Bloomington council weighs loan guarantee and TIF study as developer moves to buy Eastland Mall

Update: the council approves

The Bloomington City Council unanimously approved the measures Monday night, according to WGLT and 25 News Now.^{3, 4} The votes authorize the study of whether the property qualifies for a tax increment financing district and the city’s 80% guarantee on the purchase loan, and a third measure lets the purchase count toward a future TIF even though the money is spent before the district exists, 25 News Now reported.^{3, 4}

“This is moving really, really fast,” Deputy City Manager Billy Tyus told the council, WGLT reported.³ He said most of the mall would come down to make way for “more of an open-air retail lifestyle center,” and that some demolition could happen by fall 2027.³ The study by PGAV Planners will cost about $30,000, according to WGLT.³

“I know this is a little unorthodox, what we’re doing and what we’re asking you to consider,” Development Services Director Kelly Pfeifer told the council, 25 News Now reported.⁴ Council member Mollie Ward said her continued support depends on a project labor agreement.^{3, 4} “In order for me to continue to be supportive of this, it needs to include a project labor agreement moving forward,” Ward said.⁴

If the schedule holds, a TIF district could be in place between January and April, which would take a separate council vote.^{3, 4}

The original report

A developer is under contract to buy Bloomington’s Eastland Mall, and the City Council is scheduled to consider two measures Monday meant to speed the redevelopment of the mostly vacant property.^{1, 2}

Cullinan Properties of East Peoria agreed to buy the entire 53-acre site for $11.3 million, the city announced Friday, and the sale could close as early as November.^{1, 2} The company is buying the mall under the name Eastland Mall Redevelopers LLC, WGLT reported.¹

What the council will consider

At its Oct. 26 meeting, the council will consider a study of whether the property qualifies for a tax increment financing district, according to both stations.^{1, 2} PGAV Planners LLC would conduct the study, and creating a district would take a separate council vote, WGLT reported.¹ A TIF district would help pay for demolition and infrastructure, 25 News Now reported.²

The council will also consider guaranteeing 80% of the $11.3 million purchase loan for up to a year.^{1, 2} The guarantee would back Cullinan as it seeks financing from the Bank of Springfield, according to WGLT.¹ The plan carries no up-front cost to the city, 25 News Now reported.²

City Manager Jeff Jurgens told WGLT that the proposed agreement protects the city if the developer does not repay.¹ “Under the proposed agreement, if the developer defaults, the City may enforce the agreement through legal remedies and, importantly, may obtain title to the property through a deed that would be held in escrow and released upon a default,” Jurgens said in a statement to the station.¹ “The developer on this project has a strong track record and significant experience with large-scale redevelopment projects, so we do not anticipate a default,” he said.¹

What could replace the mall

The developer’s plan is to tear down the enclosed mall, keep Kohl’s and some outparcels, and build an outdoor shopping center with dining and entertainment, 25 News Now reported.² “The city anticipates a comprehensive transformation of the Eastland Mall site,” the city said in a statement, according to WGLT.¹

Most of the mall at Veterans Parkway and Empire Street has been vacant for years.¹ Its owner, CBL Properties of Tennessee, has blamed the drop in mall traffic on the rise of online shopping in property tax appeal filings, WGLT reported.¹ The mall was listed for sale through the summer as a redevelopment opportunity.¹

A tax increment financing district has helped revitalize the shopping center across the street, but that district does not include the mall, according to WGLT.¹

Cullinan has developed several Central Illinois shopping centers, including the Shoppes at College Hills in Normal, The Levee District in East Peoria, The Shoppes at Grand Prairie in Peoria and East Court Village in Pekin, the station reported.¹

What happens next

The city and the developer still need to draft and approve a redevelopment agreement, which the city expects to take about six months, WGLT reported.¹