(upbeat music) - Peoria's Warehouse District is undergoing a big transformation, abandoned buildings turned into living spaces, more parking, and more businesses.

What once was urban blight could end up being the future of downtown Peoria.

Our Phil Luciano talks with one business owner who has been working on this vision for decades.

- [Phil] Where others saw storage Pat Sullivan saw opportunity.

Sullivan has been a driving force in the Warehouse District since it was, well, nothing but warehouses.

But in the 1980s, he started to wonder if the century old buildings could be reborn commercially.

- Just the feeling, I mean, I did the math, if I can rent it to 'em, fix it up enough to be safe, then why not do it?

- [Phil] In the late 1800s, warehouses started popping up along Water Street.

A few were for Peoria's many distilleries, but most were for farm equipment built in Chicago and Rockford, then hauled to Peoria for sale.

But farm equipment sales didn't last too long.

- They were here for a short period of time.

When I say short period, anywhere from 10, 15 years, to 20 years, and then other businesses and stuff.

- [Phil] One warehouse on Water Street housed a brewery.

And at 619 Southwest Water Street, the site of part of Sullivan's property today, the O'Neill Brothers Transportation Company set up a business that during prohibition was key for a certain Chicagoan.

- Al Capone stored stuff in this building through a trucking system.

- [Phil] After Capone, legitimate businesses started to move inventory to the Water Street warehouses into the 50s and 60s and beyond.

That's how Sullivan got involved there in the 1980s.

- Well, I just needed an old warehouse.

I was in the floor covering business, and I just needed an old warehouse to store things.

- [Phil] He eventually bought the old O'Neill warehouse, then other properties around it.

Almost by accident, Sullivan became a landlord.

- And so we bought that, and then started fixing it up a little bit, and had our office there, and then all of a sudden somebody wanted to rent our office 'cause it was fixed up.

- [Phil] That happened over and over.

Meantime, he thought about a visit he'd made to a rehabbed warehouse in Chicago.

- I remember going to a spaghetti house, and you went in one door, and you walked through, and had to go up a couple steps, and then over, and then up these real old steps, and all of a sudden you're in a nice restaurant, and I always thought that was neat.

- [Phil] He wondered if the trend could play in Peoria.

By the year 2001, Peoria leaders were still debating whether the warehouses successfully could be developed into restaurants, loft apartments, and other commercial opportunities, so he opened Kelleher's Irish Pub and Eatery.

Soon he was asking federal and state officials for grants to fix up the streets, lighting, and other infrastructure in the area.

- We need this for this, and I don't know why I did it, but no one else was going, so I thought I would.

- [Phil] Today the Warehouse District is a thriving area bustling with restaurants, shops, and residences with more on the way.

In fact, Sullivan thinks development could push further into South Peoria.

- Well, the Warehouse District goes all the way down to Edmond Street, which is three blocks past MacArthur.

- Michael Freilinger joins us now.

He's the president and CEO of the Downtown Development Corporation of Peoria.

Good to see you again, Michael.

- Good to see you, Mark.

How are you?

- I am great, and working here in part of the Warehouse District, we're excited to see all the changes that seem to be going on at every block.

Can you kind of tell us about your vision, and your group's vision for what this could be in the future?

- Yeah, well, our vision for the entire downtown, which includes the Central Business District, Warehouse District, Riverfront District, the Medical District, and the near north neighborhood, we think, and hope for, and are working towards a revitalization of the entire downtown to make it an exciting place both for businesses to bring their employees to and work, collaborate with other professionals, as well as having a dynamic, walkable neighborhood that people can live in, an urban neighborhood.

- So when you're designing, developing, dreaming about something like this, how does it work in terms of do you try and get businesses in first and then residents?

Vice versa?

A little bit of both at the same time?

How do you balance that?

- Yeah, well, it's always the chicken and the egg question, of course.

The truth of the matter is a journey of 1,000 miles begins with a single step, right?

So you start where you can, and what we have found is during our research, the communities that were successful in redeveloping their downtowns started with residential.

They needed people living downtown.

What does that do for you?

Well, it gets people on the street, so it makes it vibrant and dynamic.

They support those businesses that are serving lunches during the day.

Now they're serving dinners at night.

So having a residential population in the downtown provides kind of a base of economic activity for the businesses that are there, and helps 'em to be more successful because their hours of operation expand into the evening and on the weekends, and you also have a base of people in the downtown that will go to the activities that other organizations are putting on, so you have a pool there to kind of support everything that goes downtown.

That's worked in every other community that's tried it, and that is kind of our strategy.

So we focus on the residential redevelopment at this point in time.

As long as there's demand, we wanna encourage developers to meet that demand by creating new living spaces in the downtown.

There's another not-for-profit in town, the Greater Peoria Economic Development Council, and they're really focused on attracting businesses here.

So we let them do their thing, and we do our thing, and together we're working to make sure that both the business growth and the residential redevelopment happens in downtown.

- Well, like I said, we've seen a lot of development going on here.

Let's throw up a map so people can see what we're talking about.

And we just wanna kind of define what the Warehouse District is.

On the South, obviously you've got the Illinois River.

On the East, you've got the Bob Michael Bridge.

North, Northeast Jefferson, so we're talking a a pretty big area in there.

Of course, Dozer Park is in there, and the post office, and some existing businesses.

What kind of successes have you seen so far in terms of maybe a residential place being built, or a business that came to the Warehouse District and is thriving?

- Yeah, well, we have examples of both.

In 2017, 2018 is when we saw a real big addition, or a lot of activity.

We saw a lot of buildings being converted into residential mixed use, which means that there's at least a commercial component on the first floor somewhere.

We saw a larger number of buildings, I think it was seven, that were completed within a year's time period.

All of those filled up rather quickly.

They've remained full and the rents are pretty healthy for the developers, so that's good for us.

The other thing that we have seen is that we've seen businesses that wanna be in that dynamic urban neighborhood.

I'll give you one example.

One of the first buildings that was redone was Murray Place building.

And it's a four story building, two floors of residential, and then the Farnsworth Group came in, and they were looking for a new place.

They chose to move down in the Warehouse District.

They took the entire second floor for their operations.

Then you've got Rhodells and other activities on the first floor.

So that's an example of how it works and we think it's been pretty successful.

- Let's talk specifically about some of the projects that are going on right now, and we'll show you some video of these different locations.

800 Southwest Adams.

What is happening there?

- Well, 800 Southwest Adams is the Adams and Oak Project, and that's a very large building, and that was purchased from the DDC, actually We worked out a deal with the previous owner, which is Bill Cerrone, big backer of the Downtown Development Corporation.

As a matter of fact, he spearheaded the effort to create the Downtown Development Corporation from the CEO Council.

So Bill and I worked out a deal where we would market his building.

We actually offered to purchase it and then found a buyer for it.

Casey Baldovin is a developer.

He developed the Block, which is on Southwest Washington Street, so he was familiar with the Warehouse District and just about the time it was getting rolling COVID hit, so that kind of slowed thing down.

But he's working on that building now.

We expect it to be open sometime this year.

- Okay, let's move on to 800 Southwest Washington just a block away.

- Yeah, 800 Southwest Washington, which some people know it as the old Used But Nice store, that is actually a building that is part of a two building project.

We attracted a developer from Chicago, Oculus Development, and they came in and they wanted a little bit more scale.

They were looking for upwards of 150 to 200 apartments.

The reason why is they can use that economy of scale to offset the cost of the amenities that they like to provide with their project.

So they actually bought two buildings, or have them under contract, and the city's approved their redevelopment agreement, which, I may say RDA during this time.

So 800 and 801, which is the commercial food building that Ed Hood owns, both of those buildings are gonna be redeveloped by Oculus Development.

They're right across the street, same side of Oak Street on Southwest Washington Street, and together they'll have about 177 apartments, whereas Adams and Oak will have 90.

- Okay, and just a few buildings down from that, 812 Southwest Washington?

- 812 was something I was working on when I first started here about 10 years ago.

That building is scheduled to be completed this year.

Probably will be the first one this year that's done.

That building, the old former Builder's warehouse, it will have 126 units in it.

That's one of the taller buildings in the Warehouse District.

And we expect that coming online sometime in early spring.

- But will it have heating and air conditioning because the old Builder's Warehouse famously did not.

- Yeah, and not only that, it'll have toilets in every apartment.

- Hey, what more could you ask for?

Finally, 906 Southwest Washington.

- 906, I think 908, that's the Fredman Building.

That's about five stories tall.

It's, let me put my glasses on.

I'm getting old.

- We all gotta do it.

- That's about 54,000 square feet, five stories.

That building is for sale, and we expect somebody to pick it up at some point in time and redevelop that.

That would be the fifth building on that one city block, essentially, so we're getting quite a large neighborhood just on that city block.

- Okay, now with all this, we need more parking, and I know that there's some development going on with that.

Can you tell us about that?

- Yeah, well, the city successfully acquired land behind the A12 building from Pat Sullivan, as a matter of fact.

And they're going to extend Commercial Street from Oak to Persimmon, which is good.

And then also there'll be about 300 surface parking stalls.

Now, that is probably enough to address one of those buildings, okay?

Across the street at 815 Southwest Washington Street we've been working with the city for several years.

Matter of fact, all of the properties that have been acquired for that location, the DVC was the one who spearheaded that effort, and got it, and made a deal with the city, and they either purchased it, or did land swap, or whatever the case may be.

But now the city owns everything from 807 to 907, so it's a pretty big area.

That is where eventually a parking deck will be built.

And as you can imagine, these buildings when they were operating as warehouses would have maybe two employees in 'em.

Now you're gonna have close to 100 people living in these building, so the need for parking is gonna increase, so the city is gonna have to try to resolve that.

The acquisition of the land that is behind 812 and is turned into 300 parking stalls will be a good first step to kind of meet the immediate need.

But eventually, before these other buildings are completed, we're probably gonna have to see that parking deck belt.

- Sure.

At the beginning of this process, I mean, you could say it began decades ago, but more recently, what kind of obstacles have you, your organization had to overcome in terms of trying to convince people that it's gonna be a safe, awesome area to live in?

What kind of speed bumps, if any, did you have?

- Right, surprisingly, we don't have a lot of people concerned about whether it's a safe neighborhood.

They've seen the transformation.

I think the biggest key in resolving that was the street scape improvements that were done as part of the Tiger Grant.

The streets are more attractive.

They look safe.

They look like a very nice place to be, and I think that went a long way to resolve people's concern.

Plus, with the commercial activity that's already taken place, just on the other side of Oak, we have all of Winkler's development, so people have been living down there.

The Sealtest building is occupied with both commercial and residential.

So we've seen people on the streets.

They're enjoying it, and that hasn't quite been the concern that I thought we might have had.

But again, the downtown is really rather safe.

So that's not a big issue.

The challenges, I think, have been the parking, and also during the pandemic, that kind of put the brakes on everything.

People just were not sure what was going to happen, how quickly people were to return to work, those types of things, so it became harder for developers to raise the money to actually move forward with these projects.

By the way, a project of these sites that we've been talking about, you're talking about spending 15 to 20, maybe even $25 million per building, so it's a lot of money.

- Some of the apartments that are gonna be built, I know a lot of people are curious what kind of rent there might be involved.

Is an average middle class person going to be able to afford to live in the business district?

Warehouse District?

- We just got our housing study done, and we'll be putting it up on our website.

But essentially you're looking at around, I know this will probably confuse people, but we like to talk per square foot, so like a single or a studio apartment would be about $1.41 to $2.80 per square foot.

And as you move up, the prices per square foot kind of go down because it's a bigger place.

But in general, what we're finding is a good number of the places that are being developed are about $1,000 a month in rent, which means that for a household with $50,000 worth of income they can afford that easily.

There are a variety of price points though, so if somebody's looking for a more affordable apartment, they're probably gonna economize on space, IE move into a studio apartment, maybe pay a little bit more per square foot, but the total rent is lower.

- Okay, these projects we talked about, rehabbing these buildings, doing parking, things like that, do you think is five years a good timeframe?

You think we would have most of this done within five years?

- Yeah, well, the Adams and Oak and the 812, those will be done this year, and then the two buildings that Oculus has under contract, I am thinking that's 12 to 18 months, maybe 24 or so.

They should probably be done in 2025.

And then with the Fredman building, which is the 908, that's still up for sale, and that's available to people.

So we'll have to wait and see when we get that done.

But there are other projects that are going on in the Warehouse District, such as the Chick Manufacturing Building, and there will also be new construction of a four story building with commercial on the first floor.

And I believe that's supposed to be condos, about 77 units and then 22, I think, in the Chick Building, which would be apartment buildings, so we've got those going on, and then there are some other smaller projects, five units here and there.

- So we're talking about one district out of five in the city.

Once, five years from now when most of this is complete, and I'm sure there'll still be work on newer things, where do you go from here?

What's next on the agenda?

- Yeah, well, right now in the Warehouse District, that's where most of the developers are targeted, and a couple of reasons why that are, because of the streets scape improvements, because the value of the buildings because they've been vacant for so long, is lower, so TIF, which is tax increment financing, works very well in that type of environment, and historic tax credits.

Those have helped the developers cover the cost to redevelop these buildings.

But most of the inventory, these bigger buildings, with the exception of the Fredman building and the CAT Lab building, which is on the corner of Southwest Washington and MacArthur, those are the only two really large scale buildings that are left in the Warehouse District.

So the next projects are gonna be migrating into the Central Business District, and that's what we've been working for since we began.

But you can't tell a developer where he is gonna develop.

He's gotta make that choice.

So as the inventory's been bought up, and redeveloped, and that urban neighborhood has been created in the Warehouse District, we're confident that that success is gonna migrate into the Central Business District, which most people think of as downtown.

And we'll start seeing projects happen similar to Civic Center Court, that building was once office buildings, and pretty much now all residential, we'll see more and more of that happening in the Central Business District.

Which means, again, you've got the people on the streets in the evenings and on the weekends.

It becomes more dynamic community, more attractive for employers to say, "Let's take our business downtown and fill up the vacant commercial space that might be available."

- You know, I'm sure companies like Oculus, they do plenty of research before they just spend millions of dollars on property.

But I'm curious, I wonder with all the new tenants they hope to bring downtown, what percentage of those are people already living in our area?

And what percentage of those may be moving to Peoria for a new job?

- Well, I don't know the exact percentages.

What we do know is our population is not growing that rapidly here in central Illinois, Peoria specifically.

So it's either people that are coming in and somebody's moving out, transitioning a job, like for example, a lot of people come to Caterpillar, work here in Peoria for a while, and then they'll go on to another assignment, that type of stuff.

The medical community has the same type of deal where people are moving in, doing their residency, moving on to their next assignment, that type of thing.

So even though the population hasn't been growing significantly, there's a lot of change in and out of people.

And then there are people who are currently renting that would rather be downtown, so when their lease comes up, they look to move downtown.

So we see a little bit of both.

- Well, Michael, we appreciate all the information.

Lot's going on, and it's gonna be fun to see how this area develops and prospers in the next few years.

- Well, thank you for your interest, and thank you for all that you do bringing attention to all the good things that are happening in our community.

- All right, appreciate it.

We'll talk to you soon.

- All right, thank you, bye.

- Phil Luciano joining us now.

You used to live in the Warehouse District, right?

- I did.

You think when he's talking about medical professionals and other people, you're thinking about mostly a lot of young folks moving in, enjoying nightlife and all that stuff, and that is true.

But the thing is, what I learned, and this was about 12 years ago I lived here for a couple years.

I lived across the street from WTVP, as it turns out.

But the access to go to the civic center or to the Chiefs games and that stuff is great, or the street festivals.

It's a wonderful environment, no safety issues, and this was back before a lot of these restaurants started popping up.

I mean, that was 12 years ago, and now it's even more conducive to a fun type of, not, I would say, crazy lifestyle.

It's really kind of fun.

But you think if you are getting in toward retirement age, (Phil coughs) and then if you wanted someplace that was a little less intensive in terms of home improvement and all that, those wonders of home ownership, that's what some people come to urban areas for, to just kind of, I don't wanna mow my lawn all the time.

I don't wanna fix my roof all the time.

I wanna hang out.

So for older folks, it could be an attractive place to move.

- It'll be interesting to see too, we told you about the Warehouse District boundaries, it'll be interesting to see if it moves further towards the south end of Peoria.

Maybe eventually in the future we'll get that grocery store that's so desperately needed now, and a gas station, and some other amenities that'll help people outside of the Warehouse District too.

- That's about the only thing in the Warehouse District that's really kind of lacking, even just convenience type stores.

I mean, you don't need a grocery store right now right here, but maybe, like you say, toward the south end, you never know.

- Let's open a Casey's.

- Let's start investing in all these places.

- We should.

Well, coming up in just a few minutes, we've got a brand new episode of "You Gotta See This."

- And it is our Valentine's Day salute.

We've got a couple stories to that end, the most interesting one, I think, it's some older folks and their love story, and I'll just leave it at that.

It's really sweet.

We also have a couple food centric items, Valentine's Day food and treats.

One is a newer French type of, what would you call it, pastry type shop.

You wanna check this out.

I'd tell you what it is, but I can't pronounce the word 'cause it's French.

Voila is in the title.

The other word I can't say, but stay tuned.

The other one is this food, I don't wanna call it a factory, but it's on the fringes of Central Illinois in the town of Virginia.

It's in someone's house.

They make hundreds of stuff.

You gotta check this out.

- Very cool.

That's coming up in just a minute, and we thank you for joining us.

You can check us out anytime at wtvp.org.

Have a good night.

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