The Washington City Council recently approved an agreement with P-Six Sunnyland LLC, headed by Dave Paskert of Chase Real Estate Group, regarding the redevelopment of Sunnyland Plaza. Under the agreement, Mr. Paskert will purchase the Plaza property and make substantial improvements to enhance its commercial viability.
Preliminary plans call for the demolition of a portion of the existing building; improvements to facade, parking and signage; development of more marketable commercial spaces; and the marketing of new development on two proposed outlots. Long-term lease extensions with Sunnyland Cinemas and Dollar General have been secured.
Mr. Paskert is president of Chase Real Estate Group and, as such, manages the Plaza on behalf of its current owner. The City is very encouraged at the prospect of having the Plaza returned to local ownership. Paskert and his associates have solid experience in successfully marketing and managing commercial properties.
The City of Washington and neighboring residents have been troubled about the deteriorating condition of the Plaza. The once-vibrant shopping center lost its anchor tenant, Sullivan Foods, in 2004 and has suffered from underutilization and neglect ever since. The City is concerned that, if this trend continues, the property would become a blight on the surrounding neighborhood, necessitating demolition and the resulting loss of local tax base. The Plaza’s 2008 property taxes totaled nearly $33,000. School District 50 and Washington Community High School would sustain the greatest financial loss if the building were to be demolished and removed from the tax rolls.
The agreement comes at an opportune time. The cities of East Peoria and Washington are jointly focusing attention on the redevelopment of the Sunnyland area. Plans have been completed that address the physical function of the Illinois Route 8 corridor, including infrastructure, streetscape, economic development and land use. The Plaza is central to the rejuvenation of the surrounding area. Improvements to Route 8 and the planned extension of Summit Road between Route 8 and Centennial will also benefit the area.
The Sunnyland Plaza site is located within Washington’s Enterprise Zone (EZ). In 2005, Washington extended the life of its EZ to 2016. East Peoria has recently expanded its EZ to include those Sunnyland properties west of Summit.
In order to facilitate the project, Washington will extend redevelopment incentives to P-Six similar to those offered in its Downtown TIF District. The City would reimburse P-Six 20 percent of its actual redevelopment costs, but only if there are corresponding increases in sales tax revenues generated from Sunnyland Plaza businesses.
The redevelopment of the property and the anticipated sales tax growth is a win-win. The City and the developer will equally share the increased sales tax revenue, the appearance and viability of the Plaza will be enhanced, the existing property tax base will be preserved, and the neighborhood will benefit from expanded commercial services and resulting business activity.
Morton Community Bank (MCB) will provide financing for the P-Six undertaking and has requested the City’s endorsement of the project in the form of a limited guarantee. The guarantee provides that, if P-Six defaults within the first five years of ownership, the City will pledge monthly interest payments to MCB for the period of time from the default to the five-year anniversary date of the agreement in an amount not to exceed $38,000 per year. These payments by the City would only be necessary to the extent that the Plaza’s lease income does not meet P-Six’s obligations to the bank. Existing lease payments from current Sunnyland tenants are sufficient to service these obligations.
Both the City of Washington and Mr. Paskert are excited about the long-term prospects of Sunnyland Plaza. The demographics of the market area indicate that there are untapped industry sectors that will be attracted to a redeveloped Plaza. The planned site and building improvements to the Plaza combined with the nearby road and infrastructure work will position the Plaza to thrive. iBi
