PEORIA, Ill. (WMBD) — Two Senate bills passed the Illinois House Revenue and Finance Committee Thursday and would give developers more time to invest in blighted areas and historic buildings in the Warehouse District.
Peoria Mayor Rita Ali testified before the committee that the extensions are critical to attracting new development in the coming years.
“We have examples of experienced developers who, but for the current expiring timelines might have already made a significant investment of an additional $46 million in the renovation of warehouses in downtown Peoria,” she said.
The Rivers Edge Redevelopment Zone tax program provides developers with 20% federal historic tax credits and 25% state historic tax credit for redeveloping historic buildings in the Warehouse District.
The program has attracted more than $100 million of private investment since 2012.
It requires developers to maintain the façade of historical buildings while updating the interior, which Ali said can get complicated
“The Warehouse District is home to dozens of turn of the last century warehouses and historic structures that cannot be restored without layering numerous federal state and local incentives together due to their complexity and cost,” she said.
Illinois Senate Bill 157 would extend the RERZ tax program through the end of 2026.
Illinois Senate Bill 1822 would extend the tax increment financing program for another 12 years. The TIF program subsidizes projects to eradicate blighted areas that otherwise might not be economically feasible for a developer, said Rep. Jehan Gordon-Booth (D-Peoria), who co-sponsored both bills.
“These are tools for redevelopment. We’re trying to bring Peoria back roaring strong,” she said.
Michael Freilinger, president and CEO of Downtown Development Corporation of Peoria, said they usually stop seeing new development coming into the pipeline within two years of the end of the program.
“The extension of this will give us at least three years to attract new developers, and have them find buildings, and begin their projects before the program expires… We need both the TIP and the historic tax credits in order to make these projects feasible for a developer to do,” he said.
OSF HealthCare is building its new ministry headquarters through the RERZ tax program. Lawmaker and OSF Vice President of Economic Development Ryan Spain said the building was originally scheduled for demolition and he is glad it is being preserved.
He said the program is crucial to saving historical buildings because its cheaper to build new construction instead of redeveloping old buildings.
“It’s important that we want to save these historic buildings and make sure that they are preserved to remain as part of the fabric of our communities. It would be a shame if these buildings were lost,” Spain said.
Chicago-based developer David Dubin said the tax credit programs are essential to Peoria’s growth. He is currently developing a 120,000 square foot warehouse on SW Washington St into a 126-unit apartment building, complete with dog run and landscape patio area.
“It it comes down to dollars and cents. Without the extension, there would probably be no more large buildings developed in Peoria. Period,” Dubin said.
Both bills next head to the Illinois House of Representatives for a floor vote.