|By Paul Gordon, Journal Star, Peoria,
Ill.McClatchy-Tribune Regional News
Dec. 10, 2008 - PEORIA -- A new 14-story hotel would be connected to the Hotel Pere Marquette to create what would be a "true headquarters hotel" for the Peoria Civic Center in a $102 million project that would partner developer EM Properties with the City of Peoria.
The project would include $39.3 million in public financing that would be financed through bonds and repaid through new revenues the project would generate, under a plan that is scheduled to go before the City Council next week.
If approved by the council, an enclosed walkway would connect the Civic Center to a full-service hotel with 489 rooms and additional meeting, convention and banquet space, could be operating by 2012, EM Properties CEO Gary Matthews said Monday.
Matthews said the project, while seeking public financing to get built, will be self-sustaining. "I have never built a project that didn't support itself and this one will support itself, as well," said Matthews, who built Riverfront Center and GEM Terrace in East Peoria, among other projects.
"This project should then create a domino effect that will bolster all of Downtown, including existing hotels," he said.
Mayor Jim Ardis said he's confident the council will approve the project. "Peoria has been trying to get a premier product like this for a long time. I think our patience has paid off. This is a quality product with an ultra-quality flag in a great location," he said.
Ardis said he knows there will be naysayers. "But when you lay everything out I don't see how it could be any better," he said. "This project ultimately is being paid for by the project. I'm very comfortable with it." The centerpiece of the project will be a $40 million, 200-room Marriott Hotel tower that would be built on land along Main Street that now holds Big Al's and other businesses and connect to the Pere Marquette to make one hotel. Matthews said the Pere Marquette would maintain its name in some form.
A new $10 million, 500-vehicle parking deck that would be built where the existing Pere Marquette deck now stands would include ground floor space for retail.
The Pere Marquette would receive $25 million in renovations. EM Properties would acquire the Pere Marquette from current owners Innco Hospitality of Kansas City, Kan., part of a $22 million land acquisition that also includes the Big Al's building and other structure that now exist between the Pere Marquette and Monroe Street.
Finally, a $5 million glass walkway would connect the new hotel with the Civic Center near its theater entrance.
The new hotel will be locally owned by GEM Hospitality, for which Matthews is the general partner. There are several limited partners who have invested, as well, Matthews said, but he declined to name them.
Marriott Corp. will manage the hotel, Matthews said.
"This is the right time and the opportunity, because of the Civic Center expansion and its need for a headquarters hotel, to do something for the community," Matthews said. "I think Downtown Peoria deserves this project. The citizens have convinced me the city can support it and other projects." Questioned about the timing because of the recession, Matthews -- who said he began working on this project more than a year ago -- said this is actually an opportune time because the recession is causing building materials to come down in price.
"By the time this opens, the country should be out of this recession. And it gives us and the convention people time to plan and line up events to bring here that would justify the Civic Center expansion and justify our project," Matthews said.
He cited a feasibility study sanctioned by Marriott -- which would not commit to the project until it saw the report -- that recommends the project proceed because of the convention and room nights being lost to the Civic Center without a headquarters hotel.
"The group that did the study (Pinkowski & Co. of Memphis) is considered very conservative and they think this is a real opportunity," he said. "It puts the Civic Center in a whole new category, a higher level, and with no competition between Chicago and St. Louis." According to the plan, Matthews and his investors, all local, will put $4.5 million into the project and secure $54 million in private financing. Maintaining the historic value of the Pere Marquette would yield $4 million in historical tax credits.
Matthews said he hopes to use a consortium of local banks for the private financing.
City financing would account for the remaining $39.3 million. Bonds would be repaid through revenues generated by the project, including tax-increment financing and additional hotel, restaurant and sales taxes it would generate. The plan calls for a 23-year payoff.
The city's portion would be about 40 percent of the project, which Matthews said is similar to what the city of East Peoria has financed for the Embassy Suites. That hotel and convention center, which opened last year, was a $60 million project.
If the city approves the project, Matthews said he will close on the property acquisition first, which would force businesses -- including Big Al's -- to move. While Big Al's owners have received city approval to relocate to two possible sites within a couple blocks, a final location hasn't been named.
Matthews said he wants to begin demolition of the buildings and old parking deck that will make way for the Marriott soon after taking ownership.
Renovations on the Pere Marquette would be done simultaneous with construction of the Marriott tower. Matthews said most of the work at the Pere Marquette won't be seen by the public as it entails mechanical and life safety problems, such as plumbing, heating and air conditioning.
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