Peoria unanimously approves first distillery in century, $3.8M Black Band project transforms warehouse district

Peoria Council Approves First Distillery in Century and Habitat Relocation While Grappling with Contract Precedent and Fair Housing Reform

On May 28, 2019, the Peoria City Council approved multiple high-profile developments and governance reforms while navigating uncomfortable questions about when to hold developers accountable versus when to accommodate unforeseen conditions. The evening's centerpiece was the unanimous approval of Black Band LLC's $3.8 million distillery-and-restaurant project—the first distillery in Peoria in over 100 years—paired with equally swift approval of a Habitat for Humanity location amendment that exposed deep tension between fiscal prudence and community development equity.

The council also voted 9-1 to separate the Fair Housing and Fair Employment commissions into two bodies, though the narrower-than-promised ordinance sparked immediate pushback from Councilwoman Jensen, who argued the city had surrendered the proactive authority originally envisioned.

Black Band LLC Distillery: Downtown Momentum Crystallized

Assistant City Manager Cesar Suarez presented the distillery application with palpable enthusiasm. The project, to be operated by owner-developer Chris Ober at the southwest corner of Maple and Adams—in the heart of Peoria's revitalizing warehouse district—represents $3.8 million in total capital investment: $2.8 million in hard and soft redevelopment costs, plus $900,000 in distillery equipment. The existing 14,000-square-foot building would be modified to approximately 11,600 square feet to accommodate the production equipment, and would include a restaurant and outdoor patio.

The property's assessed value would jump from approximately $37,000 to $316,000 in estimated assessed value (EAV)—an eightfold increase. The city would reimburse Ober $65,000 in 2020 and 60 percent of eligible TIF costs over the following six years, totaling $162,000 across the project's reimbursement period. This represented a 60/40 split favoring the developer—slightly above the city's typical 50/50 target, but justified, Suarez argued, by $200,000+ in lead-based-paint removal required for food operations.

"The total estimated cost for this project right throughout the city to Pamela we are but our share is very minor portion of the project this is in the city of Puri and part of it will be outside the city but it's all in Kiryat County." — Cesar Suarez, Assistant City Manager

Suarez noted that Peoria had once boasted over 100 distilleries and breweries and was the "whiskey capital of the world." The distillery represents a tourism draw and a symbolic reclamation of that heritage. The development timeline is aggressive—Ober aims to open by November 2019, before the holiday season.

Councilmember Moore, whose 1st District includes the warehouse district, underscored the significance of Ober's personal commitment: he had purchased the property in 2017, identified this opportunity, and was simultaneously owner, developer, and operator—"all in," she said.

"The other thing was that there are 30 full and part-time jobs and retail sales are estimated to go up and what I like about retail sales the food is that's not something that you can order from Amazon and bring in so I really appreciate that." — John Kelly raised a longer-standing concern about the city's reliance on TIF incentives rather than tax abatement. He noted that under a tax-abatement structure, the developer would pay no taxes on the new investment whatsoever, whereas the TIF approach gives "City Hall" discretion over who receives rebates.

"I really tried very hard with starting with Quentin Davis many years ago and going all the way through to all Craig Hullinger Chris sette to say please consider tax abatement when the warehouse district came up I said please don't condemn this to a tiff and they said well what we're going to do with this TIF is we're going to rebate real estate taxes and I said so you guys got religion finally and they said well you know we're going to decide just how much to give each person we're you know because City Hall we really know okay without with a tax abatement system they were they would be getting they wouldn't be paying any taxes at all on their new investment." — Councilmember Kelly

Nevertheless, John Kelly voted yes, acknowledging that the TIF structure appears to be driving the warehouse-district boom. The ordinance (19-163) passed unanimously. Council also voted unanimously to dissolve the River Trail TIF district (19-162) after completion of projects it was meant to fund.

Habitat for Humanity Relocation: Contract Enforcement vs. Unforeseen Infrastructure Costs

The more contentious item was the location amendment for a Habitat for Humanity four-home affordable housing project. Habitat had been approved to build four homes on four specific lots at 1026 NE Madison. During pre-construction excavation, the organization discovered a cracked sewer line and an electrical conduit—critical infrastructure feeding the nearby OSF campus—running directly overhead. Repairing or working around these issues would cost an estimated $30,000 or more. Habitat owned adjacent property at 1017 NE Madison and requested to relocate the four homes there instead.

Public commenter Andy Diaz objected forcefully, arguing the city was abrogating leverage over contract compliance and setting a dangerous precedent for other developers.

"I ask that you reject this request tonight and hold the developer to their original contractual agreement the developer is bound by the terms in ditions of a contract for homes on four specific Lots in the request you have in front of you tonight the city is acting as if they have no leverage in the negotiations and must accept the change wholesale by allowing the developer to move away from this land that was given to them by the city we are passing the buck to future developers or worse never doing anything with this land at all because of a problem that should be addressed today." — Andy Diaz, objector

Diaz cited a 2018 email from then-Director Black outlining the city's 2012 vacant land strategy, which prioritized "capable developers who have shown a financial capability and ability to do development." He argued that Habitat should either absorb the $30,000+ cost or return the $400,000 in grant funds and allow the city to find a developer willing to build on the original site. He also questioned why the city should not reduce Habitat's developer fees (which totaled roughly $75,000, or 15% of project costs) to offset the unforeseen costs.

"As our elected officials you speak for the people not the developers not the nonprofits not the institution's the people if you allow this change for the developer to not comply to their contractual agreement and allow them to move on to another site you condemn this block to having another undeveloped parcel not paying property taxes for the foreseeable future address the issue today send the message that we will do things right the first time regardless of the neighborhood or developer." — Andy Diaz

Julie Schmidt, executive director of Habitat for Humanity of Greater Peoria, responded emotionally but defensively. She emphasized that Habitat is a nonprofit Christian organization that has built over 155 homes in the community, spending nearly $3 million in private funds to develop the North Valley neighborhood—an area that had seen no new single-family construction in decades.

"We are not irresponsible with our stewards money we are good stewards of our money our volunteers and our sponsors give us money to help us build the houses I agree with that and we do go out and we do raise other funding but I will tell you that most people would agree that when a house costs about a hundred and thirty thousand to build to a hundred and fifty we should not be using $30,000 or more when we have a perfectly good lot that Habitat owns down the street right across the street using the exact same design and we could do this with a vote tonight." — Julie Schmidt, Executive Director, Habitat for Humanity of Greater Peoria

Schmidt noted that Habitat had built homes on nearby Morton Street and Spring Street without encountering similar sewer problems, and that the sewer-and-conduit obstacle was unique and unforeseen. She pledged that Habitat would move the four homes to the nearby property and continue its mission.

Councilmember Moore supported the relocation, emphasizing Habitat's nonprofit status and its target population: low-income families required to put in sweat-equity hours before qualifying for the homes, with no-interest mortgages, 1% down, and 12 months of financial education.

"I think it is important to know who the developer is in this case I think it is important to understand the type of individuals who short of habitat stepping in and building a home would not have the capacity to afford to buy a new home brand new from the ground up understand that the individuals who are given this opportunity have to put in hours on other houses before they are eligible to step up and have a house of their own." — John Kelly raised a practical concern: the electrical conduit also runs along Morton Street, so similar problems could arise on other North Valley lots. Director Lewis (Public Works) confirmed that the convergence of a cracked sewer line with a critical electrical conduit was "probably not something that would occur on a lot of frequent basis" but acknowledged that the infrastructure constraints were real.

Councilmember Graib provided historical context: the city had faced a similar "perfect storm" years ago at Jefferson and Addington, where a large boulder buried in the street forced a 18-month-plus traffic-disruption while the city rerouted a sewer line—a costly lesson in unexpected subsurface obstacles.

Dr. Andre W. Allen (Dr. Andre W. Allen) asked what would become of the original 1026 Madison property. The city manager indicated the property might revert to the city for a pocket park or community garden, though that decision rested with Habitat's board. Moore requested that Habitat's board determine the property's future use and report back by the next council meeting.

The council voted unanimously to approve the relocation amendment (19-149), with the understanding that Habitat would work with the city on the disposition of the original site.

Fair Housing and Fair Employment Commission Separation: Narrower Ordinance Than Promised

Councilwoman Moore introduced an ordinance (19-122) to separate the combined Fair Housing and Fair Employment Commission into two distinct bodies. Her stated goal was to allow each commission to take a more proactive approach to addressing affordable-housing shortages and employment disparities in minority communities—insights she had gained attending National League of Cities conferences where other municipalities had adopted similar structures.

"I convened two committees one committee dealing with fair employment one committee dealing with fair housing and each of those committees we had people who from the community who came in and indicated I presented to them what I've just presented to you and they were very eager to get involved on a commission that would be advisory to the council that would be more reflective of what is going on in our city." — Councilmember Moore

She emphasized that the new commissions would not only be reactive (hearing complaints) but proactive—developing policy recommendations and bringing community input to council deliberations around housing and employment. She noted that community partners—representatives from organizations like the Phoenix office (formerly Southside Office of Concern), Metro Tech, and the Public Housing Authority—had stepped forward to join because they believed the city was "getting serious" about these issues.

Councilwoman Jensen, while supportive of the separation in principle, raised a critical objection: the ordinance itself does not grant the new commissions any proactive authority. It merely empowers them to "hear fair housing complaints" and file an annual written report. It does not authorize them to develop policies, conduct research, or initiate investigations.

"Although I support Councilwoman more wholeheartedly and separating fair employment from fair housing and having a commission set up to do all of the things that council will be more just mentioned including helping us develop and create policies to increase affordable housing the ordinance that we're being asked to approve tonight does not do that the ordinance that were being asked to approve only gives the Commission the authority and the duty to hear fair housing complaints it does not give them the authority to do any of the things that Councilwoman more mentioned." — Councilwoman Jensen stated she would support a future ordinance modeled on the previous Housing Commission (which had broader authority) but could not vote for the current version.

The ordinance passed 9-1, with Jensen voting no. Council members indicated they would revisit the ordinance structure to align it with the proactive intent Moore had articulated.

Budget Process Reform and Strategic Planning Initiative

City Manager Weir, with support from Assistant City Manager Deborah Rattler and Finance Director Jim Scroggins, presented a comprehensive overhaul of the 2020–2021 biennial budget process. The presentation acknowledged persistent fiscal challenges—macroeconomic headwinds, internet-sales disintermediation, legacy costs, staffing at a 25-year low—and proposed shifting from department-based budgets and across-the-board cuts to an outcomes-based, strategic-planning-aligned approach.

The new process would:

1. Develop operational and business plans for each department, defining their customers, external/internal factors, department-level outcomes, and key performance indicators.

2. Hold a joint strategic planning session with council (target: late June) to identify city-wide outcomes and strategic priorities.

3. Establish outcome teams that would define key objectives and performance indicators for each outcome.

4. Build a performance-management dashboard to track progress.

5. Pivot from cutting across-the-board to funding programs aligned with strategic goals, evaluating programs competitively and funding based on outcomes rather than departmental entitlement.

6. Engage the community through a revised Peoria Budget Challenge, a business-leaders committee, a Plan Peoria online input portal, budget mailers, and at least one public budget workshop.

The timeline targets completion by end of October. The manager noted the city would soon interview strategic-planning consultants (three candidates short-listed) and expects operational plans from departments by early June.

Councilwoman Jensen raised several concerns:

• The one public budget workshop in July may not reach citizens who vacation or lack computer access; she urged paper surveys distributed through churches and neighborhood organizations.
• The business-leaders committee should include broader stakeholder representation—League of Women Voters, average citizens—not just business elites.
• The city had undertaken a strategic plan just two years ago (via consultant Lyle); she wanted assurance the new planning would not duplicate past efforts unnecessarily.

"I am a little disappointed that we're starting so late but I am happy to see that this proposal will include community engagement and opportunities for that of course I'd like to see hopefully a little bit more I think just having one meeting especially in July is difficult a lot of people that's when they vacation and they're not in town so I'm hoping I mean even when we did the meetings for developing the riverfront space which you keep referring to that were successful you know I think we had more than one so people have an opportunity to attend it because sometimes you have a conflict and other things." — Councilwoman Jensen

The manager acknowledged the timeline was aggressive and committed to seeking council input on the consultant selection by June 11. He also noted that the previous strategic plan was still in force and that the new effort would refocus council priorities given two newly seated members.

Councilman Regan Bach praised the honesty of the presentation—acknowledging under-resourcing, staff shortages, and measurement gaps—and urged robust community engagement. He also asked that council members be involved in designing the outreach strategy, noting that direct-mail campaigns (like the recent garbage-contract notice) often fail to reach residents effectively.

John Kelly raised a concern about comparing programs on a "per-dollar-of-service" basis across departments (fire vs. public works vs. community development), noting that such metrics are inherently difficult to standardize and may obscure the true value of less-quantifiable services.

The presentation was received for filing. Council indicated it would revisit specifics at future meetings and that the manager would bring back consultant recommendations on June 11.

Other Notable Approvals

Traffic Signal Software Upgrade (19-152): Council unanimously approved a joint IDOT agreement to modernize traffic signal software throughout the city. The current system is 20 years old, causing maintenance headaches and cost overruns. The upgrade will not change existing signal hardware or preemption capabilities for emergency vehicles but will improve system reliability and reduce maintenance costs. Fire Chief and staff emphasized that emergency vehicle preemption is already in place at 226 intersections (specific list to be provided to council); the software upgrade is a replacement, not an expansion.

River Trail TIF Dissolution (19-162): Approved unanimously.

Consent Agenda: Multiple items approved unanimously, including:

• IDOT engineering contract for shared-road improvements (19-153)
• MFT resolutions for Wilhelm Road, University Street, and Pioneer Parkway improvements (19-154, 19-155)
• Solar utility facilities zoning code amendment (19-130)
• Administrative deviations for wall signs (19-133)
• Assisted living facility zoning variance at 1328 West Circle Road (19-156)
• Auto sales/service zoning at southwestern and Cattell locations (19-157)
• Junction City Shopping Center expansion with design-review condition (19-158, with yellow replacement ordinance)
• Smith Street neighborhood commercial building (19-159)
• April 30, 2019 unaudited financial report (19-160), discussed below.

Financial Report: Sales Tax Trends and Emergency Reserves

Finance Director Scroggins presented April month-end unaudited financials showing revenues on track in some categories but lagging in others due to the late winter and changing consumer patterns. Key highlights:

• General Fund Emergency Reserve: At $16.9 million (approaching the 25% target of ~$24 million), up from $13.8 million last year when debt-service reserves are factored in.
• Liquor and Video Gaming Collections: Nearly 90% collected year-to-date (strong performance).
• Parking Deck Revenues: ~50% collected, consistent with seasonal patterns.
• Garbage Fees: Only 1/2 percent collected year-to-date because garbage bills are collected on property tax bills, with the first installments due in June.
• Police and Fire Pensions: Police pension paid $1.1 million; fire pension still awaiting personal property replacement tax collections (expected June onward).
• Sales Tax: Down roughly 8% year-to-date through February due to a severe January cold snap (–48°F), but February showed recovery. Final March numbers will not arrive from the state until early June.

Councilman Sara commended the finance team and praised the improved accuracy of revenue projections compared to the prior two years. He also noted the effective collection rates on liquor fees and parking, attributing success in part to recent software investments in parking-gate technology.

The 2018 audit remains in progress; auditors are expected to complete field work by mid-June, with the final report targeted for July 31 or August 1 (slightly later than the typical June 30 deadline due to the city's recent accounting-system conversion).

Proclamations and Community Recognition

The meeting opened with several proclamations:

• National Gun Violence Awareness Day (June 7, 2019): Michelle Nielsen, representing Moms Demand Action, announced a "Wear Orange" remembrance walk on June 8 at 10:30 a.m. at the Military Services Memorial Plaza, honoring the approximately 96 Americans killed daily by gun violence. The walk is co-hosted by Moms Demand Action, Indivisible Peoria, Change Peoria, and the Black Justice Project.

• Lupus Awareness Month: Mary Alire, president of the Lupus Society of Illinois, accepted a proclamation and noted Melody Green, a city employee who has lived with lupus for 25 years, and her friend Gianna Randall, who recently passed away from lupus-related complications. Green spoke briefly, thanking her supervisor for support during flares and relapses.

• Golden Apple Excellence in Leadership Award: Lindberg Middle School Principal Susan Leahy was honored as the 2019 recipient for the state of Illinois. Councilmember Regan Bach noted that two of his daughters attend Peoria Public Schools and praised Leahy's data-driven, inclusive leadership. Superintendent Dr. Karinne Karas highlighted Leahy's consistent focus on classroom observation, collaborative culture-building, and student growth (double-digit improvement in scores). The award includes a $10,000 prize, split between Leahy's professional development and a school project.

• German-American Relations / Friedrichshafen Sister City: Minister of Political Affairs Helga Barth of the German Embassy was welcomed to recognize decades of partnership between Peoria and Friedrichshafen (Peoria's first sister city, formalized in 1976), German-American cultural ties dating to 1830, and bilateral trade ($3.5 billion+ in annual Illinois exports to Germany). A bronze sculpture commemorating the 40-year relationship, designed by world-renowned artist Alona Stewart, is on display at the Peoria Riverfront Museum through the summer.

Council Administration and Unfinished Business

Executive Session (Collective Bargaining): Council voted unanimously to convene in executive session under Section 2(c) of the Illinois Open Meetings Act to discuss collective bargaining matters.

Semantic Property Purchase Deferral (18-231): Motion to defer the purchase of the Semantic property at the foot of Spring Street until June 11, 2019, approved unanimously.

Shops of Grand Prairie Parking Impact Fee Waiver Withdrawal (19-067): Motion to concur with staff recommendation to withdraw a request to amend a special-use ordinance waiving parking impact fees for the Shops of Grand Prairie (7425 North Grand Prairie Drive), approved unanimously.

Unfinished Business Requests:

• Councilmember Moore requested that the manager bring back a discussion of using public-access television to communicate city information (budget hearings, riverfront updates, etc.) on a 24-hour basis at minimal cost. She noted the city currently uses Facebook and the website but reaches more people via cable television, which many residents watch despite not having internet access.

• Denis Cyr requested an update on the status of the Fitch study (fire-department operations analysis). The manager indicated the draft report should be received by the end of the week and that the manager would follow up on Cyr's earlier request for a report on the city's outstanding loan program by the next day.

• Councilwoman Jensen asked for a report on the cost impact of the city's flood-response efforts, noting the ongoing storm activity. The manager indicated that cleanup costs cannot be reliably estimated until the temporary flood wall comes down (expected late June). In the interim, Jensen requested at least an email update on spending to date.

New Business / Recognition:

• Councilman Graib thanked local television stations (CBS, ABC, NBC affiliates) for pre-empting regular programming to provide live storm and tornado coverage over the past several weeks, emphasizing the public-safety value of uninterrupted emergency information.

• Councilman Regan Bach briefly mentioned the Stanley Cup Finals (St. Louis Blues vs. Boston Bruins) and expressed hope that the Blues—a significant employer and community partner in Peoria—would prevail.

• Councilman Graib raised concerns about the effectiveness of city commissions, noting that several have been created without clear direction, performance benchmarks, or feedback loops to council. He suggested that council and the manager develop a strategic plan for commission oversight and accountability.

• Councilwoman Jensen highlighted the June 8 Wear Orange remembrance walk as an opportunity for council members and constituents to show solidarity with victims of gun violence, noting the ongoing impact of gun violence in the community (reference to the recent death of a four-year-old, Jeremiah).

Duration

The meeting lasted approximately two hours and forty minutes. The evening covered 19 consent-agenda items, 4 regular-business items of substance (distillery, Habitat relocation, fair-commission separation, budget process), plus 4 unfinished/new-business items, 3 proclamations, and an executive session.