Walmart spurs new development to house learning center, retail-office buildings - Quad-Cities Online: Local

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Walmart spurs new development to house learning center, retail-office buildings

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Posted: Saturday, February 16, 2013 9:39 pm | Updated: 7:09 pm, Thu Apr 24, 2014.

A proposed development on 11th Street in Rock Island spurred by the planned arrival of Walmart to Watch Tower Plaza will house a new $1.75 million Black Hawk College Adult Learning Center and new retail and office buildings.

The learning center and Christine Ellsberg's State Farm insurance agency are expected to move to the development from WatchTower Plaza to help clear the way for the new Walmart Supercenter.

The city-owned site at the intersection of 11th Street and Blackhawk Road, close to City Limits Saloon & Grill, formerly was a trailer park. The intersection will be reconfigured to improve access to the site.

At its Monday meeting, Rock Island's city council will be asked to vote on a proposal to transfer the land to developers Pat Eickenberry and Kevin Koellner for a nominal fee of $10. The pair own 11th Street Development Partners LLC.

City officials also are recommending aldermen approve the city spending $1.75 million to assist with the adult learning center's moving costs and to build a new building for the college.

As part of the development agreement, the city would commit to up to $2 million in infrastructure funding to support development at the site.

A new tax-increment-financing district is planned that will include the Walmart site at Watch Tower Plaza and the new development site next to City Limits.

The $2 million will cover sewer and water mains to connect to the new development, with the work funded through the TIF, said Jeff Eder, the city's economic development director. In a TIF district, real estate taxes are frozen and tax revenue above the amount frozen is used to pay for development.

The site also has space for four other units. Mr. Eder said the city is working on bringing either retail or office units to the site.

The city still has considerable work ahead to clear the Watch Tower Plaza site for Walmart's arrival.

Negotiations continue with the owners of Hill and Valley Bakery, which leases space in the old Watch Tower Plaza. The city has agreed to pay George and Nancy Coin $1.5 million for the building.

The Coins sold the bakery in 2005 to Circle Peak, a New York-based private investment firm, but maintain ownership of the building, which they now lease to Hill and Valley.

As part of the lease agreement, the bakery has the option to extend its lease another five years, regardless of whether the building is sold.

Mr. Eder said the city is negotiating with an attorney working for Hill and Valley on a relocation assistance package. Any such package would be contingent on the bakery, and its nearly 200 employees, staying in Rock Island, according to city manager Thomas Thomas.

Hill and Valley's President Doug Davidson could not be reached for comment Friday.

A drawing of the new Walmart site provided by the city places a parking lot on top of where the bakery is located. Mr. Thomas said the city could begin site work for Walmart even if the bakery remains, although he's confident an agreement with the bakery's owners can be reached soon.

The city also has yet to reach an agreement to buy the Pawn King store at 3940 11th St. for the Walmart development. Mr. Eder said the property is not essential to the development and negotiations over a sale price are ongoing.

Aldermen already have signed off on about $6 million to buy properties at the Watch Tower site. The total will rise to $7.75 million if the council approves buying the Black Hawk College building at Monday's council meeting.

Still ahead for the city is the cost of demolishing the buildings at Watch Tower. Environmental consultants also are analyzing the site of an old gas station at Watch Tower to see if any environmental remediation work is required.

The city has a $15 million line of credit to fund the Walmart project. Walmart's development arm has agreed to buy the 20-acre site for $4.5 million after the city clears the area. The Walmart Supercenter is expected to create 400 jobs.

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