PEORIA — City Hall thinks they have found a way to keep the Peoria Rivermen in town while upgrading the Peoria Civic Center without spending much out of the city's general fund.
But at least three council members say a lease must be finalized before any dollars head to the Civic Center.
"We will not fund the money if they don't work out a deal," Councilman Zachary Oyler said. "The financialpart is dead if we don't have a Rivermen deal."
The deal, which will be introduced publicly at the City Council meeting on Tuesday night, proposes for the city to issue $20 million in bonds that would be paid for out of the city's Hotel Restaurant and Amusem*nt taxes which would cover nearly all the of the items not funded by a $25 million grant from the state.
Among those items are the ice plant, which is the machine that chills water to make the ice for the hockey team's playing surface. The machinery is at least 30 years old and beyond its expected lifespan. The cost to replace it is at least $3.4 million, which has been a sticking point in negotiations.
But city leaders say that if the proposed deal passes a final vote on March 14 , it's one more stumbling block removed in the path of keeping the hockey team in town.
"If the ice plant is covered in the agreement, then there is some expectation that they can work things out," said Mayor Rita Ali, who also added the city has no position currently on whether the team should stay, and a lease isn't a requirement in order for the $20 million deal to go through.
"But I think that we have an expectation that the Rivermen and the Civic Center will try to fairly negotiate a lease agreement. That's not a requirement of this, but it's more of an expectation. These are upgrades that we need to make anyway," she said.
Councilman John Kelly agreed that, legally, the council can't make a lease a binding part of the deal. There is a "but," however.
"At the same time, when we approve the bond issue, we can make its receipt depending upon signing a contract with the Rivermen," he said. "We can put a caveat on the money that you have to sign a deal with the Rivermen."
What is the proposal?
In 2020, the Civic Center learned it was getting $25 million toward a wish list of about $45 million to fix several things around the facility. But the state grant didn't cover everything. There was about $20 million left in repairs that include the ice plant. Talks began a while ago to find a way to fill that hole.
The Civic Center has no ability to raise its own revenue because it can't levy taxes or issue bonds. That's where the city's proposal comes into play. The details are this:
The city would first pay down the final years of a $55 million bond, taken out in 2007, to expand the Civic Center's convention area. That's about $6 million to $7 million a year and ends in 2028. Until then, the city would pay only interest on the new $20 million bond, to the tune of about $910,000 a year.
Then in 2029, the city would then begin to pay down the new bond, upping the annual payments to $1.9 million, according to the city.
From the council packet, it appears no money from the city's general fund, which is used to pay for everyday operations, would go to pay down the bonds. Instead, all the money would be from the Hotel Restaurant and Amusem*nt taxes which, in 2022, generated $10.6 million. That's typical for HRA, which has hovered around $10 million a year since 2016, with the exception of the two years affected by the COVID-19 pandemic.
The Civic Center does get money each year to run the building. In 2022, it was about $1.6 million, up from $1.4 million in 2016. The two COVID-affected years of 2020 and 2021 saw the PCC get $134,546 and $798,356, respectively.
Under the proposed deal, City Hall would commit to giving the Civic Center at least $1.2 million a year for operating expenses. Most of that would come out of the HRA fund, but some would have to come out of the city's coffers. In the council packet, it's estimated that if revenues keep climbing by 1% annually, the city would have to kick in an additional $310,000 over six years to meet the $1.2 million floor.
However, if the HRA revenue drops by 1%, that would climb to $5.1 million.
More:Running out of time: With no lease for next season, Peoria Rivermen face murky future here
The build-up
The proposal first came to light on Feb. 14 when 5th District Councilman and former Rivermen player Denis Cyr posted in a fan forum on Facebook the team was saved and that details would be coming on Feb. 28. Fan speculation was through the roof, and more than 50 people showed up at the council meeting that night to show support for the team.
Cyr later told the Journal Star the bare bones of the tentative deal. Three days later, Ali tempered his statements by putting out a news release stating there was no deal yet, noting such comments were "premature."
"The city has been exploring options to assist the Peoria Civic Center with their capital needs, including the ice plant, through additional bonds paid from Hotel, Restaurant, and Amusem*nt Taxes," she wrote. "Any agreement for additional debt financing requires the approval of the Civic Center Authority and the Peoria City Council."
Ali went on to say the Civic Center Authority and the City Council will meet Tuesday, but also said the authority and Rivermen need to negotiate a new lease.
"That lease is not, and should not be, the responsibility of the City," Ali wrote, "We expect the two parties to negotiate reasonably and in good faith."
Said Rivermen co-owner Bart Rogers: "The Rivermen are watching carefully and with great interest as the City Council and Civic Center do their work. We have always welcomed the opportunity to discuss our expiring lease."
Rogers had no further comment, saying the Civic CenterAuthority and the team had agreed not to discuss the matter in public until it was finished.
Civic Center Authority chairman Yvonne Greer-Batton did not respond to a request for comment.
More:Will the Rivermen stay in Peoria? A deal is in the works, says city councilman
What happens next
The Civic Center Authority, the governmental body that oversees the building, discussed the matter at its meeting Feb. 23. The commissioners learned the money from both the city and the state would not cover everything that is needed in the building due to inflation and higher costs.
Greer-Batton said at the meeting that the money was independent of a lease. She did say the board had made "a commitment with the city to negotiate (with the Rivermen) in a fair and equitable manner." As such, she said at the meeting that she "expected the same in return."
Now, the commissioners will wait to see what the council does Tuesday and then act at a special meeting on March 13, a day before the city would possibly give final approval to the deal.
If that were to happen, then the city could begin the process of issuing bonds. The ice plant would not likely be replaced until 2024 as the dates are already booked or scheduled for the coming year.
According to the agenda item in the City Council packet, "The City would work with the Civic Center Authority and coordinate this debt with the capital request made of our legislators, and the discussion of what to do with future HRA taxes remains a Council decision in 2029. As a sign of good faith to the Rivermen, the Civic Center Authority has shared open dates for the 2023-2024 season with the Rivermen."
Sid Ruckriegel, a councilman who serves as the city's liaison to the authority, said in an emailed statement that "the City recognizes the importance that the Civic Center plays to the vitality and livability of our community. That is why the Council will be discussing a proposed capital plan on Tuesday night. The City also recognizes that on a separate parallel path the Civic Center and the Rivermen will be having discussions on a potential lease as the current one expires. As the Mayor has said, it is the expectation that both parties will negotiate in good faith."
'Bigger than sports':Rivermen players speak out on lease issues with Peoria Civic Center
What do other council members think?
Both Kelly and Oyler are adamant that a lease is done before the bonds are issued.
"The way that I see it is that no deal is no deal," Oyler said. "If they don't work out a deal, then we don't fund the capital means. It's not just the ice plant. It's replacing the arcade on the outside of the building, which is a $10 million fix."
Kelly argued the Civic Center is akin to a park, and parks aren't made to make money or even break even.
"It's a public asset that is not designed to make money. It is designed to be a community asset like Glen Oak Park, which doesn't pay for itself," Kelly said. "It was never designed to pay for itself. If the Rivermen don't make enough money for the Civic Center, then too bad, they are a community asset."
As for the Civic Center authority, Kelly said, "They need to get to the business of serving the community."
Councilman Chuck Grayeb, whose district includes downtown, noted how the two groups have worked together for years. He believed a deal would come through and that downtown would continue its rebound.
"I think what this boils down to is that the Rivermen draw people to our downtown, and that's a real positive for the downtown and our region. I don't think the city or the Peoria Civic Center can afford to lose a strong and energetic segment of our population that enjoys Rivermen hockey," he said. "To go the other way would be irresponsible. We need to continue to work to make the Peoria Civic Center the huge economic engine to the city and the region that it is."
Councilman Andre Allen said his hope is that an agreement between the two is reached. But he noted there are many things that need to be fixed at the Civic Center. While he didn't see why an agreement would not be reached, Allen said the council's vote was independent of a lease agreement.
"I want the Rivermen to be here another 41 years," he said.
