Peoria approves $250,000 revolving loan for Papa Schadt arcade expansion downtown
PEORIA, ARIZONA — May 14, 2019

Peoria approves $250,000 revolving loan for Papa Schadt arcade expansion downtown

Peoria City Council approved $250,000 revolving loan fund financing for Papa Schadt manufacturing expansion and received presentation on comprehensive Peoria Innovation Alliance smart city initiative while addressing community concerns following recent fatal shooting.

Peoria Council Approves Papa Schadt Loan Despite Councilmember Kelly's Junior-Lender Objection; Innovation District and Public Safety Concerns Dominate Evening

Peoria City Council voted 9–1 on May 14, 2019, to approve a $250,000 municipal revolving loan fund financing for Papa Schadt LLC / Folden Ventures, a Kansas-based manufacturer of pop-a-shot basketball arcade equipment seeking to relocate its operations and office to downtown Peoria at 1918–1920 Southwest Adams. The affirmative vote marked the council's endorsement of the city's third major revolving loan since re-establishing the program through federal Economic Development Administration (EDA) grants in 1988. John Kelly cast the sole dissenting vote, citing discomfort with the city's junior-lender position and questioning why taxpayers should bear subordinated risk that commercial banks decline to assume.

The meeting also featured a wide-ranging presentation by Jake Hammond of the Peoria Innovation Alliance on a proposed five-pillar smart-city initiative and 16-block innovation district in the central business district, and prompted council discussion about expanding surveillance camera requirements for multifamily residential units in response to the community's grief over the fatal shooting of 4-year-old Jeremiah Ward the night before.

Key Speeches

"This funding is intended for us to be in the second position or sometimes even a third position depending on the nature of the loan. The intent is that we're there to fill the gap that the primary lender is only willing to go so far." — Cesar Suarez, Senior Development Specialist, City of Peoria

"I'm very uncomfortable with us putting taxpayer money in where we don't have the expertise, we don't have the risk analysis that the other partners do, and we end up of course being junior." — John Kelly

"When people are asked what they think of Peoria, what came next is usually pretty negative. Whether it be with Caterpillar leaving the area, reports that don't do us any favors... So the reasoning in the fifth pillar—national storytelling—is when we're approached [outside the community] and we receive that negative feedback, what are we gonna say? 'No, actually that's not true. Let me tell you about this.'" — Jake Hammond, Peoria Innovation Alliance

"I think we need to move forward with a plan. Video cameras—there's definitely facts and proof that the more video cameras deter crime in those areas. I think that should be part of our strategy." — Councilmember Montelongo

Timeline

Papa Schadt Revolving Loan Fund Item (19-148)

Opposition

Support

Project Details

Vote Breakdown

Outcome & Next Steps

The $250,000 revolving loan fund loan was approved and authorized for execution by the City Manager. Papa Schadt LLC / Folden Ventures is expected to proceed with property acquisition, renovation, and equipment installation at 1918–1920 SW Adams, targeting completion by November 2019 (to align with peak sales season). The applicant committed to creating 10–12 initial jobs and up to 20 within two years. Loan terms: 10-year repayment, amortized over 20 years, at an interest rate not stated in the transcript. Collateral includes first lien on the developed real estate and personal guarantee secured by Stucker's home. Staff will provide Councilmember Sear with a retrospective report on the loss history (dollar amounts) and minority/women business participation among the previous 45 revolving loan program recipients.

Controversies & Context

The revolving loan fund debate exposed lingering community and council anxiety about municipal lending in the post-Caterpillar era. John Kelly dissent articulated a broader philosophical tension: should cities use public funds as subordinated lenders in deals that private capital markets reject? John Kelly explicitly stated discomfort with the taxpayer bearing junior-position risk. However, City Manager and Suarez contextualized the program as a federal policy tool (EDA-funded since 1988) designed expressly to bridge financing gaps that conventional lenders won't cross. The council majority accepted this rationale and the loan review committee's vetting, but Kelly's skepticism likely resonates with segments of the Peoria public already fatigued by manufacturing decline and budget pressures.

Notably, Mayor Ardis and Councilmember Reck Regal deliberately linked this loan approval to the concurrent innovation district and smart-city narrative—framing Papa Schadt as an exemplar of the "entrepreneurial activity" and "changing the narrative" that Peoria seeks to cultivate. This linkage may have softened some opposition; the timing of the two presentations on the same agenda created a synergistic messaging effect.

Duration

Peoria Innovation Alliance / Smart City Initiative (Item 19-146)

Concurrent with the Papa Schadt loan vote, Jake Hammond of the Peoria Innovation Alliance presented a comprehensive strategy to reposition Peoria as a regional innovation hub. The presentation outlined five pillars: events and education, seed fund, accelerator program, smart city technology infrastructure, and national storytelling.

Key Speeches

"The why for this initiative really is the exit of Caterpillar headquarters, the business climate in Illinois—it's provided a sense of uncertainty for our region... If you go to Chicago or anywhere else and you tell them you're from Peoria, you're typically met with a negative response. What we're aiming to do is change that narrative." — Jake Hammond, Peoria Innovation Alliance

"I hear quite the opposite [of negativity] from professionals who come into our city... The people of Peoria say about our city that whatever is wrong with the city of Peoria will be corrected by what is right in the city of Peoria." — Councilmember Grab

"When we're not in the community and we receive that negative feedback, what are we gonna say? 'No, actually that's not true. Let me tell you about Bump Boxes and their success, or what Natural Fiber Welding is standing for.' People are blown away. 'That's happening in Peoria?'" — Jake Hammond

Proposal Overview

Hammond presented a proposed 16-block Phase 1 innovation district in the central business district, bounded by Main Street (northeast), Water Street (southeast), Harrison, and Jefferson. The district would anchor on:

The initiative targets five industry clusters: autonomous vehicles, ecommerce, healthcare, sustainable materials (natural fiber composites), and agriculture. Hammond emphasized that Peoria possesses deep, underutilized expertise in these areas—particularly autonomous vehicle technology (Caterpillar's mining truck heritage; Indy Singh's downtown autonomous mobility program) and sustainable materials (Natural Fiber Welding, located in the former Firefly building on Gahanna Road).

The plan leverages a partnership with the Dallas Innovation Alliance, led by Trey Bowles. Dallas has secured commitments from AT&T, Cisco, and AECOM to share expertise, venture capital, and operational models with Peoria. Peoria's approach includes ecosystem-building (per Kauffman Foundation methodology), attracting investors and entrepreneurs through regional events, and a data-driven smart city infrastructure pilot within the Phase 1 district.

Council Questions and Discussion

Councilmember Reck Regal asked how the OSF innovation hub announcement aligns with the broader innovation district strategy. Hammond replied that staff is working with consultant Tom Alexander (formerly of 1871, a large Chicago co-working space) to advise on programming and operations—not just the building itself. The aim is to support OSF's makerspace, accelerator, and co-working offerings and help market those programs.

Councilmember Ollie raised concerns about Illinois population loss to neighboring states (Missouri's marketing of Saint Louis and other cities) and asked whether Hammond is engaging large technology companies. Hammond confirmed that the Dallas partnership brings relationships with AT&T, Cisco, and other tech firms; moreover, Verizon's regional business account manager (responsible for Peoria's 5G efforts) is a willing participant who appears in the promotional video. Hammond also highlighted the Dream Center and Big Picture initiative partnerships as avenues to teach graphic design, videography, and photography to youth—expanding tech-related education beyond the current mechanical and electrical focus.

Councilmember Jensen emphasized that Peoria's existing strengths (no traffic congestion, low cost of living, riverfront, bike trails, symphony, museum, diverse housing stock, excellent schools) should be the foundation of the narrative, not deficiencies. Hammond agreed that the negativity he references is encountered when traveling to Chicago or elsewhere, not locally; transplants (including the video producer who moved from Tampa) express enthusiasm. Jensen also asked whether the proposed district boundaries were fixed or subject to council input. Hammond confirmed that the boundaries (Main, Water, Harrison, Jefferson) are provisional and discussed with Anthony Caruso (city's innovation team) and John Morris (Riverfront Museum director). Future phases may extend east of I-74 (Phase 2) and into the warehouse district (Phase 3).

Councilmember Grab gently pushed back on Hammond's framing of Peoria as facing a "negative response" nationally. Grab noted that Peoria has been successfully diversifying its economy away from heavy manufacturing for decades (work done 20–30 years ago), that the mid-1990s leaders made intentional choices that buffered the Caterpillar departure, and that he hears optimism—not pessimism—from visiting professionals. Grab cautioned against painting Peoria with too broad a negative brush, noting it remains a "very iconic middle-class city."

Councilmember Euler asked Hammond to clarify the council's role and expectations. Hammond explained that ecosystem-building involves convening people to spur "collisions"—unplanned interactions that may generate ideas or business growth. The initiative includes five pillars: events/education (with a proposed Chicago showcase event to attract investors and developers), a seed fund (addressing a shortage of capital for startups), an accelerator program (to help companies grow, particularly in the identified clusters), smart city technology (installation of IoT devices like smart lighting and Wi-Fi), and national storytelling (to counter external perceptions).

John Kelly asked whether the smart city infrastructure would involve working with external providers (broadband, telecom companies) or city-only deployment. Hammond confirmed that he has already engaged I-3 Broadband and Verizon; Dallas achieved "fastest-to-market" smart city status through a donation agreement with the city and business owners, allowing vendors to install technology without full procurement red tape. Hammond proposed a similar model for Peoria.

Councilmember Montelongo stated that he agreed with the multi-city learning approach and noted that there are many "flavors" of innovation ecosystems across the nation. He asked Hammond to meet during the following week and indicated that Peoria already has an ongoing smart city initiative—suggesting the Innovation Alliance should coordinate rather than duplicate. Montelongo also asked that the footprint extend beyond the 16-block district to the warehouse district, which already has significant city investment.

Councilmember Regan Bach praised Hammond and his team for thinking outside conventional boxes and noted that Peoria's diversification efforts in the 1990s–2000s deserve credit for buffering the Caterpillar shock. Regan Bach suggested meeting with Jim Foley, Ross Miller, and Kevin Evans from the Small Business Development Center and Peoria Next Innovation Center to ensure complementarity rather than competition.

Vote

The council voted unanimously to receive and file the Peoria Innovation Alliance presentation (Motion by Councilmember Reck Regal, seconded by Councilmember Euler). This procedural vote does not approve funding or formally adopt the proposal but acknowledges receipt and signals continued development in coordination with city staff.

Outcome & Next Steps

The Innovation Alliance will continue dialogue with the city's innovation team, OSF, and external partners (Dallas Innovation Alliance, AT&T, Cisco, AECOM). Staff are expected to refine the district boundaries and phasing strategy with Hammond and council input. A longer, more detailed presentation was offered for future meetings. No city funding allocation was voted on at this meeting; the presentation was exploratory and intended to keep the community aware of momentum in the innovation space.

Fatal Shooting, Community Trauma, and Public Safety Technology (New Business)

The meeting opened with Mayor Ardis requesting an extended moment of silence to honor the family of 4-year-old Jeremiah Ward, who was fatally shot the night before (May 13, 2019). The Mayor stated: "The community is in deep grief over the situation last night so we're going to take some extra time to consider that."

Councilmember Montelongo's Remarks

Late in the meeting, during the new business segment, Councilmember Montelongo raised the issue of community safety in the context of the recent shooting. He called for the city to move forward aggressively on three initiatives:

  1. Multifamily residential unit camera ordinance: Montelongo argued that even a few hundred dollars invested in security cameras at apartment complexes could deter crime and potentially prevent deaths. He noted that camera footage from Taft Homes had already proved valuable in a recent shooting investigation. He proposed using Tax Increment Financing (TIF) funds to subsidize cameras for residents who cannot afford them.

  2. Ring doorbell registry acceleration: Montelongo emphasized that the city has a memorandum of understanding (MOU) with Ring and should move more aggressively to promote the video doorbell registry program and ring adoption across the community.

  3. City-owned public camera network: Montelongo advocated for a multi-year plan to install public surveillance cameras in high-crime areas, citing ShotSpotter as an example of technology that has already saved lives and officer safety.

Council Response

Councilmember Grab offered nuanced support. He affirmed that cameras deter crime and that the technology is beneficial, and he praised ShotSpotter. However, he cautioned that any ordinance requiring multifamily units to install cameras must be carefully crafted to avoid one-size-fits-all regulations. He noted that newer developments (such as Park Common and Pierson Hills) have voluntarily committed to cameras as part of their design, whereas older, well-maintained properties (such as Fieldmore Ravine Estates) may not need a mandate. Grab emphasized the need for a policy discussion before any ordinance drafting.

City Manager (responding to Montelongo) stated that the Ring MOU is complete and in place. He indicated willingness to explore a multifamily camera ordinance and to work with the Police Department and Community Development Department to craft policy recommendations. He noted that the cost of such cameras has declined and that requiring cameras in larger multifamily properties merits discussion.

Outcome & Next Steps

Staff were directed to explore the following:

  1. A potential ordinance requiring or incentivizing security camera installation in multifamily residential units.
  2. Options for city funding (TIF or other sources) to subsidize camera costs for low-income residents.
  3. Acceleration of the Ring MOU implementation and public awareness campaign.
  4. A multi-year plan for public (city-owned) surveillance camera deployment in public areas.

The City Manager and Police Chief were tasked with returning to council with policy recommendations and draft ordinance language (if appropriate) at a future meeting, with the understanding that this requires full council vetting and coordination with private landlords.

Context

The shooting death of Jeremiah Ward occurred on May 13, 2019, the night before this council meeting. The incident sent shockwaves through the Peoria community. Pastor Chuck Brown conducted a vigil for the family during the council meeting, and Peoria Community Action Program (PCAP) partnered with police to canvass the neighborhood. Councilmember Reck Regal specifically recognized both PCAP and Pastor Brown for their rapid mobilization. The incident revived a long-standing council discussion about surveillance technology as a public safety tool and prompted calls for more aggressive implementation of existing programs and ordinances.

Other Notable Items

Spring Flooding and Infrastructure Costs: Public Works Director Bill Lewis and City Manager reported on ongoing spring flood response. River levels are receding. Sandbags are expected to be removed from Water Street by Friday (May 17); River Station perimeter barriers by Monday (May 20). Il Mocambo Leo's and Spirit of Peoria (riverboat cruises) are expected to reopen. Specific cost estimates will be provided at the next council meeting. The flooding affected Water Street, Darr Street, and Gleaner Road areas.

Multiple Proclamations: The council unanimously approved proclamations for Trauma-Informed Awareness Day (May 15), the retirement of Coach Mike Wallace (50+ years in education and coaching), Poppy Days (May 23–25), Bradley University's national champion speech team, middle school SkillsUSA program winners, National Public Works Week, and Peoria Public Schools art displays at City Hall. These items were largely ceremonial and unanimously approved without controversy.

Consent Agenda (Routine Approvals): The council unanimously approved insurance renewals ($183,855 total with Arthur J. Gallagher, Arthur, Argonaut, Hanover, and ACE Insurance), South Village TIF job training grant fund allocation ($25,000 for organizations that exhausted 2018–2019 grants), mowing contracts for vacant lots and rights-of-way, and tree stump removal/trimming services.

City Link Transit System Evaluation: Councilmember Jensen announced that City Link is conducting a comprehensive transit system evaluation with public input meetings scheduled for June 11 and 12, 2019, at the Transit Center and Peoria Public Library branches.

Duration