Changing business practices over the decades has altered the landscape of many downtown commercial areas. Peoria, Illinois is a community determined to reinvigorate its Warehouse District, transforming it into a vibrant, mixed-use residential and commercial neighborhood. Large employers are based in the vicinity and residential properties in the area are near-capacity. These factors, taken in combination with over $25 million dollars of infrastructure improvements, a wide array of cultural and entertainment venues, and multiple investment incentives, make this area on the Illinois River a must-see for developers.
PEOPLE WORK DOWNTOWN
Peoria hosts a large downtown employment base, including the world headquarters of Caterpillar, a Fortune 50 company; a medical school and two hospitals; school, state, local and federal government offices; and multiple financial and professional services. All told, some 20,000 people commute to the area daily and many of them reinvest their earnings in the array of shopping, dining, special events and other services offered throughout downtown. The presence of these major, stable commercial interests is a cornerstone to the future growth and development of the area.
PEOPLE LIVE DOWNTOWN…AND MANY MORE WOULD
Residential indicators in Peoria are clearly signaling that the area has yet to fully serve its downtown employment base with adequate housing alternatives. An updated 2013 report from the consulting firm of Tracy Cross & Associates reaffirmed the viability of growth in this market. The four residential complexes located in the area have enjoyed full or nearly full capacity rates for a number of years. Since 2011, rent at these locations increased 3.2 percent, and not one location reported the need to offer incentives or concessions to secure occupancies. The Tracy Cross study goes on to state that the downtown area and its Warehouse District have the potential to absorb 200+/- new housing units annually over the next several years, primarily in the form of rental apartments (see below chart).
INCENTIVES ARE AVAILABLE
Tax Increment Financing (TIF) District: The Warehouse District provides 50% of the new property taxes generated to the developer, with the other 50% used for public infrastructure improvements through 2031.
Federal Historic Preservation Tax Credits: Historic renovation — now 45% off!! The most unique feature of the Warehouse District is the predominance of beautiful and historic buildings. For those buildings that are designated as historic properties, two powerful incentives are available. For every dollar of qualified renovation, investors will receive a 20% credit against federal tax obligations and a 25% tax credit against Illinois state taxes. If a building was constructed before 1936 but not registered as historic, investors can receive a 10% federal tax credit for renovations. The Illinois Historic Preservation Agency recently nominated the Warehouse District to the National Register of Historic Places, which will qualify most of the buildings for these incentives.
River Edge Redevelopment Zone: Developments in this area pay no sales tax on building materials, and receive state tax credits for investment, jobs and environmental remediation.
All properties in the Warehouse District also lie in a HUB Zone. If a business in this zone meets the requirements, it can gain preferential access to procurement opportunities. The federal government, along with major employers such as Caterpillar Inc., are required to contract with HUB Zone certified small business for a percentage of their budget.