An ‘urban feel’ coming to village of Peoria Heights

PEORIA HEIGHTS — Real estate developer Katie Kim and her husband, Charles, recently moved their family from a Dunlap subdivision to an older three bedroom, one bathroom, “workforce” house off Prospect Road near downtown Peoria Heights.

It was not your typical downsize.

“We call it our two or three year house,” Kim said recently.

That’s roughly the timeframe for Kim’s most recent project, the potential purchase and tear-down of 16 houses on the 1300 block of East Samuel Avenue in the Heights, and the rebuild of 16 to 21 two-story townhomes on the emptied lots. A second phase would expand onto the 1400 block of Samuel and increase the total number of new homes to 40. Plans also include the construction of a 12 to 16 unit condominium or apartment buildings on Samuel near Prospect.

The Kims chose to move to Peoria Heights, hoping to lead the way for an untapped pool of potential homeowners who, like them, were looking for a more urban, not suburban, way of life.

“We wanted a place where we could walk to restaurants and shops, and walking paths and biking paths and other amenities,” Kim said. “We wanted to live in Peoria Heights, but we quickly learned there were no houses really for us.”

On Tuesday, the village board approved a development agreement for the Samuel Avenue project. The agreement for the project, to be built in the village’s newest of four tax increment financing districts, should allow the initial infrastructure work in the area to begin in the middle of March. That work includes burying above-ground utilities, street improvements, sidewalk reconstruction, storm drainage and alley upgrades.

Once the infrastructure improvements are finished, the residential construction phase of the project can begin, Kim said.

“We’re excited to be bringing an urban feel to Peoria Heights,” she said.

It’s a complicated, ambitious project, the likes of which the village of Peoria Heights has never seen. Kim originally was interested in the land off of Duryea Avenue in the first block west of Prospect Road. That land, which would have required the purchase and demolition of just two houses, came off the market after being purchased by developer Larry Herman of Grand Valley Companies. A $5 million, 36-unit “upscale” apartment building is currently under construction on that site.

Kim’s attention turned to Samuel Avenue.

There are 16 houses in the 1300 block of Samuel. They are a mix of owner-occupied and renter-occupied homes. Small, working-class homes, they were built decades ago and many housed the families of workers at the nearby Pabst brewery.

Kim announced her project intentions in letters to every homeowner. Responses ran the gamut from no response, to “When hell freezes over,” to “We’ll think about it,” to “Where do I sign?” Currently more than 50 percent of those homes are “controlled” by the developer, meaning they have either been purchased or they are under contract. The houses are being bought with private money and private investors, not by any public means of eminent domain.

“We’ve got enough to move forward with the project,” Kim said.

Plans call for a row of unattached, brick, two-story townhomes with personal preference options of the number of bedrooms, bathrooms, garage car spaces (up to four) and floor plans. No two homes will look alike from the exterior, or the interior.

The street will be remade with new curbs, wider sidewalks, underground utilities, wrought iron features and ornamental street lighting. Cost for individual homes will vary, but will mostly be around $300,000.

The project has almost unanimous support of village officials. Mayor Mike Phelan sees the project as a potential residential break-through in the village of about 6,200 residents where property tax revenues plateaued a long time ago because it is geographically land-locked. The village is surrounded on three sides by the city of Peoria and on the fourth side by the Illinois River.

“There’s no room to grow,” Phelan said. “This project is one way to solve that problem.”

Kim has developed a Peoria Heights portfolio in the past few years. She helped arrange financing for the Trefzger’s Bakery $4 million move up Prospect Road to its new location in a century-old former bicycle manufacturing building. And, she was the developer of the new construction project at 4500 Prospect Road and Kelly Avenue.

The village has agreed to share property tax revenue from the new-home development with the Heights school district, something it is not required to do under laws regulating TIF districts. Still, the project has not completely escaped opposition.

Village trustee Daniel Mariscal twice voted against the project — last summer when an inducement resolution was approved 5 to 1, and last week when the development agreement was approved 5 to 1. Marsical’s opposition has to do with, in part, his interest in keeping current residents of Samuel Avenue in Peoria Heights.

″(There is) no explicit guarantee that Village residents who found themselves displaced by the project would be relocated to other areas within the Village,” Marsical wrote in response to a request for the reasons to his opposition. “Rather, that the village, along with the developer, would exercise due diligence in trying to secure housing within the village for those who found themselves displaced. I have been vocal in deliberations with both the Mayor and the Board that I cannot, in good conscience, support the project until that issue is adequately addressed.”

He also questions whether the project is viable.

“One needs not look far to see that the Greater Peoria area appears to be currently steeped in a depressed high-end housing market. At the present, I am not wholly convinced that there exists a demographic locally that would be desirous of purchasing $300,000-$350,000 homes,” Marsical wrote. “The fact that the developer has opted to roll out the project incrementally in phases, rather than whole scale as initially proposed is somewhat concerning to me in that regard. And while I completely understand the desire to bridge the gap in our housing stock, I am not wholly convinced that this project provides the ideal means by which to do so.”

Misconceptions concerning the project have popped up. A group from nearby Grandview Avenue, the view-endowed home to some of the priciest real estate in the area, misheard that the plans were for construction of subsidized, low-cost housing. Opposition dissolved when they learned that the rumors were not true. Next, homeowners on the other side of Prospect, who are neighbors of the new “upscale” apartment building now under construction on Duryea Avenue, feared all the new residential construction would drive up their own property tax bills.

“That’s not true,” Kim said. “Property taxes for surrounding homes will not be affected.”

With the success of a row of restaurants and shops on Prospect, the development of Trefzger’s and 4500 Prospect, the new apartments on Duryea, the potential development of the old Pabst Brewery and more, officials believe the townhome project might signal the beginning, not the middle, of the growth of Peoria Heights.

“We expect there to be a ripple effect,” Kim said.

Phelan optimistically agreed.

Without being specific, “There’s more on the way,” he said.

Scott Hilyard can be reached at 686-3244 or by email at Follow @scotthilyard on Twitter.

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