UPDATED 11/29 5:14 a.m.
PEORIA, Ill. –– Peoria’s City Council on Tuesday night unanimously approved a redevelopment agreement for the Pere Marquette Hotel, now that it and adjoining buildings have been sold to Texas-based Shreem Capital, under the condition the city will reimburse at least half of the hotel, restaurant, sales, and business development taxes generated by the property for the next 25 years.
In return, Shreem will not contest the determined value of the property, which results in a $1.1 million tax bill. That money will be used to pay down the $32 million in debt the city took out to redevelop the Pere Marquette and build the Mariott Courtyard in 2011.
The city must pay $1.5 million per year on the debt until 2043; the remaining $400,000 will be taken out of tax revenue.
The city council’s approval was the final step for the sale. In October, Shreem secured the property for around $20 million total. Peoria’s attorney Patrick Hayes tells 25 News, it was a “distress” sale, as the property was foreclosed on and under a receivership.
Ahead of Tuesday night’s vote, Peoria City Manager Patrick Urich told WMBD’s “Greg and Dan”, if the hotel property was taxed at the purchase amount and not the taxable value of $44 million, property taxes used to pay off the bond issued under the previous ownership would drop by nearly $600,000 to $700,000.
“We worked out an agreement with them where they’re not going to contest their property taxes, we’ll continue to collect roughly about $1.1 million in property taxes, but we’re going to share with them (Shreem Capital) the hotel tax, the sales tax and the restaurant tax that’s generated on site,” Urich said.
Urich said Shreem Capital will get 65-percent of those taxes the first five years, then 50-percent after that.
Plans for the property include redevelopment of unused retail space that could bring even more revenue downtown.
“We’ve both agreed that we will put $800,000 a piece into that, or $1.6 million, to get that space ready for restaurants that might want to come in and take on that space,” Urich said.
Urich said potential plans for the unused retail space include a restaurant style that would appeal to patrons going to family-oriented events at the Peoria Civic Center.
PEORIA, Ill. – Now that it’s under new ownership, the Peoria City Council will take up what’s been dogging the city for years: financing for the Hotel Pere Marquette that led to the original remodeling and reopening of the facility and its next-door neighbor.
The Peoria City Council Tuesday is scheduled to vote on approval of a redevelopment agreement (PDF document) with Texas-based Shreem Capital so that it can make improvements promised to the Pere, the Courtyard by Marriott, and the parking garage they share.
The city will provide sales tax rebates to cover portions of the renovation work, including on unused planned retail space.
The owners will still pay property taxes on the hotels – their value assessed at $44 million, but purchased for $20 million. The purchase by Shreem was announced in October.
The city, by the way, will continue to pay $1.5 million a year for the next 20 years to cover debt service on the bonds issued under previous ownership.
The city says the deal will be “beneficial.”
The hotel is part of a Tax Increment Financing District.
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