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Closing on the East Peoria, Illinois Redevelopment Agreement for $92.8
Million Marriott Hotel Project May Need Yet Another Extension

City Council Insisting that Closing will Occur Prior to March 30, 2012

By John Sharp, Journal Star, Peoria, Ill.McClatchy-Tribune Regional News

Feb. 23, 2012--PEORIA -- A 99-year property lease involving the Catholic Diocese of Peoria and the owners of the Hotel Pere Marquette is one of several issues that has to "get squared away" before closing on the Marriott Hotel project can happen, City Attorney Randy Ray said Wednesday.

Mayor Jim Ardis said the City Council fully anticipates the closing to take place before March 30. If not, then the project is done.

A spokeswoman with the Diocese would not confirm that its property interest is stalling the closing on the $92.8 million private-public hotel project. The Diocese's ownership interest includes a portion of the hotel property, which sits next to Sacred Heart Church, 504 Fulton St.

"Yes, we are one of the property owners of some of the land the proposed project is to be established," said Patricia Gibson, an attorney and chancellor of the Catholic Diocese, declining further comment.

Ardis said the property situation involving the Diocese "speaks to the complexity of" the entire project.

"They are still trying to work through the agreement with the Diocese," he said. "I think that is something they will get resolved. It's one more layer on this deal. We're working through that and we're having a good discussion."

The council will be asked Tuesday to extend its closing date with EM Properties on the sale of the Hotel Pere Marquette and adjacent properties that include Big Al's strip club until March 30.

The council also will be asked to extend its sale of the Franklin Street parking lot to Peoria Speakeasy Inc. and Main Street Land Trust for the construction of the new Big Al's on Jefferson Avenue across from the Civic Center. That extension also is until March 30.

"We're at a point right now where this thing is going to get done in March or it's not going to get done," Ardis said. "My expectation is it's going to get done."

The parking lot was vacated on New Year's Day. Since then, the city estimates they are losing about $1,000 a month in parking fees and approximately $500 to $1,000 in other parking fees.

The latest delay comes after the City Council endorsed a one-month extension in January, establishing the new closing deadline as Feb. 29.

Ardis said he believes the city will have "90-plus percent of the information" needed by Tuesday, but it's not enough time to sell the bonds by the end of the month's deadline.

"The extension gives us the window to finish up the tail end to give us the information we need," he said.

Despite the delays, Ardis anticipates the hotel opening by March 2014.

City officials were prepared to cancel the redevelopment agreement with EM Properties and its developer, Gary Matthews, in August. But negotiations resulted in a third redevelopment agreement with Matthews since 2008, resulting in a cheaper hotel project that excluded a $9 million developer's fee. The project originally cost $102 million, with the city obligated for about $40 million.

Matthews could not be reached for comment late Wednesday.

The hotel complex attached via a skywalk to the Peoria Civic Center requires the city to bond $32.5 million in principle and capitalized interest over 20 years. Payments on the general obligation bonds will come from revenue generated by the facility.

John Sharp can be reached at 686-3282 or jsharp@pjstar.com. Follow him on Twitter @JohnSharp99.

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(c)2012 the Journal Star (Peoria, Ill.)

Visit the Journal Star (Peoria, Ill.) at www.PJStar.com

Distributed by MCT Information Services NASDAQ:MATW,



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