Despite approval, developer drops East Peoria housing project

EAST PEORIA — Lackluster support from the City Council and the community led a Rock Island-based not-for-profit developer to pull the plug on a proposal to build 40 to 50 low-income units adjacent to the city’s commercial Levee District.

For now.

“I wouldn’t say (the project) is dead,” Brian Hollenback, the director and chief executive officer of the Rock Island Economic Growth Corp., said Wednesday. “If we would ever get a consensus (from the council) then I think we would be receptive to another proposal. The door is open.”

The unexpected withdrawal of the proposal worried some officials that it made the city look like low-income housing was unwelcome in East Peoria for fear of the caliber of residents it would attract.

“It made me very angry,” Commissioner Dan Decker said Wednesday. “It made me uncomfortable that it looked like we are an elitist community telling people ‘don’t live here if you don’t make enough money.’”

Last Nov. 21, the City Council approved by a vote of 4 to 0 a master development agreement with the Rock Island group to develop city-owned property on Center Street. Located between the back end of Costco and the elevated ramp of Illinois Routes 8/116 and the Cedar Street Bridge, it was only the second much-desired residential proposal in the area to come before the council since the Levee District opened for business six years ago. The first proposal for high-end apartments and retail stores died for lack of funding years ago.

The unanimous vote (Commissioner Gary Densberger was absent that night) came after a group of city officials toured similar facilities in Rock Island. By all accounts, everybody came away impressed.

“We met a wonderful group of people that put on a great presentation,” Commissioner John Kahl said. “We toured a number of facilities and they are quality products. I’m not going to discount the quality or the makeup of what they do.”

Then he changed his mind.

The vote changed on its second reading two weeks later. It was still approved, but by a less-welcoming vote of 3 to 2, with Kahl and Mayor Dave Mingus switching from support to opposition. Commissioners Decker, Densberger and Tim Jeffers approved the proposal, Densberger on the the grounds that there was plenty of opportunity throughout the process for the council to end the project if it didn’t meet city standards.

Mingus said he didn’t think the proposal fit what the city’s established criteria for development in the area, especially a development that came with city incentives attached. The council had agreed to donate the property to the developer and to pay for infrastructure upgrades.

Kahl was a little more specific. In order to get necessary funding, the agreement required that 90 percent of the rents for the apartment units be at or under 60 percent of the area’s average median income. Hollenback told the council that most monthly rents would range from less than $300 to $1,000. Kahl compared that to an area on Springfield Road.

“Somebody mentioned 2811 Springfield Road, not that any of us know where that’s at (Raintree Apartments). Just read the arrest records that are published in the paper on a weekly basis. Right there (rents) start at $495 for a single bedroom,” Kahl said. “It was stated that some of these (proposed) units will be $300 (a month), so I have some grave concerns with that.”

Several residents from the nearby Richland neighborhood expressed similar concern about the potential for trouble that low-income housing could bring to the area. Decker said those fears lacked merit.

“These apartments were for blue collar, hard working, good people,” Decker said. “They would be for people just starting out. Because they are not wealthy does not mean they are criminals or people who have their hand out (for assistance). Actually, I don’t want to be part of a community that excludes any group of people that have every right to live here.”

Hollenback said he pulled the $12 million project in part because it lacked strong council consensus. It was the rare example of when a 3 to 2 vote wasn’t good enough to save a proposal

“We need consensus and clear support and understanding of what is being developed,” Hollenback said. “We have other projects in the pipeline that we have moved on to.”

City Administrator Jeff Eder was mostly ambivalent about the collapse of the project.

“I thought it was a good fit for the area,” Eder said Wednesday. “But the fact is that maybe one in 10, one in 20 proposed developments actually make it all the way. This was nothing all that unusual.”

City attorney Dennis Triggs said the development agreement was technically dated from Dec. 6, 2017, to Dec. 6, 2019.

“Brian Hollenback, however, decided not to execute or pursue the agreement,” Triggs said Wednesday. “The understanding that Brian and I have is that if he should find financing and a project that he believes is a good fit for East Peoria, he will be in contact.”

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

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