10 years later, Shoppes at Grand Prairie impact is huge
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- Published on Wednesday, 20 August 2014 14:24
- Written by Paul Gordon
The Shoppes at Grand Prairie, the shopping center that some city fathers didn’t want and naysayers thought would hurt the local economy, was the catalyst for a near $40 million gain in Home Rule Tax receipts its first decade in existence, according to a Bradley University study.
The Center for Business and Economy Research at Bradley’s Foster College of Business said that from April 2003, when the Shoppes at Grand Prairie opened, through December 2013 the city of Peoria collected $38.97 million in sales taxes from the $2.6 billion in retail sales added by the Shoppes and numerous related developments in that time.
The CBER concluded that the City of Peoria collected an additional $38.97 million in HRT sales taxes from the $2.6 billion retail sales that were added by the presence of the Grand Prairie developments during that period.
HRT taxable retail sales in the City of Peoria were 19 percent higher than expected from other economic factors, with new sales growth associated with the presence of these new Peoria regional shopping areas, the report said.
“The study finds that sales and sales tax receipts since the April 2003 opening of the Grand Prairie developments were significantly higher than would have been expected from the other variables studied. These other factors included: Midwest price inflation; the estimated volume of online sales; seasonal variations in local purchases; general growth in area retail sales; area economic growth; the national business cycle; and changes in the local sales tax structure,” said the report by Dr. Bernard Goitein, CBER director.
The study evaluated the statistical impact of the Grand Prairie developments on retail purchases (excluding food, drugs and vehicles) in Peoria, and changes on City HRT sales tax receipts resulting from these purchases, controlling for other economic changes.
The six-month study tracked retail sales and sales tax receipts within the City. The study noted that HRT taxable retail sales had fallen during the five years prior to the 2003 opening of the Grand Prairie developments. These sales rose during 2003- 2007, until the effects were felt from the nation’s recession of December 2007- June 2009. City of Peoria HRT taxable retail sales fell during the recession, with sales recovering subsequently, reaching about $15 billion in 2013.
“The Grand Prairie development has had a significant impact on Peoria’s retail landscape, generating new shopping opportunities and increased sales in the city, as well as new HRT sales tax receipts for the City,” Goitein said.
The Shoppes at Grand Prairie development wasn’t a slam dunk for developer Cullinan Properties Ltd. In fact, the city turned down the developer’s request for financial assistance for the infrastructure into the center when it first proposed a center even larger than the one built with three anchors, including Bergner’s and Dick’s Sporting Goods.
But Cullinan Properties persisted, getting financing from other sources and built the center.
How it has turned out has made the company proud, said Diane Oberhelman, chairman of Cullinan Properties. “We were confident from the start this would be successful. Our whole team knew what it was doing and all the reasons some people didn’t believe in it turned out incorrect,” she said.
Those reasons included that people didn’t think Peoria could support two malls, with Northwoods Mall just a few miles away.
But Cullinan Properties had studies showing additional retail would broaden the area that metropolitan Peoria draws from. At the time the draw was from mostly a 10-county area; it has grown to a 30-county area reaching 1.7 million people, Oberhelman said.
That was supported by surveys of Shoppes at Grand Prairie shoppers Cullinan Properties did a few years ago, she said. Shoppes at Grand Prairie is now managed by DMA Property LLC of Chicago.
“This is great for the entire city, not just the Shoppes or the related developments out there. And we don’t claim it’s the only reason the radius has grown, what with the Civic Center and other top venues and the medical community. But we are proud of what has happened and satisfied,” she said.
Growth in the Grand Prairie area has been non-stop since the Shoppes opened. It includes much more retail, apartments and single family residential, medical complexes and hotels/motels. More is in the works, as well, including the Louisville Sluggers Sports Complex on Orange Prairie Road. “That region has many developers involved now and I wish them well. It will help the city and the entire region. It’s important we continue to look at that area on a regional basis,” Oberhelman said.
In his report Goitein said future CBER studies may evaluate the impacts the Grand Prairie developments have had on hotel, restaurant and amusement taxes as well as property taxes for the various units of government.
Looking ahead, Goitein said online sales to consumers likely will continue to grow, which could affect local taxable retail sales and sales tax receipts. “A strong City of Peoria retail mix should help the city to resist HRT sales tax losses to online sales,” he said.
Ginger Benz, operations manager at Cullinan Properties, agreed with that assessment. “That’s because people still prefer going out and shopping because of the overall experience. Studies have shown that. They make a day or evening of it; shopping, dinner, a movie. It makes for the kind or experience a lifestyle center like the Shoppes at Grand Prairie can provide,” she said.
“Online shopping is more targeted, looking for specific items. It just isn’t the same as getting out and shopping,” Benz added.
