Renewing Downtown

Throughout the past several months, more and more news has surfaced about the Town of Normal's downtown renewal plan. For the most part, students are aware that the Town is embarking on some type of multi-year plan to invigorate the downtown area, but how will this plan impact Illinois State University? The Downtown Student Advisory Committee of the Student Government Association believes the plan will significantly benefit all university constituents as well as the entire community at large. We support the Town of Normal and its efforts to enrich the downtown culture through the addition of new stores and retailers and through the general enhancement of the downtown environment. The plan's vision is to create a downtown that serves the needs of all people living in the Town of Normal, and the Downtown Student Advisory Committee is convinced that it will. Since the inception of our committee, the Town Council and staff have agreed to work extensively with the student body to ensure that the plan will ultimately serve their needs. I've continued to urge all students to become actively involved with the downtown plan, as our work today will leave a lasting mark on all future student generations.

Below are several "common questions" brought to the Downtown Student Advisory Committee and the Town of Normal that pertain to the information you requested. Our responses, written with the help of the Town Administration, are listed below. I would suggest that you also visit the Town's website (www.normal.org) for more detailed information on each of the plan's major initiatives. Please contact me at 438-7936 or by email (namarou@ilstu.edu) if you have any further questions.

Q: What is the partnership with Illinois State University regarding this project?

The conference center/hotel project represents a partnership between the Town and the University. Illinois State University will fund a parking structure that will be attached to the hotel. Approximately one half of this 500 space parking structure will be specifically reserved for customers of the conference center/hotel facility. The remaining spaces will be available for downtown customer and employee parking which, consequently, will save the Town millions of dollars that would otherwise have to be spent on additional parking lot construction. Also, the University is likely to be one of the largest customers of the conference center. In that regard, the Town considers this a "joint project" with Illinois State University and, therefore, the University will be involved in all decisions associated with financing, construction, ownership, and operation of the conference center/hotel project.

Q: Is the downtown area truly a depressed area?

In the judgment of the Town Council and staff, the downtown area could be classified as "economically and physically depressed". The economic base of the downtown area has slowly deteriorated over the last several years. Further, there is ample evidence of physical deterioration, both in public infrastructure and private buildings, throughout the downtown.

Q: Do the citizens of Normal want these types of projects?

The Downtown Renewal Plan was the result of a 3-year planning process in which hundreds of Normal residents were involved. The major new facilities reflected in the plan were identified as desirable elements by those residents involved in the planning process.

Q: Is it right to force out a business simply because someone doesn't like what the business sells?

No. The Town of Normal does not intend to "force out" any existing businesses. In fact, the Town hopes to create an environment in the Downtown area where all existing businesses can flourish and new businesses will be attracted.

Q: Are the owners of the properties that the Town plans to acquire getting the information, compensation and respect they deserve?

The Town has put forth a great effort to communicate with all existing businesses and property owners within the Downtown area. A monthly newsletter is distributed to all businesses advising them of current activities associated with the Downtown Renewal Plan. In addition, downtown business and property owners have continued to be invited to regular update meetings. Finally, downtown business owners and property owners are regularly encouraged to stop by the Downtown Renewal Office, located at 101 North Street, if they have any questions or concerns. As far as the Town's acquisition of properties is concerned, the Town has and will base all acquisition offers on qualified appraisals that reflect the current market value of those properties. Further, the Town is required to follow the Uniform Property and Relocation Act, which is a federal law intended to protect the rights of property and business owners.

Q: Is there a need in the business community for the types of retail and business space being proposed in Downtown Normal?

A comprehensive retail study completed by Robert Gibbs and Associates in 1999 indicated that there was considerable need for additional retail space in Downtown Normal. Those findings have been confirmed by a second retail consultant who was hired by the Town in the summer of 2002, Mr. Jack Abelson, who is in the process of creating a Retail Development Plan for Downtown Normal. A number of retailers currently not in the area have expressed serious interest in locating in Downtown Normal because of the proposed redevelopment projects included in the Downtown Renewal Plan.

Q: How can the Town ask for $21.8 million from the State and Federal governments when both are facing huge deficits?

The funding that the Town is requesting is from funds that are set aside by the State and Federal governments for municipal and state public transportation facilities. Therefore, if the Town does not to pursue this funding, the federal and state dollars will most certainly be awarded to some other community.

Q: Why a conference center/hotel in Downtown?

The need for conference center/hotel was identified during the lengthy community planning process involving hundreds of Normal residents. Many other communities across the country have successfully undertaken the construction of conference center-hotels to serve as a stimulus for revitalization of their downtowns. Clearly, the new Sheraton Hotel & Conference Center in Downtown Normal will be of tremendous benefit to the community as well as to Illinois State University. The facility will also attract many new retail customers to the downtown area and it will serve office employers that locate in the area. A conference center/hotel market study performed in 2000, and updated in 2002, indicated there is significant unmet demand for a first class conference center/hotel to be located in Downtown Normal near the ISU campus. The study found that there are virtually hundreds of group meetings and conferences that would be attracted to Illinois State University if there were high quality meeting and lodging facilities close to campus. Hosting large meetings and conferences benefits the entire Bloomington-Normal economy.

Q: Will the hotel have a restaurant?

Yes. The conference center/hotel will house a high quality full service restaurant with breakfast, lunch and dinner menus.

Q: Will the restaurant be leased out or operated as a Town owned food service?

The restaurant within the conference center/hotel will be operated by a private entity.

Q: Will the bar be leased or operated by the Town?

It is expected that the conference center/hotel will contain a lounge which will be operated by a private entity.

Q: When did it become clear that none of the hotel operators were interested in owning the hotel?

The ten (10) developer teams that expressed an interest in the downtown conference center/hotel project submitted multiple financing proposals, including private ownership and financing. All of the development proposals that contemplated a top quality conference center facility and a full service hotel included the need for significant financial subsidy by the Town. After carefully analyzing all of the financing options, it became apparent that the use of tax-exempt bonds to finance the construction of the hotel would require the lowest amount of subsidy by the Town. In order to use tax-exempt bonds (which are bonds in which the purchasers are not required to pay state and federal income tax on the interest income), federal tax law prohibits the facility from being privately owned. That is the reason that a not-for-profit public corporation will be created to own the facility. However, the hotel will be operated by a private hotel management company that will hire all of the employees and have responsibility for all day-to-day operations of the facility.

Q: Who is obligated to pay the hotel bond?

Construction costs associated with the meeting space portion of the conference center/hotel (approximately 13,000 square feet) will be paid by the Town via General Obligation Bond proceeds. The Town will retire these bonds from tax revenue (sales taxes, hotel/motel taxes, and property taxes) that is generated by the conference center/hotel itself; and from a portion of the revenue from the ?% sales tax that was enacted by the Town in March of 2001. The hotel portion of the facility will be financed through tax-exempt hotel revenue bonds. These bonds will be repaid from operating income from the conference center/hotel. The Town of Normal will provide a "back-up" guarantee for approximately 45% of the hotel revenue bonds (roughly $9 million). However, the projected conference center/hotel revenues are significantly greater than the amount needed to make the annual bond payments. The actual conference center/hotel would have to perform very poorly before the Town would have to pay out any additional money for bond payments.

Q: If the Town is the owner of the hotel, then does the Town pay property taxes to itself?

Yes. The conference center/hotel will be owned by a public corporation that is created by the Town of Normal. The facility will pay real estate taxes to the Town of Normal and to all other local taxing bodies, such as Unit 5 Schools, McLean County, Normal Public Library, and Normal Township, the same as do all other Town of Normal businesses.

Q: What are the requirements for a Tax Increment Finance District and how could Normal qualify?

Based upon standards that are mandated by Illinois law, an area must meet minimum levels of blighting characteristics in order to qualify for TIF designation. Based upon preliminary findings of the Town's TIF study, it appears that Downtown Normal will easily qualify for TIF designation given the depressed nature of its physical and economic condition.

Q: Will property owners within the TIF area be subjected to special assessments?

No.

Q: Do the taxing bodies get any tax dollars after the TIF designation runs out?

Yes. After the TIF designation is discontinued, either at its statutory time limit (23 years) or by earlier Council action, all property taxing bodies will receive 100% real estate tax revenue generated from properties in Downtown Normal. Prior to that, these taxing bodies will continue to receive property tax revenues from the properties within the TIF area while the TIF designation is in place.