, president of the Peoria Area Chamber of Commerce.
“I think what happened a year ago with the announcement is people suddenly said maybe we need to hold off on making business investments and see where things are going to go,” said Peoria city manager Patrick Urich.
In one particular case, the announcement may have cost the city of Peoria millions of dollars regarding in the ongoing saga with the Marriott Pere Marquette Hotel. At the time, the developer owed at least $7 million to the city for its investment into the $90 million project, but was having trouble paying back the loans of the city and another investor, INDURE. In the fall of 2016, Urich says a refinancing deal was nearly on the table that would have paid off the city.
“After the announcement made by Caterpillar in January, the refinancer said they were not interested in pursuing the refinancing any longer,” recalled Urich. “Sometimes the issues of timing are just issues of timing. There’s nothing you can do about it.”
A refinancing deal was later reached last month, but the city only received $2 million — or one-fourth what it is owed including interest and felt the need to add a 4 percent hotel tax to help recoup the remaining balance.
But was Caterpillar’s decision really doomsday for the Peoria area?
According to the Illinois Department of Employment Security, the Peoria area added 1,100 non-farm related jobs over the course of the 2017, including 500 new manufacturing positions. The unemployment rate in the city of Peoria and Peoria County dropped by 1.6 percent in 2017. Also, Caterpillar had a great year with global profits growing by billions, and the company hired in the area.
Things are also slightly trending up in the housing market, soothing early anxieties, according Mary Ann Ladendorf, president of Peoria Area Association of Realtors.
“When the announcements came we were like everyone else — just not sure what the future will be,” said Landerdorf.
She partly credits Caterpillar’s incentive program that offers to help people buy homes of the company’s relocated employees. More than 130 properties owned by CAT employees sold in 2017, with market costs ranging up to $1.7 million. Landerdorf believes the program helped sell homes that potential buyers may have otherwise been hesitant to consider.
“It really opened the upper end market in particular,” she said.
Though no one will call the company’s decision ‘a good thing’ for the city, it may have revealed what Peoria is made of — which is more than just Caterpillar.
“I don’t think you would call it a blessing in disguise,” said Griffin. “But one thing that we’ve learned is that it is okay and encouraged for other organizations to take a leadership role.”
There may be no better example than OSF Healthcare’s recent decision to purchase the former Chase building in downtown Peoria. OSF claims its future ministry headquarters will eventually house 700 employees in the location once a integral part of Caterpillar’s vision for a world headquarters expansion.
It’s also a sign of a possible change in focus for the city moving forward.
“You know we have been reliant on manufacturing for many years in Peoria, but now our single most employing base is healthcare,” said Urich. “So as we start to shift away from manufacturing we need to see where we can reposition ourselves for the future.”
“What do we sell to the rest of the world of what Peoria is,” posed Griffin. “Because folks have identified CAT with Peoria and that’s going to remain in place, but what else?”
Peoria remains home to 12,000 Caterpillar employees, which is the company’s largest employee base of any city. And what happened in 2017, may have been the push Peoria needed to learn what it has to offer.
So maybe a better indicator of the state of Peoria wasn’t Caterpillar moving its headquarters — but what happens next?