PEORIA — The clock is now ticking on a proposal by the city to front a pair of downtown condo buildings $2.5 million to make much needed infrastructure repairs.
On Tuesday night the Peoria City Council voted to set a public hearing date on a proposal to raise property taxes for owners at Downtown Peoria’s Twin Towers condos in exchange for the city fronting the buildings $2.5 million to make repairs.
Tuesday night’s vote by the council, which was unanimous save for two abstentions, now gets a clock ticking for the condo owners to kill the proposal, if they wish, within the next 60 days before a public hearing to be held in July.
The city is proposing to issue bonds and front the Twin Towers $2.5 million to make repairs to its parking garage, fire systems and other infrastructure needs that the building does not have the cash on hand to make itself. In exchange, the city would establish a special service area at the condos, which would raise property taxes on its owners. The money gained from those increased property taxes would be used to pay the city back the $2.5 million over the course of 20 years.
The extra property tax fee levied would not be allowed to exceed $2.75 of every $100 of equalized assessed value. However, because the towers also reside in a tax increment financing district, condo owners could see discounts on their increased property tax payments based on the amount of increment generated by the property.
The council’s vote Tuesday night did not lock in the plan but did set a public hearing date for the SSA in July and also set in motion a 60-day timer for residents of the condos to put together a petition containing signatures of more than 50% of its residents signaling they do not want a special service area. If that petition were to come to fruition, the plan would be null and void.
While Tuesday’s council vote did not push the plan one way or another, councilmembers still asked pointed questions of city staff about the plan.
Mayor Rita Ali asked city attorney Patrick Hayes why the condos could not just go secure a bank loan to make repairs to the building. Hayes said banks “lost appetite” for loaning money to the property because they do not have the ability to issue debt that carries the same type of security that an SSA would allow.
Hayes explained to the council that debt issued via an SSA carried an extra layer of security to it because Illinois law allows for SSA debt to supersede any other kinds of debts, including mortgages. This would mean, as Hayes answered in response to another council question, that the city’s debt would take priority in the instance of mass foreclosures or other difficulties at the building.
Hayes told the council this type of debt would be “very secure.”
Councilmember Mike Vespa abstained from voting because he owns a condo at the towers. Likewise, councilmember Zach Oyler abstained because he sells property there in his capacity as a real-estate agent.
A public hearing for the SSA has been scheduled for July 14.
This article originally appeared on Journal Star: Proposal to increase taxes at Peoria condo building set for hearing
Reporting by JJ Bullock, Peoria Journal Star / Journal Star
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