Midland Plaza owner asks Kewanee officials for money to aid expansion, new Arby's
A major expansion of Midland Plaza in Kewanee is on the drawing board, and company officials are looking for financial help from the city for the project.
Les Cohen, president and CEO of Cohen Development Group, the Peoria firm which owns the shopping center, outlined the expansion plans at a recent City Council meeting. Cohen said he hopes the project can be completed this year.
The plans call for six new “outlot” businesses —fast-food restaurants or other businesses that need drive-through windows — to be built in the Midland Plaza parking lot. The new Arby’s location is the first of these businesses.
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Also planned is a 20,000-square-foot “endocap” building connected to the east side of the main building, next to the Shoe Sensation store.
The plan also calls for demolition of part of the old Bracken’s Shopping Center building, much of which is vacant now.
Cohen said his company has “never asked for a single penny” from the city since Midland Plaza was established in 1970. But to make the expansion possible, he said, he would like the city to participate in funding it.
Cohen Development has applied for Tax Increment Financing (TIF) funds for part of the cost of building the Arby’s facility. Cohen said $1.4 million of the cost is eligible for TIF funding.
Council members supported the idea of providing around $480,000 in TIF money.
TIF is funded by increased property tax revenues that result from new business ventures. City Manager Gary Bradley said the section of parking lot where Arby’s was built wasn’t generating much, if any, property tax before. So the $32,000 in property taxes the city receives each year for the restaurant could go into the TIF fund.
Council members said they were concerned that pulling nearly half a million dollars from the TIF fund — which has a current balance of just under $800,000 —might bring the fund too low to be able to pay for other eligible projects in the future. Bradley said money could be transferred from the city’s economic development fund, which has more than $2 million in it, to the TIF fund if needed.
Bradley said a measure authorizing the TIF payment to Cohen could be considered at the next council meeting.
Also discussed briefly was the possibility of creating a Special Service Area (SSA) to raise additional money for the Midland Plaza expansion.
Under the SSA program, the city would designate an area — which would include Midland Plaza — as the SSA. A sales tax increase of up to 1 percent could be charged on all sales made within the area.
Cohen said an SSA is helping to pay for an expansion of one of his Peoria shopping centers.
Bradley said the council would determine the boundaries of the area if it decides to create the SSA. The area would include the shopping center, but other areas could also be included, he said.
Cohen said he has been looking for new retail tenants for Midland Plaza, but with the rise of online shopping and the continuing effects of the COVID-19 pandemic, times have been challenging for “brick and mortar” stores.
He said he has spoken with representatives of four national retailers and three have shown no interest in locating in Kewanee. The fourth remains a possibility, he said.
Cohen Development also owns three shopping centers in Peoria and one each in Decatur and Chillicothe.