The Pere Marquette/Marriott Project

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Because of deadlines, the following story about the Hotel Pere Marquette/Marriott project was already completed when news broke that the city of Peoria decided to cancel its redevelopment agreement with EM Properties.

The Peorian decided to proceed with the story because the situation was such it could have changed again by the time this edition was published. EM Properties president Gary Matthews said his office is "working as diligently as possible" to still make the project proceed.

Also, officials believe something can and will be done with that property to make it viable for a new hotel because of its importance to local convention and tourism business.

The decision to withdraw the redevelopment agreement, said Peoria City Manager Patrick Urich, "was not meant to understate the need for a convention-type hotel in downtown, to understate the need for other hotel space or to understate the need to keep the Pere Marquette a viable hotel property in the city. We understand the importance of these items to the city's convention and hospitality industry."

Bob Marx, CEO of the Peoria Area Convention and Visitors Bureau, said the hospitality industry hopes the project can still be salvaged and if not that "somebody will see the value of the site and the plan and pick up the baton and run with it. It is very important to the entire area that that happens."

Marx said the fact Marriott Corp. believed enough in the project that it signed a 30-year agreement with EM Properties "will be huge" for any developer considering the site. Marriott, he said, is very selective in the projects it chooses to be part of and always leads to other new development because business wants to be around a Marriott property.

The Peorian will continue to update readers on the status of the project on our website: www.thepeorian.com

Gary Matthews saw quickly that taking on rehabilitation of the Hotel Pere Marquette and connecting it to the Peoria Civic Center would be intimidating, but he didn't let that creep into his psyche.

Why would he? When he first started considering it in 2008, the economy was going great and financing was not an issue. The Peoria Civic Center expansion was complete and ready for new, larger conventions. There was interest by major hotel chains to join in a city many felt was being underserved.

"I thought it was a great opportunity not just for me, but for the hospitality industry, the Civic Center and the whole community to really flourish. The downtown infrastructure was already in place, which you don't find with cornfield additions and the community was ready for this," Matthews said recently.

"Make no mistake, I think the community still is ready for this. It has just taken longer than we expected. But we will get it done. It's a go," he said, more than three years after he started working on the project and nearly that long since he announced it.

The plans call for Matthews to acquire the Pere Marquette and rehabilitate it, then partner with Marriott Corporation for a new Marriott Courtyard tower and connect the two to the Civic Center via skywalk. The total price, including a new parking deck and acquisition of properties on Main and Monroe streets to accommodate the Marriott, is about $100 million. It will be paid through a combination of public and private financing, tax increment financing and government tax credits.

When originally announced in the fall of 2008, it was said it would take about two years to complete.

"If we had approved the project even six months earlier than what we did, it would be built by now," said Peoria Mayor Jim Ardis, an ardent supporter of the project. "Nobody saw the economic tsunami coming."

When that "economic tsunami" – otherwise known as the biggest recession in decades – hit in early 2009, banks suddenly quit lending money for economic development projects. Thus Matthews was unable to secure the financing he needed to first buy the Pere Marquette from the Kansas City firm that currently owns it, then buy the other buildings in the block to make way for the Marriott tower.

"There is no question financing has been the biggest hurdle. The recession hit right after we announced it. I never dreamed it would happen this way because we only needed to finance 30 percent of the total project. It was can't-miss, in my opinion," Matthews said.

He refused to fold up his tent and go away. The plans changed a couple times and he had to go before an increasingly skeptical – and reluctant – City Council a couple more times, but he moved forward.

Now, Matthews said, financing is ready and he is nearing completion of the Pere Marquette acquisition. No date for closing has been set yet, but he believes the project will be completed by the end of 2013.

"We're working to get things started this fall, focusing first on the Pere Marquette and the parking deck, which will take a year to year and a half," he said.

The Pere Marquette rehabilitation will be more than just some paint and patchwork, Matthews noted. He plans to replace all mechanical systems and plumbing and renovate each room and public area of the building. The three-meal hotel and lounge area will remain in the Pere to serve convention patrons; the Marriott Courtyard will have a restaurant, as well.

Matthews believes the project will attract more restaurants to downtown as well as more hotels. While the Pere/Marriott project will add about 400 rooms to the city, much more is needed to accommodate the kind of conventions the Civic Center believes it will attract once new and quality space is available.

"We believe there will be more business than the Pere project alone will be able to handle, but that will spur more new hotels and restaurants," said Jim Wetherington, general manager of the Civic Center. "Many convention clients are waiting to talk with us. They know what we have here, but they also know we need more hotel rooms, more quality hotel rooms. Right now we don't have the quality we need to step up to the next level."

Marketing strategies are ready to go once Wetherington and his staff and the Peoria Area Convention and Visitors Bureau get the nod to start selling the city and the Pere/Marriott project along with the Four Points by Sheraton Hotel, which took over the Holiday Inn City Centre earlier this year and is investing in renovations.

"All the things we've got going on – those hotel projects, the new airport, the Museum project and Caterpillar Visitors Center, Bass Pro Shops – make up the whole package we will have at our disposal to sell. We'll have a pretty good story to take out there to sell. But we have to have actual work going on. We can't sell a thought," Wetherington said.

Conversely, Matthews said, the real centerpiece to his project and getting Marriott and financiers interested is the Civic Center and how modern and useful it is to all kinds of conventions.
The other new interests, such as Museum Square, will be wonderful for tourists, as well. That adds the leisure element to the downtown picture. "For a business plan to be perfect you have to have it covered on both ends. We will," he said.

The whole package also will help Peoria approach multiple convention markets, including international ones thanks to the presence of Caterpillar, said Bob Marx, CEO of the Convention and Visitors Bureau. "It's out there and if we don't do it, somebody else will," he said.

He believes the new projects will create what is known in the business as "the halo effect" and that other new development will follow. "The halo effect exponentially will be tremendous. The urban renewal effect on downtown will be something," he said.

But the linchpin to all of it, Marx said, will likely be the Pere Marquette/Marriott project. "No one project is going to do it alone, but a lot of other hotels will want to come in because of the Marriott brand. It will spur so much."

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