Ardis: State of the City is proud, but much work lies ahead

As it continues to bask in the glory of being named an All America City for the fourth time, Peoria will continue to see growth and a revitalized downtown -- with unprecedented help from City Hall -- in 2014, Mayor Jim Ardis said in his annual State of the City address delivered Tuesday.

Ardis told nearly 600 people at the event at the Peoria Civic Center, sponsored by the Peoria Area Chamber of Commerce, that such growth in the Warehouse District and other parts of the city are vital to Peoria's future.

He announced formation of a new Downtown Development Corporation to help streamline development downtown and in the Warehouse District.

"The CEO Council and the City of Peoria have been working on this concept since the middle of 2013. Fundraising is underway and the board is beginning to take shape. There is nothing more important to the economic future of this region than the vibrancy of Peoria's downtown and I expect great things from this organization," Ardis said.

He further said City Hall is embarking on a campaign to remake its image from difficult to work with to helping find and facilitate development projects. "The message is that when it comes to helping grow business, our first words won't be "No, you can't do it". Don't mistake that for everything you ask for will be yes. But we're working towards an attitude that we want to help you accomplish your goals. Let's see what we can do to help you get there. Let's work together to make this project happen to benefit your project, the existing business and residents and the area and the city as a whole. I believe this simple reminder to look for positive solutions will enhance the development process going forward," he said.

Ardis reminded his audience of the positive developments enjoyed in 2013, including the completion of renovation work and reopening of the Hotel Pere Marquette and near-completion of the adjoining Marriott Courtyard. He spoke about the plans of Running Central to move from Peoria Heights into the downtown Warehouse District with what will be a unique retail experience. He discussed plans for the Louisville Sluggers Sports Complex near the Shoppes at Grand Prairie, which has been a project not without controversy.

Redevelopment has started in the Warehouse District, with new roads and sidewalks and the first new restaurant, Sugar. And redevelopment could continue on another important building in Peoria's past, the Madison Theatre.

Ardis spent much of his speech discussing one of his favorite topics, education. He reported learning at a recent U.S. Conference of Mayors that Peoria is hardly alone among mid-sized urban areas in struggling with quality primary and secondary education for its residents. He said it will take a community-wide effort to end that struggle and he challenged audience members to ask themselves how they can help.

"Our community cannot move forward without well-educated, skilled workers for both white collar and blue collar jobs. We have to do more and we have to do it better. In my opinion a community focus on education issues and solutions should be priority number one for everyone. Ask yourself what you, your company, your church or other organizations are doing to move the ball forward?

"Even though the City Council doesn't have any governing control over our schools, I am committed to keeping a focus on educational performance in Peoria. We have to do better. The quality of our education system is the number one factor influencing our ability to grow Peoria and we're not going in the right direction," Ardis said.

He did, however, recognize one person for his efforts to improve education in the community. Ardis presented the 2013 Mayor's Outstanding Community Service Award to Dr. Bill Collier. The former superintendent of Dunlap schools, Collier has served as the mayor's unpaid education liaison the past eight-plus years.

He also gave special recognition to the city's Sustainability Commission, chaired by Dr. Amir Al-Khafaji, which focuses on economic development, social equity and sustainability initiatives for the future. The list of the commission's 2013 accomplishments is long and includes compiling the information the City Council needed when making its decision on the water company buyout option, hosting the third annual executive summit that was attended by 42 of the most prominent national leaders in infrastructure, and the fourth annual Christmas toy giveaway in conjuncture with the Peoria Housing Authority.

One of its most important accomplishments was ensuring that a financially strapped Bradley University students was not only able to obtain his degree but helped the city gain a civil engineer.

Ardis spoke about the City Council's decision to adopt its first-ever, two-year operating budget. He said the continued slow economic recovery and stale property valuations in the city "inspired us to plan for more than just the year ahead."

He spoke of improvements in and continued investment in public safety and said the city's commitment would not wane.

Finally, Ardis praised the efforts of local government units in the region for their response to the Nov. 17 tornadoes that heavily damaged parts of Washington, East Peoria, Pekin and Morton. He especially noted Washington Mayor Gary Manier's "true courageous mayoral leadership" in the aftermath of the storm.

"This is the finest example of mayoral leadership and courage I have personally had the privilege of witnessing," he said before noting Manier was not at the Peoria event because he was in Washington, D.C. to attend President Obama's State of the Union address as the guest of U.S. Sen. Mark Kirk.

"There are always so many topics to mention and not enough time to say it all. As I bring this year's address to a close, there are a few things that I want to reinforce. First of all, we are an outstanding community. We're an All-American City. We should all be proud. Very proud," he said.

Cat reports profit, albeit a lower one, for 2013

Caterpillar Inc. on Monday reported that while sales and revenues were down again, the fourth quarter profit was up from a year earlier and that other signs were pointing to stability in 2014.

With record operating cash flow and plans to buy back another $10 billion in stocks, as well as improved market position, the company chose to accentuate the positive in its fourth quarter and year-end 2013 results, which included an overall profit.

Caterpillar had sales and revenues of $55.66 billion in 2013, down 16 percent from $65.88 billion in 2012. Profit for the year was $3.79 billion, or $5.75 a share, a decline of about 33 percent from the 2012 profit of $5.68 billion, or $8.48 a share.

In the fourth quarter sales and revenues were down 10 percent from a year earlier at $14.40 billion, from $16.08 billion, but profit was higher at $1.003 billion, or $1.54 a share, compared with $697 million, or $1.04 a share, in the fourth quarter a year ago. Even without two extraordinary items that added to the profit in the fourth quarter of 2012, the company had a higher profit in 2013, it said in a news release.

The culprit hampering sales and revenues was, as expected, a sharp decline in the mining industry. Sales in that industry were down even more than Caterpillar expected coming into 2013.

But the company reported $9 billion in operating cash flow in 2013.

"In such a challenging environment, I am proud of the way our employees came together in 2013. Despite a sales and revenues decline of about $10 billion, we set a record for operating cash flow, strengthened our balance sheet and improved our overall market position for machines. We continued to improve safety in our facilities and the quality of the products we ship each day," said Chairman Doug Oberhelman in a prepared statement.

"Cost flexibility is critical to our strategy and was a significant focus in 2013 as we took substantial actions to help maintain profitability as sales declined. It wasn't easy, especially for our employees who endured an incredibly tough year, but the actions we initiated helped us deliver strong operational performance in 2013," he said.

The company announced it plans to repurchase $1.7 billion worth of Caterpillar common stock during the first quarter, which would complete a $7.5 billion repurchase authorization that was set to expire on Dec. 31, 2015, which was originally approved by the Board of Directors in 2007.

Also, the company said, the board has approved a new $10 billion stock repurchase program, which will expire on December 31, 2018.

"The completion of our previous program and the decision to announce a new $10 billion program are a result of our record cash flow, the strength of our balance sheet and our confidence in the long-term future of Caterpillar," Oberhelman said.

Wall Street reacted favorably to the results, partly because the revenues and profit beat the projections of analysts; they'd predicted a profit of $1.28 a share. It snapped a string of five consecutive quarters during which the profit missed the analysts' estimates.

Caterpillar stock ended the day's trading on the New York Stock Exchange at $91.29 a share, up $5.12 a share. More than 22 million shares, or more than four times the daily average were traded.

In a meeting with reporters Monday, Group President and Chief Financial Officer Brad Halverson said the company found many reasons to be encouraged going into 2014, including strong sales in its power systems division and the fact margins were back almost where they should be in construction equipment revenues.

Noting that most of the sales decrease was in mining, Halverson said the company isn't overly concerned or second guessing itself in its acquisition a few years ago of Bucyrus Mining Equipment Co. of Milwaukee. "It's easy to talk about how things are in the short term but in the medium or long term we are going to expand the value of what we deliver to our mining customers. Mining will turn around," he said.

Remarking about the significance of the record cash flow, Halverson said that when Caterpillar's balance sheet was not strong coming out of recession of 2008-2009, with a debt-to-capital ratio of about 50 percent, so cash flow became a top priority. Today, that ratio is below 30 percent, its lowest in more than 25 years. "Our cash position allows us to do what we want to do, to grow and add value for our customers, make sure we have a well-funded pension plan and a strong return to our shareholders," he said,

Regarding 2014, Halverson said sales and revenues in North America picked up in 2013, which was a bright spot and is a good harbinger for this year. "Now if we could get an infrastructure bill, that would be a big plus," he said, referring to the need in the U.S. for highway and infrastructure improvements.

Caterpillar reported that it lowered inventory by $2.9 billion in 2013 while its dealers lowered their inventory by $3 billion. The reductions, the company said, were "a significant sales and production headwind" but that "we believe the significant impact on our sales is largely over."

The company said its expectation of lower sales and revenues, particularly in mining, caused it to focus on reducing costs in 2013. It did so to the tune of $1.2 billion by closing some small facilities and the downsizing of others and reducing nearly 2,000 management and support positions.

Caterpillar improved its market position for machines again in 2013, the third consecutive year it has done so, and announced sales and revenues in China were up more than 20 percent in 2013 over 2012.

"There was a lot of sacrified in 2013 by our employees and their families," Halverson said, adding those sacrifices will make the company stronger in the long run.

In the short term, however, Caterpillar isn't expecting too much of a jump in 2014. It's outlook for the year has sales and revenues in 2014 coming in again at about $56 billion, plus or minus 5 percent, with profit about the same as well.

"We see some signs of improvement in the world economy, which should be positive for sales in our Construction Industries and Power Systems segments. However, despite our expectation that mine production will continue to increase, we expect mining companies to further reduce their capital expenditures in 2014. As a result, we're expecting sales in Resource Industries to decline modestly, Oberhelman said. "We've already taken a number of restructuring actions to help improve our financial results and expect to take additional actions in 2014. We continue to be cautious and are making the tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound."

Home sales remained stable in 2013

In a still-shaky economy, stable is good when it comes to home sales in central Illinois, said officials of the Peoria Area Association of Realtors.

That was basically what 2013 brought: Sales increased by just 18 houses, or 0.4 percent, from 2012, but it marked the third consecutive year sales increased, regardless of the amount.

That along with other encouraging signs has Realtors feeling positive about 2014, said Phil Harvey, president-elect of the Association.

"We like stability and in our eyes, this represents slow yet steady growth. We're pleased with the results coming off the strong gains (17.1 percent) in 2012," Harvey said Tuesday in a news conference at PAAR offices.

There were 4.946 houses sold in 2013, up from 4,928 sold in 2012 and 4,210 in 2011.

The key to the gain was that 398 homes were sold in the fourth quarter, 18 percent ahead of the 327 sold in the final three months of 2012. Some of that fourth quarter gain, however, was the result of victims of the Nov. 17 tornadoes that heavily damaged parts of Washington, East Peoria and Pekin buying houses already on the market instead of rebuilding.

"The dramatic impact of this continued stability is clearly seen when you look back seven years," Harvey said. "While not quite back to 2007 levels (when 5,820 homes were sold), at a minimum the market has stopped the downward trend we saw for five years between 2007 and 2011, a trend that was only partially alleviated by the boost from tax credits. 2012 was a turning point in central Illinois, with significant recoveries in nearly every housing statistic, and 2013 maintained this trend."

Harvey said the Association finds encouragement in the fact the average selling price declined in 2013, from $146,292 in 2012 to $141,215. The median price dropped from $121,900 to $118,000.

The reason for the decrease is that more people were looking for homes in the "less than $75,000" range, which he said signifies there were more first-time buyers in the market.

"That means there will be sellers moving up into the higher ranges in the near future, so we should be seeing some activity. This is an excellent time to be looking," he said.

Harvey said mortgage interest rates are still low enough to be attractive to buyers, though obtaining a loan is not as easy as it was a few years ago, before the housing bust that swept the country. "A few years ago you only had to have a pulse to get a loan. Now you need to qualify with good credit. But there are loans available for those who do qualify," he said.

Regarding the impact of the November storms on area real estate sales, Harvey said it is too early and difficult to estimate what the ultimate effect will be. It is likely there will be a lot of housing construction activity starting this year as rebuilding takes places in the effected community, which could be a boon to the construction industry, but he said it could take several years for recovery to be complete.

Other areas who have in the past experienced devastation from tornadoes have found that 20 to 25 percent of the victims choose not to rebuild their houses; rather many leave the area or choose instead to buy another house on the market.

"We know many have already done that," he said.

Overall recovery of the housing market has been sluggish of late, but Harvey said the Association is confident it will pick up. The available inventory is down but there are good houses on the market, he said.

"We think recovery is occurring because there is a lot of pent-up demand. Another factor is that basically, real estate comes down to job. The local job market has been sluggish but we are seeing signs it is picking up. So we think the recovery will be sustained in 2014," he said.

Other highlights from PAAR's 2013 results include:

• Inventory was 2,111 homes on the market at the end of the year, the lowest number since 2007 and a 3.6 percent decrease from 2,190 on the market at the end of 2012.
• Part of that is because homes are staying on the market for less time before selling. In 2013 a home remained on the market only an average of 82 days, 15.5 percent better than the 97 days it took, on average to sell a house in 2012.
• The largest per-category increase in Decembe was in the "less than $75,000" category, which saw a 10.2 percent increase in activity. The $400,001 to $500,000 category saw the largest drop in activity, 36.3 percent.

Doc Watson: St. Jude tour humbling; need for help is growing

I toured the St. Jude Children's Research Hospital in Memphis last month to learn more in person and get a feel for this unique place. Like the Peoria Midwest Afflilate, a visit leaves you upbeat and humbled. The young patients generally are smiling, not moping, despite their hardship. It's the only hospital that can be described as "cheery."

St. Jude kids are made to feel at home, right from the get-go. The check-in office has desks and chairs that are lower than ones you find at your work unit. They're at the children's level. If it's a bit harder for the parent to sit at, so be it. Everything is meant to make the kid's visit more comfortable, and it starts from the first stop.

While there getting free world-class treatment, the kids can opt to do arts and crafts or play games. There's a teen-friendly hang out room where parent and grown up visits are frowned upon. There are many pieces of art hanging on the colorful walls of the Teen Art Gallery, where each year's best work produced by patients finds a home.

The Memphis facility treats about 250 patients per day, most on an out-patient basis. It has only 78 inpatient beds on site. They like the patient to stay nearby, but not in the hospital overnight unless absolutely necessary. If the patient will be in Memphis getting treatment or surgery for a week or so, they and any accompanying family member(s) will stay at the Grizzlies House, sponsored by Memphis' NBA team. It has the feel of a first-class hotel.

If the patient needs treatment for a few months to a half year, they'll stay at The Ronald McDonald House. If they need to be in Memphis longer than that, they'll stay at the Target House, which is set up and feels like nice apartment living. There is no boarding charge to the families — ever.

The St. Jude Children's Research Hospital is more than a hospital, though. It has rooms for kids to attend school, from kindergarten through grade 12. There's a pharmacy on site so the patients can get their meds easily without having to run to Walgreens. There's a wonderful, new place to eat in the facility, the spacious Kay Cafe, which features delicious, nutritious food, including an awesome mac-n-cheese recipe given to them by a patient's family. At their expansive gift store on the campus I stocked up on St. Jude gear.

While the focus of the day-to-day activity is getting the children to and from their treatment, the on-going research is equally important to the cancer-fighting cause. Since it opened in 1962, the overall survival rates for childhood cancers have improved from less than 20 percent then to 80 percent today! St. Jude pioneered the ever-evolving protocol treatment — a combination of chemotherapy, radiation treatment and surgery — that's been given to affected children for decades. All research performed there is freely shared with the world wide medical community, and it goes beyond pediatric cancer research.

St. Jude's researchers helped develop a cure for sickle cell disease with a bone marrow transplant. If you got a flu shot this year, thank St. Jude, as the concoction is created there each year. The Chilli's Care Center, opened in 2007, merges patient care and research with rapidly evolving CT and MRI technologies, with more cutting-edge equipment on the way. It's high tech stuff that I have trouble wrapping my brain around even after having it explained.

The operating cost of The St. Jude facility has grown to $1.9 million — daily! That budget comes mainly from public contributions. Hence, the reason I bug you to buy a St Jude Dream Home ticket now for the upcoming April 16 giveaway.

Buy your ticket between now and Feb. 28 and be eligible for the "Early Bird" prize: a $3,000 shopping spree from Kroger. There are also another dozen or so high-end prizes that are valued at around $1,000 each. The grand prize dream home features around 2,400 square feet of living space, with four bedrooms and two and a half bathrooms. It's being built by Dean Custom Builders in the Sommer Place subdivision in Edwards and is valued at around $330,000.

Tickets can be purchased on line at dreamhome.org or at Kroger locations in Peoria and Tazewell counties or charge by phone at 800-390-3196.